Amnesty Declared for Unsettled Estate Taxes and Tax Delinquencies

Philippines Tax Amnesty 2019

Philippines 2019 Tax Amnesty 

President Rodrigo Duterte signed into law Republic Act (RA) Number 11213 or the Tax Amnesty Act of 2019, which provides amnesty for those with undeclared estate taxes and tax delinquencies, last February 14.

Under the law, the government will now collect only six percent of the net undeclared estate tax for properties owned by those who died before January 1, 2018.

President Duterte Veto

Duterte vetoed provisions allowing a one-time settlement of estates for those properties under multiple unsettled estates and presuming the truthfulness of self-declared property values. It would thus seem that the six percent rate will apply at every transfer of property based on fair market values, and that the government will have to verify all estate tax amnesty returns.

The President rejected more items in the original bill which would have granted a general tax amnesty for those who failed to pay correct taxes in 2017 and previous years. Citing potential abuse by tax evaders, Duterte called on Congress to pass another bill that would lift bank secrecy in cases of fraud, include mechanisms for the automatic exchange of information, and ensure truthful declaration of assets and liabilities.

In conjunction with the Tax Reform for Acceleration and Inclusion (TRAIN) law, R.A. 11213 was envisioned by the Duterte administration to help raise revenues and expand the tax base in support of its priority development programs.

Amnesty Coverage

The law also grants amnesty on tax delinquencies, covering all national internal revenue taxes such as income tax, withholding tax, capital gains tax, donor’s tax, value-added tax, excise tax, and documentary stamp tax. The amnesty tax rate is 40 percent of the delinquent tax. Those whose cases have been subject to final judgment by the courts will have to pay 50 percent. Pending criminal and tax evasion cases merit 60 percent of the tax assessed, while those who did not remit withheld taxes have to pay 100 percent.

Finance Secretary Carlos Dominguez III noted that the amnesty on estate taxes would help those who avail to “free up property that long been estate-locked and allow heirs to make good economic use of the properties they have inherited.”

“We hope that in availing [themselves] of this amnesty—a very, very generous reprieve from the state, taxpayers would feel more encouraged to pay the right taxes, and be more empowered to be good taxpayers in the future,” Dominguez said.

Five Benefits of Document Imaging Systems

document_imaging_system

Businesses are constantly looking for ways to cut costs and increase productivity. One of the many ways this can be achieved is by investing in advanced technologies that will eradicate timely hand-operated tasks. These allow organizations to waste less time on routine but necessary office work and more time on Important Matters.

What is a Document Imaging System?

  • A Document Imaging System is a software that allows users to store, organize and retrieve digital records. (E.g. scanned images, photos and general office documents).

What can it do to help your Business?

  • Be able to instantly access documents anytime, anywhere.
  • Implement an electronic workflow.
  • Sophisticated search and retrieval capabilities.
  • Merge a Document Imaging System with other essential business applications to manage IT costs and propel efficiency.
  • Guarantee document recovery in the case of a disaster. It allows multiple backups to be stored at offsite locations providing a means to recover data.

Document Imaging Systems are vital to an organization’s capability to process and share information quickly, helping employees make decisions faster. However, This  is only one step forward. Organizations looking to get the most out of the technology often forget two other crucial technologies that make these systems possible, which are Optical Character Recognition and Data Capture.

It’s almost always the same story every time. Businesses purchased a Document Imaging System believing  it would improve the productivity and reduce inefficiencies in the workplace but in their evaluations, they neglected to think about all the documents they presently have sitting in their filing cabinets around the office.  Whilst they can effectively take care of new, electronic documents, they do not have way of digitizing or extracting important data from existing paper documents. Optical Character Recognition and Data Capture are what make this possible. They allow organizations to get rid of cabinets full of paper documents, and make all of the information held on them accessible online throughout the whole organization. Without this capability, employees are left with half of the information,therefore only half of the productivity gains. With these in place, employees can appreciate not having to run around back and forth to the file cabinet or be asked to track down a relevant document out of the Archive.

The Best System we’ve come across, so far, has been Enadoc. Where you are able to Search efficiently, Organize, Capture and Secure your document, and  most importantly save time and money.

Has your organization invested in a Document Imaging System? If so, did they simultaneously acquire Optical Character Recognition and Data Capture solutions?

 

Contact us NOW for a presentation on how Enadoc can help your business succeed.

BUSINESS PERMIT RENEWAL 2017

Business Permit Renewal

 January is time for Business Permit renewal in the Philippines, and should be done between January 1st – 20th, 2017.  The law requires, every business establishment to annually renew its registration with the local government unit (LGU) that has jurisdiction over its place of business.

 

REQUIREMENTS FOR RENEWAL

  • Renewal of Barangay Clearance – present the Original copy of 2016 Barangay and Official Receipt of the previous year
  • 2016 Mayor’s Permit / License issued / Billing Assessment
  • Official Receipts of payments – 1st to 4th quarters or annual payment of the year 2016
  • Declaration of Gross Sales / Receipts for the preceding year, number of employees, floor area (in sq. meters) of the office /factory or premises/compound occupied
  • Residence Certificate A and B for single proprietorship, C and C1 in case of Corporation or partnership for the current year (cedula)
  • Income Tax Returns and Financial Statements (FS) for the preceding  calendar year which were filed with the BIR during the current year
  • SSS Clearance
  • Public Liability Insurance
  • Affidavit of No Income / No Operation, if no operations/ no income
  • Authorization Letter authorizing the representative to process all the above.

COMPUTATION OF BUSINESS PERMIT FEES

Business tax is imposed upon the company’s gross sales or receipts.  Rates vary depending on the nature of the business under Section 143 of the Local Government Code of the Philippines.

Gross Sales or Receipts include the total amount of money or its equivalent representing the contract price, compensation or service fee, including the amount charged or materials supplied with the services and deposits or advance payments actually or constructively received  during the taxable quarter for the services performed or to be performed  for another person excluding  discounts if determinable at the time of sales, sales returns, excise tax, and value added taxes (Book II, Section 130 (n) Local Government Code).

PENALTIES FOR LATE FILING AND UNDER DECLARATION OF GROSS SALES/RECEIPTS

Local Government Units typically impose a 25% surcharge on the unpaid amount plus 2% interest per month, on top of the unpaid amount, if filing is not accomplished by January 20th.
Failure to renew your business permit on time, may result in City Hall ordering the closure of your business.

If Gross Sales /Receipts declared in the Company’s 2016 Business Permits are lower than the Actual Gross Sales /Receipts per 2016 Audited Financial Statements the company will be subjected to a penalty of 25% surcharge and 2% interest per month for any computed Tax Deficiency/Delinquency noted during assessment.

BUSINESS PERMIT COMPLIANCE

Avoid the hassle of long lines and red tape, outsource your business permit renewal to Dayanan Business Consultancy.