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
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