Accounting

US Companies Expanding to the Philippines: Why BIR and SEC Compliance Should Be Your First Priority

Expanding internationally is a strategic milestone for any organization. For many U.S. companies, the Philippines has become one of the most attractive destinations for growth in Southeast Asia.

With its highly skilled English-speaking workforce, competitive labor costs, and strong service sector, the Philippines offers a compelling environment for outsourcing, shared services, tech operations, and regional headquarters.

However, while market entry may look straightforward on paper, regulatory compliance in the Philippines — particularly with the Securities and Exchange Commission (SEC) and the Bureau of Internal Revenue (BIR) — is where many foreign companies face unexpected complexity.

Before hiring employees or generating revenue, your financial and regulatory foundation must be properly structured.

Why US Companies Are Expanding to the Philippines

Several factors continue to drive U.S. expansion into the Philippine market:

  • Access to a skilled and cost-efficient workforce
  • Strong BPO and IT infrastructure
  • Favorable time zone overlap with the United States
  • Growing domestic consumer market
  • Strategic ASEAN positioning

But expansion success depends not only on operational setup — it depends on regulatory compliance.

Understanding the Role of the Philippine SEC for Foreign Companies

The Philippine Securities and Exchange Commission (SEC) regulates corporate registration and business entities in the Philippines.

For U.S. companies expanding to the Philippines, registration with the SEC is mandatory when establishing:

  • A Domestic Corporation (subsidiary)
  • A Branch Office
  • A Representative Office
  • A Regional Headquarters

The SEC is responsible for:

  • Approving your Articles of Incorporation
  • Issuing your Certificate of Registration
  • Regulating corporate governance compliance
  • Monitoring reportorial requirements

Failure to comply with SEC reportorial requirements can result in penalties, suspension, or revocation of registration.

For foreign companies, structuring the correct entity type at the beginning is critical — as it directly affects taxation, liability, and operational flexibility.

The Bureau of Internal Revenue (BIR): Tax Compliance Starts Immediately

Once SEC registration is completed, registration with the Bureau of Internal Revenue (BIR) follows.

The BIR oversees:

  • Taxpayer registration
  • Issuance of Authority to Print official receipts
  • Books of accounts registration
  • Tax identification numbers (TIN)
  • Monthly, quarterly, and annual tax filings

This is where many U.S. companies underestimate the administrative requirements.

Even newly registered entities — including those not yet profitable — may have ongoing filing obligations.

Common BIR Compliance Requirements Include:

  • Registration of manual or computerized books of accounts
  • Monthly VAT or percentage tax filings
  • Withholding tax reporting
  • Annual income tax returns
  • Financial statement submission

Non-compliance may lead to:

  • Financial penalties
  • Accrued interest charges
  • Audit exposure
  • Business permit renewal issues

For U.S. companies unfamiliar with Philippine tax procedures, professional bookkeeping support becomes essential.

Why Outsourced Bookkeeping Is Critical for US Companies Expanding to the Philippines

When entering a new regulatory environment, financial clarity is not optional — it is infrastructure.

Outsourcing bookkeeping in the Philippines provides several strategic advantages:

1. Immediate Local Compliance Expertise

Philippine tax and accounting processes differ significantly from U.S. GAAP reporting systems.

A local outsourced bookkeeping team ensures:

  • Proper transaction recording aligned with BIR standards
  • Accurate tax calculations
  • Timely filing of statutory reports
  • Maintenance of compliant books of accounts

This prevents costly corrections later.

2. Cost-Efficient Market Entry

Hiring in-house finance staff during early expansion increases fixed overhead.

Outsourcing eliminates:

  • Full-time salary commitments
  • Employment benefits and statutory contributions
  • Recruitment and onboarding costs
  • Infrastructure setup

This allows U.S. companies to allocate capital toward revenue-generating activities instead of administrative overhead.

3. Alignment Between US Headquarters and Philippine Operations

One of the biggest challenges for multinational companies is reconciling local statutory reporting with consolidated global reporting.

Professional outsourced bookkeeping ensures:

  • Clean financial records
  • Organized documentation
  • Reporting that can be easily integrated into parent company financial statements

This supports transparency for leadership, investors, and auditors.

4. Reduced Regulatory Risk

BIR audits and SEC compliance checks are part of operating in the Philippines.

Proper bookkeeping ensures:

  • Financial records are audit-ready
  • Required reports are submitted on time
  • Tax computations are properly documented

Risk mitigation begins with accurate records.

Structuring Your Philippine Expansion Correctly from Day One

For US companies expanding to the Philippines, the correct sequence typically includes:

  1. SEC registration of the chosen entity type
  2. BIR registration and tax mapping
  3. Books of accounts registration
  4. Setup of accounting systems
  5. Ongoing bookkeeping and compliance monitoring

Skipping steps or delaying compliance can create operational bottlenecks that slow growth.

Why Dayanan Business Solutions Supports International Companies

At Dayanan Business Solutions, we assist U.S. and international companies entering the Philippine market by providing:

  • SEC registration support
  • BIR registration guidance
  • Outsourced bookkeeping services
  • Ongoing tax and financial compliance management

We understand that foreign-owned entities require:

  • Regulatory clarity
  • Accurate financial reporting
  • Cost-efficient operational support
  • Confidence in local compliance

Our goal is to ensure your Philippine operations are compliant, structured, and financially organized from the beginning.

Frequently Asked Questions (FAQs)

1. What are the first steps for US companies expanding to the Philippines?

The first step for US companies expanding to the Philippines is choosing the appropriate legal structure (subsidiary, branch office, representative office, or regional headquarters). After selecting the entity type, registration must be completed with the Philippine Securities and Exchange Commission (SEC), followed by registration with the Bureau of Internal Revenue (BIR) for tax compliance. Proper bookkeeping systems should also be established immediately to ensure regulatory compliance from day one.

2. Do US companies need to register with both the SEC and BIR?

Yes. Foreign companies must register with the SEC to legally establish their entity in the Philippines. After SEC registration, the company must register with the BIR to obtain a Tax Identification Number (TIN), register books of accounts, and comply with tax filing requirements. Both registrations are mandatory for legal operations.

3. What is the difference between a Philippine subsidiary and a branch office?

A subsidiary is a separate domestic corporation incorporated under Philippine law, even if fully foreign-owned. A branch office, on the other hand, is an extension of the foreign parent company and is not considered a separate legal entity. The choice between the two affects taxation, liability, and capital requirements, making professional guidance essential.

4. What taxes must foreign companies file in the Philippines?

Depending on the structure and business activity, foreign companies may be required to file:

  • Corporate income tax
  • Value-added tax (VAT) or percentage tax
  • Withholding taxes
  • Annual financial statements

Filing obligations often apply even if the company has not yet generated revenue.

5. Is bookkeeping required even if the Philippine entity is not yet profitable?

Yes. Even newly registered companies without active revenue may have ongoing filing and reporting obligations with the BIR and SEC. Proper bookkeeping ensures that all transactions are recorded accurately and that compliance deadlines are met, preventing penalties.

6. Why should US companies outsource bookkeeping when expanding to the Philippines?

Outsourcing bookkeeping provides immediate access to local compliance expertise without the cost of hiring a full-time finance team. It ensures accurate financial records, timely tax filings, reduced risk of penalties, and better alignment between Philippine operations and US headquarters reporting systems.

7. How long does it take to register a foreign-owned company in the Philippines?

The timeline varies depending on the entity type and document readiness, but SEC registration typically takes several weeks. BIR registration follows thereafter. Delays can occur if documentation is incomplete or compliance requirements are misunderstood, which is why professional assistance can streamline the process.

8. Can US companies own 100% of a business in the Philippines?

In many industries, 100% foreign ownership is allowed. However, certain sectors remain restricted under Philippine foreign investment regulations. It is important to verify whether the intended business activity falls under any ownership limitations before registration.



Final Thoughts: Expansion Is Strategic. Compliance Is Foundational.

The Philippines presents tremendous opportunities for U.S. companies seeking operational efficiency and regional growth.

But expansion success depends on more than talent and market strategy.

It depends on:

  • Proper SEC registration
  • Full BIR compliance
  • Accurate bookkeeping systems
  • Ongoing regulatory alignment

If your company is planning to expand to the Philippines, ensure that your financial and regulatory foundation is established correctly from day one.

Because in international expansion, compliance is not an afterthought — it is a competitive advantage.

Dayanan Business Solutions is here to help you navigate through the Philippines Corporate Compliance landscape. Contact us.

Beyond the Sole Proprietor: 5 Surprising Truths About Starting a One Person Corporation in the Philippines

One Person Corporation in the Philippines

For nearly four decades, the Philippine entrepreneurial journey was limited by a 39-year-old Corporation Code that barred the “company of one”. To gain corporate protection, solo founders had to recruit “dummy” incorporators—usually friends or relatives—just to meet the mandatory five-person threshold.

The enactment of Republic Act No. 11232, also known as the Revised Corporation Code (RCC), changed everything by democratizing corporate protection. By introducing the One Person Corporation (OPC), the law finally recognized that a single individual can build a scalable, protected business without a crowded board.

Here are five crucial truths you need to know about setting up an OPC.

1. Your Personal Assets Finally Have a Legal “Shield”

Transitioning from a sole proprietorship to an OPC is a powerful exercise in risk management.

  • In a sole proprietorship, you and the business are legally indistinguishable.
  • If the business defaults on a loan or loses a lawsuit, your personal home, car, and savings are at risk.

An OPC changes this by granting your business a Separate Juridical Personality. This creates a legal “shield” where your liability is limited to your invested capital. The law explicitly states: “An OPC is a legal entity distinct from its single stockholder. This allows the corporation to enter into contracts, acquire assets, and engage in legal actions under its corporate name.”.

By creating this legal distinction, you ensure business debts do not become personal tragedies. This status forms the foundation of a modern, “lean” risk profile.

2. You Don’t “Convert” to an OPC—You Start Over

A common trap for established business owners is thinking they can seamlessly “convert” a Department of Trade and Industry (DTI) registration into an OPC. From a legal standpoint, this is a “rebirth,” not a conversion.

  • Technically, a sole proprietorship cannot be directly transformed.
  • Strategically, you must maintain your DTI registration until the SEC process is finalized to ensure business continuity.
  • You must register a new entity via the SEC eSPARC system and execute a Deed of Assignment to transfer assets and liabilities.
  • The SEC requires the Latest Audited Financial Statements (AFS) of your sole proprietorship to allow this transfer.
  • Only after the OPC is fully operational should you retire the old DTI registration.

3. The “Buddy System” for Solo Founders (Nominees)

The OPC is designed for solo stockholders, but it is legally built for Perpetual Existence. To ensure the business survives beyond your lifespan, the law requires a “safety net” featuring a Nominee and an Alternate Nominee. These individuals step in to manage the business if you pass away or become incapacitated.

Furthermore, the law requires three distinct corporate roles:

  • President/Director: You. (Either Filipino/Foreigner)
  • Corporate Secretary: This cannot be you; they must be a Filipino citizen and a resident of the Philippines.
  • Treasurer: You can assume this role, but you must post a surety bond that scales with your Authorized Capital Stock (ACS). For instance, if your ACS is PHP 1,000,000, your surety bond coverage must be PHP 1,000,000. This bond must be renewed every two years.

4. The US$200,000 Doorway for Foreign Founders

For foreign tech founders and investors, the OPC is an excellent vehicle for 100% ownership, provided they comply with the Foreign Investments Act (FIA).

For domestic-market enterprises with more than 40% foreign equity, the FIA generally requires a US$200,000 minimum paid-in capital. However, foreign founders can look for two strategic loopholes for a leaner entry:

  • The Tech/Employment Carve-out: The requirement drops to US$100,000 if you use SEC-certified advanced technology or employ at least 50 direct Filipino employees.
  • The Export Loophole: If the OPC is an Export Enterprise (selling more than 60% of its output abroad), the US$200,000 minimum generally does not apply.

5. Professionalism is a “Subscription” to Credibility

In business, compliance is the subscription fee for credibility. While sole proprietorships are informal, an OPC is a regulated entity that builds trust with banks through a mandatory paper trail.

Fortunately, there is a “lean” advantage during setup: per Section 7 of SEC Memo 7-2019, an OPC is not required to submit and file Bylaws. The SEC eSPARC (Electronic Simplified Processing of Application for Registration of Company) system also reduces friction by allowing the digital uploading of authenticated or notarized documents.

However, you must be aware of critical restrictions:

  • The Professional Ban: Natural persons licensed to practice a profession (like lawyers, doctors, or CPAs) cannot organize as an OPC to practice that profession.
  • Sector Exclusions: Banks, insurance companies, pre-need firms, and public companies cannot adopt the OPC structure.

To maintain your standing, you must commit to annual reportorial requirements, including Audited Financial Statements (AFS), the General Information Sheet (GIS), and mandatory disclosures of “self-dealings” between you and your corporation.

The Future of the “Company of One”

The One Person Corporation is more than a registration type ; it is a tool that allows solo founders to operate with the legal gravity of a conglomerate. By leveraging the eSPARC system and the Revised Corporation Code, you can build a business with Perpetual Existence that survives long after you step away.

FAQs

Can I convert my DTI sole proprietorship to an OPC? No, a sole proprietorship cannot be directly transformed into an OPC. You must register a new entity through the SEC eSPARC system and execute a Deed of Assignment to transfer your assets.

Do I need a Corporate Secretary for an OPC? Yes. While you are the sole stockholder, the law requires you to appoint a Corporate Secretary who is a Filipino citizen and a resident of the Philippines. You cannot act as your own Corporate Secretary.

Can I be the Treasurer of my own OPC? Yes, you can act as the Treasurer of your OPC. However, if you appoint yourself, you are legally required to post a surety bond that matches your Authorized Capital Stock (ACS), which must be renewed every two years.

Can foreigners own an OPC in the Philippines? Yes, foreign nationals can own 100% of an OPC. However, for domestic-market enterprises, the Foreign Investments Act generally requires a minimum paid-in capital of US$200,000.

Do One Person Corporations need to submit Bylaws? No. According to Section 7 of SEC Memo 7-2019, an OPC is not required to submit and file Bylaws, which reduces administrative friction during setup.

Can licensed professionals form an OPC? No. Natural persons who are licensed to practice a profession, such as doctors, lawyers, or CPAs, cannot organize as an OPC for the purpose of practicing their profession.

Get Expert Guidance on Your OPC Registration

Transitioning from a sole proprietorship or starting a new One Person Corporation involves navigating specific legal hurdles—from the SEC eSPARC registration to securing the mandatory surety bond for Treasurers. Don’t let administrative friction or compliance “subscription fees” slow down your vision.

Whether you are a local entrepreneur seeking a personal asset shield or a foreign founder looking to navigate the US$200,000 entry requirement, our team is here to help you build a business designed for perpetual existence.

Contact us

Connect With Our Strategy Team

Inquiry TypeBest For…
OPC Setup & SEC FilingNew founders ready to use the eSPARC system.
Asset Transfer ConsultationBusiness owners executing a Deed of Assignment from a DTI registration.
Foreign Investment StrategyForeigners navigating the FIA and capital requirements.
Compliance & ReportorialsAnnual GIS, AFS, and disclosure management

PH Payroll Outsourcing

The Ultimate Guide to Payroll in the Philippines (2025 Update)

Payroll Outsourcing in the Philippines

Why Payroll in the Philippines Is More Complex Than It Looks

At first glance, payroll seems simple: calculate hours, deduct taxes, and pay employees. But for businesses in the Philippines, payroll is far from routine. With constantly changing government regulations, complex contribution tables, outdated banking systems, and strict compliance requirements, payroll can quickly become a minefield.

In this guide, we’ll walk through everything you need to know — from Philippines payroll computation to government contributions, payslip formats, payroll systems, and common mistakes to avoid. Whether you’re an HR manager, accountant, or business owner, this is your all-in-one resource to master payroll in the Philippines.

1. Step-by-Step Philippines Payroll Computation

Here’s a standard payroll computation process every business should follow:

Step 1: Determine Gross Pay

  • For monthly-paid employees: Monthly salary ÷ Total working days × Days worked
  • For hourly employees: Hourly rate × Total hours worked
  • Add allowances and overtime pay (night shift differential, holiday pay, etc.)

Step 2: Deduct Mandatory Contributions

  • SSS – Based on monthly compensation and contribution schedule
  • PhilHealth – Based on salary bracket and updated premium rate
  • Pag-IBIG – Standard contribution

Step 3: Compute Withholding Tax

  • Apply BIR Withholding Tax Tables (TRAIN Law rates)
  • Consider exemptions, dependents, and applicable tax relief

Step 4: Apply Optional Deductions (if any)

  • Company loans
  • Cooperative deductions
  • Other authorized deductions

Step 5: Arrive at Net Pay

Net Pay = Gross Pay – (Mandatory + Optional Deductions + Withholding Tax)

2. Mandatory Government Contributions (2025 Updates)

Here’s a quick reference table:

AgencyContribution RateEmployer ShareEmployee ShareNotes
SSSUp to 15% of monthly salary credit~10%~5%Includes Employee Compensation (EC) program
PhilHealth5% of monthly basic salary (split equally)2.5%2.5%Income floor PHP 10,000; ceiling PHP 100,000
Pag-IBIG1–2%2% (max PHP 100)2% (max PHP 100)Optional higher contributions allowed
Withholding TaxBased on TRAIN LawN/AEmployee onlyRates vary depending on bracket

Always check the latest SSS, PhilHealth, Pag-IBIG circulars and BIR Revenue Regulations for updated tables.

3. Payroll Format Philippines: Standard Payslip Components

A compliant payslip should include:

  • Employee Information (Name, Employee ID, Position, Department)
  • Payroll Period (coverage dates)
  • Gross Pay (basic salary + allowances + overtime/holiday pay)
  • Deductions (SSS, PhilHealth, Pag-IBIG, Withholding Tax, loans)
  • Employer Contributions (shown separately if desired)
  • Net Pay (final amount payable)
  • Payment Method (cash, bank transfer, payroll card)

4. Manual Calculation vs. Using a Philippines Payroll Calculator

  • Manual Calculation
    • Useful for very small teams
    • Prone to error, time-consuming, must keep up with regulation changes
  • Philippines Payroll Calculator / Software / Payroll Outsorucing
    • Automates tax and contribution updates
    • Reduces errors and compliance risks
    • Saves time, provides digital payslips
    • Subscription or setup costs

5. Choosing the Right Philippines Payroll System / Software / Outsourcing Partner

When selecting payroll software in the Philippines, consider:

  • Compliance Updates – Automatically adjusts to new SSS, PhilHealth, Pag-IBIG, BIR tables
  • Automation – Handles recurring payroll runs, deductions, and reporting
  • Integration – Connects with accounting, HR, and timekeeping systems
  • Reporting – Generates government reports (Alphalist, SSS R-3, PhilHealth ER-2)
  • Security – Complies with the Data Privacy Act of 2012

Popular Philippines payroll software providers include Dayanan Business Solutions amongst the top payroll partners.

6. Common Payroll Mistakes to Avoid in the Philippines

  1. Incorrect SSS/PhilHealth/Pag-IBIG rates due to outdated tables
  2. Late government remittances → penalties and surcharges
  3. Not following pay frequency (must be bi-monthly or semi-monthly, not monthly)
  4. Incorrect tax withholding (misclassification of employees)
  5. Data privacy lapses (failure to secure payroll records)
  6. Manual spreadsheet errors that cause wrong payouts

7. Frequently Asked Questions (FAQ)

Q1: What is the 13th-month pay computation in the Philippines?
A: It is 1/12 of the employee’s total basic salary within the calendar year. Mandatory for all rank-and-file employees who have worked at least one month.

Q2: How often should payroll be run in the Philippines?
A: At least twice a month.

Q3: Is overtime pay mandatory?
A: Yes, based on the Labor Code of the Philippines, employees working beyond 8 hours/day must receive 25% additional pay (30% on rest days/holidays).

Q4: Do foreign employees contribute to SSS, PhilHealth, and Pag-IBIG?
A: Yes, unless exempted by specific treaties or agreements.

Conclusion: Payroll as a Strategic Function, Not Just Admin

Payroll in the Philippines is more than just cutting paychecks. It’s about compliance, trust, and efficiency. Errors in payroll can lead to financial penalties, employee dissatisfaction, and even reputational damage.

By adopting the right Philippines payroll system, automating compliance with updated contribution tables, and avoiding common mistakes, businesses can turn payroll into a foundation for growth rather than a source of risk.

Payroll outsourcing in the Philippines streamlines compliance with SSS, PhilHealth, Pag-IBIG, and BIR while reducing administrative workload. It saves time, improves accuracy, and lets businesses focus on growth.

Ready to streamline your payroll in the Philippines? Explore modern Philippines payroll software and payroll calculators to ensure compliance, accuracy, and efficiency today.

Is Assistance Available? 

Yes, Dayanan Business Solutions can help. Our experienced team simplifies the complex process of outsourcing payroll, delivering customized solutions to meet your business needs. Contact us today to schedule an initial consultation with one of our experts:

Looking for a reliable Philippines payroll partner? Dayanan Business Solutions offers expert payroll outsourcing and Philippines payroll software solutions designed to ensure compliance, accuracy, and efficiency—whether you’re an SME or a growing enterprise. Streamline your payroll today and stay ahead with a system built for the Philippine market.

Frequently Asked Questions for Bookkeeping in the Philippines

Frequently Asked Questions for Bookkeeping in the Philippines

COVID-19 or not, bookkeeping is a taxing but necessary endeavor for any business. Regardless of scale, businesses need to know the current state of their finances. Company owners and management members should at least have a working knowledge of the most commonly-used accounting jargon. This way, they can make decisions and allocate resources with an eye on maintaining and building the company’s financial health.

The following is a short list of frequently asked questions (FAQs) on bookkeeping in the Philippines. It includes answers to general questions like “What is bookkeeping?” to more specific questions like “What is the difference between bookkeeper and accountant?”. We hope that this list can help you answer some of your most common questions when it comes to bookkeeping.

What is bookkeeping?

Q: What is bookkeeping?

Bookkeeping includes recording, storing, and retrieving financial transactions for an entity such as a business, nonprofit organization, individual, etc. It also requires knowledge of basic financial accounting concepts such as debits and credits, balance sheets, and income statements. It is part of the full business accounting process.

On the other hand, accounting refers to recording, organizing, and understanding your company’s financial records. Accounting can tell you which parts of the business actually makes you money and whether your business is making a profit or not.

Q: What’s the difference between bookkeeper and accountant?

What’s the difference between bookkeeper and accountant?

A bookkeeper is the one who keeps, records, and gathers financial data, while an accountant summarizes, interprets and communicates this data for financial decisions. The two roles are very similar, but still very different.

While an accountant can do bookkeeping tasks (but usually don’t), they are better suited to consulting work, such as preparing your financial reports and helping you understand the financial impact of your previous (and upcoming) decisions.

Q: What are some examples of bookkeeping tasks?

Typical bookkeeping tasks include:

  • Processing employee payroll and related governmental reports
  • Billing for goods sold/services provided to clients
  • Recording receipts from customers
  • Monitoring individual accounts receivable
  • Providing financial reports
  • Paying suppliers
  • Verifying and recording invoices received from suppliers
  • Recording depreciation and other adjusting entries

Q: What makes a good bookkeeper?

A good bookkeeper will help improve business cash flow, maximize tax exemptions, and free you up to focus on growing your business.

Q: Can I do the bookkeeping myself?

Yes, but you need to ask yourself if this is really the best use of your time. For many business owners, time is their most valuable asset. Consider if you have other business tasks that need attending to. A good rule of thumb is that if you can outsource or delegate it to someone else, then do so.

We can only do so much in a day, so your limited time is better spent on pursuing high-leverage tasks and ideas. In the long run, you may also find that it costs more money to do the bookkeeping yourself—especially if you don’t have the necessary experience or interest

Should I outsource my bookkeeping?

Q: Should I outsource my bookkeeping?

Yes, but it also depends on how much you’d like to micromanage.

If you like having a tight rein over your company’s finances, being your own bookkeeper might work for you. However, our general recommendation is to outsource as it saves your time, money, and energy. Hiring a professional bookkeeper or accountant is always the better choice, as it can save you from making mistakes that could eventually cost you a lot.

Q: Will I save time and money if I outsource accounting or bookkeeping?

Yes to both! Your time is better off spent on tasks that will grow your business the most, like strategizing and planning for business growth. Some benefits of outsourcing business bookkeeping and accounting include:

Will I save time and money if I outsource accounting or bookkeeping?
  • Reduced operational costs (e.g. payroll, office space, equipment)
  • Lesser risk of paying penalties and fines for non-compliance
  • Improved Cash Flow
  • More time spent on core business competencies
  • Better insights with which to boost your internal systems and processes
  • Allows you to easily scale up as needed

Q: Where can I find a bookkeeping firm in Makati?

Dayanan Business Solutions Inc. offers bookkeeping services and is located in the heart of the Philippines’ business district. You may contact us at telephone number +632 7576-8476 or visit us at LG1, Cityland III, V.A. Rufino corner Esteban Streets, Legaspi Village, Makati City.

Q: What are some examples of bookkeeping and/or accounting software?

While a spreadsheet program like MS Excel or Google Sheets may be useful for businesses with a tight budget, it’s still limited compared to specialized bookkeeping software such as Quickbooks.

The most popular bookkeeping software is Quickbooks, but Xero and Freshbooks are some well-known names as well. Explore your choices before making your purchase.

Q: What bookkeeping records must be maintained by businesses in the Philippines and what are they for?

What bookkeeping records must be maintained by businesses in the Philippines and what are they for?

According to the Philippines’ Bureau of Internal Revenue (BIR), there are six books that every business should keep and maintain regularly:

  • Journal
  • General Ledger
  • Cash Receipts Book
  • Cash Disbursements Book
  • Subsidiaries Sales Journal
  • Subsidiaries Purchases Journal

1. Journal – Accounting entries are recorded here in chronological order before the transactions are posted to the General Ledger.

2. General Ledger – It holds account information needed to prepare the company’s financial statements. Data in the general ledger is segregated by type into accounts for revenues, expenses, assets, liabilities, and equity.

3. Cash receipts book – It is a detailed record of all cash inflows to a business, such as cash sales and collections of accounts receivable.

4. Cash disbursements book – This is a record of all financial expenditures made by a company before they are posted to the general ledger. It includes disbursements for cash purchases and payments of payables.

5. Subsidiary Sales Journal – It is a record of the details of all sales transactions. The information stored in this journal is a summary of customer-issued invoices. This journal only stores receivables; this means that sales made in cash are not recorded in the sales journal.

6. Subsidiary Purchases Journal – This contains all cash and credit purchases of goods and services. A Subsidiary Purchases Journal contains information about purchasing transactions. All types of purchases made on credit are recorded here.

The BIR also mandates businesses to keep other accounting records such as registers, invoices, receipts, vouchers, returns, and other source documents that support entries in the books of accounts.

Q: For how long does a company have to store its accounting books and records?

For how long does a company have to store its accounting books and records?

10 years per RR 17-2013 and RR 05-2014 issued by BIR. This is because Section 203 of the National Revenue Code provides that in pending cases relating to tax evasion or failure to file returns, the BIR has the authority to examine tax documents for up to 10 years after the discovery of fraud or omission.

Q: What are the common mistakes or misconceptions about bookkeeping that people should be aware of?

There are two common misconceptions when it comes to bookkeeping and accounting. The first is regarding the start of operations and the second is about when to file tax returns.

  • Businesses should only start operating AFTER it obtains necessary permits and licenses from the relevant government offices, either the Securities and Exchange Commission (SEC) for corporations and partnerships or the Department of Trade and Industry (DTI) for sole proprietors. Aside from these, permits and licenses from local government units and the Bureau of Internal Revenue (BIR) must also be obtained.
  • Once the BIR has issued the Certificate of Registration, tax returns MUST be filed, EVEN IF there are no transactions to report. Not doing so will incur you some penalties.

Q: What are the BIR tax reports/requirements that we need to maintain? How often do we submit them to BIR?

The taxpayer needs to regularly file tax returns. What these returns are will depend on the tax types indicated in the BIR Certificate of Registration (COR). Generally speaking though, tax returns need to be filed monthly, quarterly, and yearly, as follows:

  • Withholding Taxes – filed monthly and annually
  • Value Added Tax – filed monthly and quarterly
  • Income Tax – filed quarterly and annually

Aside from tax returns, licenses and permits should be renewed annually, while annual reports should be filed and paid.

Q: Do I need to comply with BIR reports if I already have a registered entity in the Philippines but it’s not yet operational?

Once the BIR issues the Certificate of Registration, you must file, even if no transactions have taken place. Otherwise, you will be charged penalties for non-compliance.

Q: Are there any additional tax requirements for foreign businesses registered in the Philippines?

There are NO additional tax compliance requirements for foreign businesses, but there may be additional tax filings that are unique to foreign entities. An example is the branch profit remittance tax on profits remitted by a Philippine Branch to its Head Office.

Q: What happens if we don’t comply with the mandated accounting/bookkeeping requirements?

The SEC and BIR can impose penalties for failure to submit financial statements and tax returns on time. While the exact fines and penalties vary on a case to case basis, complying with basic accounting/bookkeeping requirements is always a good idea.

Thanks for reading this article on frequently asked questions for bookkeeping in the Philippines. If you want to grow your business, outsourcing is generally the way to go. If you need bookkeeping services in Makati or are searching for a bookkeeping firm in Makati, we at DAYANAN can help you! You may contact us here for any inquiries and our team of experts will gladly assist you.

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.

Dayanan Business Solutions Inc. is Newest Moores Rowland Philippines Partner Firm

DAYANAN Business Consultancy is Newest Moores Rowland Philippines Partner Firm

DAYANAN Business Consultancy is Newest Moores Rowland Philippines Partner Firm

DAYANAN president Jake Gacus (2nd from left) and director David Elefant (3rd from left) during the signing of the
partnership agreement with Moores-Rowland Philippines & Co. (MRP & Co.) last December 28, 2018. With them
are MRP & Co. managing partner Neil Sison and program head Beverly Buenconsenjo.

DAYANAN Business Solutions Inc. — one of the country’s leading firms providing
business registration, visa applications, and disaster preparedness services—is now an independent
member firm of Moores-Rowland Philippines & Co. (MRP & Co.).

The collaboration was officially formalized through the signing of a partnership agreement last
December 28, 2018 in Makati City. Representing DAYANAN were its president Jake Gacus and
director David Elefant. Neil Sison (managing partner) and Beverly Buenconsejo (program head)
represented MRP & Co.
A leading alliance of professional firms in the Philippines, MRP & Co. has members providing top-notch
services in areas such as merger and acquisitions, business valuations and appraisal, sustainability
and environmental audit, sales and marketing, and software development. MRP & Co. also provides its
members with access to networking, business consultation, marketing, and training opportunities.
“We are very happy to be part of the Moores Rowland family,” said Gacus. “The DAYANAN brand has
always been about innovation, and this partnership gives us an opportunity to bring that to the next
level. We are also excited to leverage our expertise to improve the capacity of Filipino professionals,”
he added.
Since its founding in 2011, DAYANAN has assisted hundreds of small- and medium-sized companies
set up their operations in the Philippines, facilitating foreign investments and increasing local
employment. To know more about DAYANAN’s services and products, visit
www.DayananConsulting.com and www.DisasterKit.asia.

Bookkeeping Accounting Services

Bookkeeping Services

All businesses registered in the Philippines must comply with the Philippines Bureau of Internal Revenue bookkeeping regulations. These regulations apply to corporations, branch offices, representative offices, ROHQ, RHQ and partnerships.

Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business. Information extracted from the bookkeeping will be used to evaluate a company’s financial position.

Dayanan can assure your business financial reports are accurate, reliable and clear by providing the following bookkeeping/accounting services done by our registered certified public accountants. We offer the following services:

We are your hands-on partner and advisor, it’s our duty to provide services with the highest standards of professionalism and integrity. Contact us for an evaluation of your bookkeeping and accounting requirements.

Philippines Payroll System, Processing & Services

Philippines payroll processing

Philippines employee payroll is complicated; to compute payroll you need to have a good knowledge of taxation and labor laws.

Try Payroll Outsourcing in the Philippines

Dayanan’s efficient, accurate and secure payroll processing services will give you and your employees peace of mind.

Free up your time and resources, concentrate on your core business and let us process your payroll. We keep you updated on the latest changes in Department of Labor and Employment (DOLE) and Bureau of Internal Revenue regulations, filings and reports.

Basic employee information needed to prepare payroll:

  • Name
  • Tax Status
  • Civil Status
  • Basic Salary
  • Taxable and Non-taxable Benefits
  • Incentives
  • Bonuses
  • Number of Hours Worked, Tardiness, Absences with and without Pay, Overtime
  • SSS and HDMF Loan Vouchers
  • BIR Form 2316 from Previous Employer

Our Payroll Accounting Service Provides Companies with:

(i) Payroll Computation

(ii) Preparation of Bank Data Documents

(iii) Pay slip preparations

(iv) Preparation of Payroll Accounting Entries for your Accounting and Bookkeeping requirements

This involves computation of bi-monthly payroll including determination of applicable deductions of SSS, PHILHEALTH, HDMF contributions and computation of Withholding Tax; Preparation of Pay Slips and Payroll Summary and Special Processing of 13th month pay, final pay, incentives, etc…

BIR

  • Monthly Withholding Tax on Compensation Return (BIR 1601-C, BIR 1603)
  • Annual Reports (BIR 1604CF and 2316)

SSS

  • Monthly Payment Return of Contributions (SSS R3)
  • Monthly Payment of Loan Return (ML1)
  • Salary Loan Application (ISL-101)

PHILHEALTH

  • Monthly Payment of Contributions (RF-1)

HDMF

  • Monthly Membership Contributions Remittance (HDMF M1-1)
  • Monthly Remittance Schedule of Loan (HDMF P2-4)

Contact Dayanan now to discuss how we can facilitate your Philippines Payroll System Processing and Services

 

Philippines Bookkeeping Services

All businesses registered in the Philippines must comply with the Philippines Bureau of Internal Revenue bookkeeping regulations. These regulations apply to corporations, branch offices, representative offices, ROHQ, RHQ and partnerships.

Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business. Information extracted from the bookkeeping will be used to evaluate a company’s financial position.

Dayanan can assure your business financial reports are accurate, reliable and clear by providing the following bookkeeping/accounting services done by our registered certified public accountants. We offer the following services:

Dayanan Bookkeeping Services

Accounting and Bookkeeping

We carry out a complete and accurate record keeping of your business transactions.  We use accounting software for efficient bookkeeping processing to maintain correct and up-to-date financial records. We ensure that our recording process is in compliance with the latest financial accounting standards.

Our services include the following:

  • Chart of Account Set-up and Management
  • Set-up of Accounting System and General Bookkeeping Set-up
  • Accounts Payable Processing (Voucher System)
  • Accounts Receivable Management
  • Fixed Assets Management
  • Expense Report Processing
  • Bank Reconciliation
  • Payroll Services

Management Accounting

Our management accounting services give your Company a deeper understanding of your internal business operations, these reports allow your Company’s board of directors to make profitable financial decisions.

Our CPAs can prepare the following reports:

  • Profit and Loss vs. Budget Comparison
  • Cash Forecast and budgeting
  • Revenue Projections
  • Preparation of other Management Reports as required

Financial Controlling

Outsource your financial controlling to Dayanan Business Consultants, a more cost – effective solution than hiring an internal finance and Accounting Team.  Services include:

  • Internal Control Set-up
  • Accounting and Financial Policy Set-up
  • Set-up of Receivable and Payable Procedures and Policies
  • Analysis of Financial Reports

Financial Analysis

An important tool in your management’s decision making is the evaluation by our CPAs of your company Financial Information.

Some of the financial analysis services, your company can outsource are:

  • Profitability Analysis
  • Review of Sales Contracts and other contracts for impact on accounting policies
  • Product Cost Calculations

Statutory Reporting and Compliance

Dayanan will ensure that your Company complies with Philippine Accounting and Reporting Standards, Bureau of Internal Revenue Regulation and filings with all government agencies.

  • SEC Reporting
  • Period – End Reporting (Quarterly, Annually etc.)
  • BIR Mandatory Reports (Monthly, Quarterly and Annual Reports)

Submission of the following reports

  • Expanded Withholding Taxes (BIR Form 1601-E)
  • Final Withholding tax Returns (1601 – F)
  • Value Added Tax Returns (2550M and 2550Q)
  • Income Tax Returns (1702Q)
  • Compensation Withholding Taxes (1691-C)
  • Certificate of Creditable Withholding Taxes (2307)
  • PEZA Reporting compliance

Transfer Pricing

The Bureau of Internal Revenue (BIR) is now enforcing compliance with Transfer Pricing Regulations. All foreign owned companies in the Philippines must present to the BIR upon request, a Transfer Pricing Analysis Study to justify their income from their parent company, subsidiaries and affiliates.

Dayanan can prepare a complete Transfer Pricing Analysis encompassing:

  • Transfer Pricing System Design
  • Year End Adjustment
  • Risk Management
  • Transfer Pricing Control Framework
  • Benchmarking
  • PRO Industry Solution

Audit Support Solutions

  • Outsourcing of Auditors that meets your Company’s requirements
  • Assist in your audit preparation of your financial reports
  • Special Audit Services (fraud audit, internal control compliance etc.)

We are your hands-on partner and advisor, it’s our duty to provide services with the highest standards of professionalism and integrity. Contact us for an evaluation of your bookkeeping and accounting requirements.