taxation

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.

A Brief Overview of BIR Filing Rules for Philippine Corporations Businesses

Philippines Tax Filings BIRBureau of Internal Revenue Tax Filings

Upon registering your corporation, branch office or business with the Philippine Bureau of Internal Revenue (BIR), you will be required to attend a seminar that will orient you on your company’s basic tax obligations in the Philippines.

While most corporation owners would send their accountants to this seminar rather than attend it themselves, it is wise and prudent for you to be aware of the information given there as well. So here, in a nutshell, are the basic rules of Philippine tax filing that you, as a business owner, should know.

What to pay

1. Sales tax. There are two kinds of businesses in the Philippines: value added tax (VAT) payers and percentage tax payers, or non-VAT.

VAT payers are required to pay monthly and quarterly sales taxes equivalent to 12% of their gross sales, while non-VAT payers pay 3% monthly.

When to pay: on or before the 20th day of the following month (monthly) and the 25th day after the close of the quarter (when applicable)

Forms to use: 2551-M (monthly) for non-VAT; 2550-M (monthly) and 2550-Q (quarterly) for VAT

Who are Required to File VAT Returns

  • Any person or entity who, in the course of his trade or business, sells, barters, exchanges, leases goods or properties and renders services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed One Million Nine Hundred Nineteen Thousand Five Hundred Pesos (P1,919,500.00).
  • A person required to register as VAT taxpayer but failed to register
  • Any person, whether or not made in the course of his trade or business, who imports goods

2. Income taxes withheld at source. Businesses are required to withhold taxes from their building lessors (5% of total monthly rent), hired freelancers (10–15% for professionals and 2% for subcontractors), and regular employees (rates depend on salary), and remit these taxes to the BIR every month. The BIR Form 2307 should be issued to these withholdees to serve as their proof of creditable income tax withheld at source.

When to remit: on or before the 10th day of the following month

Forms to use: 1601-C (compensation) for employees; 1601-E (expanded) for lessors and freelancers

3. Income tax. As a general rule, income tax rates for corporations in the Philippines are at 30% of net taxable income, while the optional standard deduction rate, which can be used in lieu of itemized deductions, is 40% of the company’s gross income.

However, several conditions, such as BOI or PEZA registrations, special tax treatises, etc., may significantly lower the amount of taxes due from a corporation. Our company can guide you on what steps to take to legally minimize your company’s tax duties in the Philippines.

When to pay: on or before May 30 (q1), August 29 (q2), November 29 (q3), and April 15 (annual)

Forms to use: 1702-Q (quarterly) and 1702-RT (annual)

4. Registration fee. This is a ₱500 fee that needs to be paid every year as a renewal of one’s BIR registration.

When to pay: on or before January 31

Form to use: 0605 (payment form)

If the deadlines for filing fall on a holiday or weekend, then your company may still file and pay without incurring penalties on the next working day.

Additional notes

The deadlines listed above are for manual payers only. Users of the eFiling and Payment System (eFPS) usually have their due dates set one to five days after the manual payers, depending on the industry that their business is engaged in. The companies that are required to use the eFPS include corporations with paid-up capital stocks of at least ₱10 million pesos, taxpayers with computerized accounting systems, PEZA members, and BOI-certified companies.

Payments should be made at authorized agent banks within the revenue district under which your business is registered. Payments made in banks outside your own revenue district will be subject to 25% penalty.

If you would like to learn more about the tax environment and exemptions for local- or foreign-owned corporations in the Philippines, we at Dayanan Consulting can help you. Call us today and let’s talk. We’d be happy to be of service.

 

Tax Withheld for Employees BIR Form 2316

BIR Form 2316

Doing business in the Philippines and hiring Filipino talent requires compliance with the revenue regulations of the Bureau of Internal Revenue (BIR). This applies to all companies, whether local or foreign owned BPOs, or engaged in any other kind of business and have already registered with the BIR.

Revenue Regulations No. 11-2013

Other than submitting documents to the government, companies in the Philippines are required to provide its employees a hard copy of BIR Form 2316 or the Certificate of Compensation Payment/Tax Withheld. Employers should:

1) Provide its employees with BIR Form 2316 on or before January 31 and
2) Provide the terminated employee with the form on the day of giving the last payment of compensation.

Minimum wage earners (MWEs) are not exempted from this rule. Employers of MWEs should issue BIR Form 2316 (June 2008 Encs version) to their employees on or before January 31 as well.

Several rules should be followed when employers issue the Certificate of Compensation Payment or Tax Withheld form to its employees. Employers should provide the original and duplicate copies of BIR Form No. 2316 with the following information:

1) Name and address of the employer;
2) Employee’s Tax Identification Number (TIN);
3) The amount of exemptions claimed, amount of premium payments on health and/or hospitalization insurance not exceeding P2,400;
4) The sum of compensation paid including nontaxable benefits;
5) The amount of statutory minimum wage receieved by MWEs;
6) Overtime, holiday, night shift differential, and hazard pay received by MWEs;
7) The amount of tax due;
8) The amount of tax withheld during the calendar year; and
9) Other information in the form that needs to be filled out.

For cases covered by substituted filing, employers should provide the employees with the original copy of BIR Form No. 2316 and file the duplicate copy with the BIR not later than February 28 following the close of the calendar year.

Penalties

If an employer or a withholding agent fails to comply with this revenue regulation within the required time, there will be a corresponding fee of P1,000 for each penalty committed. The aggregate amount for all penalties should not exceed P25,000. The fee will be waived unless the failure is due to reasonable cause and not willful neglect.

Furthermore the employer or withholding agent will be punished with a fine of P10,000 and at least one year imprisonment if it fails to pay any tax, make any return, keep any record, or supply correct and accurate information, withhold taxes, or refund excess taxes for two consecutive years.