Sunday, June 25, 2023

Reminder: Replacement of Ask for Receipt" to "Notice to Issue Receipt/Invoice (NERI), up to June 30, 2023 Only

 Late Reminder! Better late than never, everyone who have not complied yet with the RMO No. 43-2022, you have until June 30, 2023 to comply.

The RMO is about the replacement of  the former notice to the public  "ASK FOR RECEIPT" to "NOTICE TO ISSUE RECEIPT/INVOICE" (NERI).

Visit your the RDO where you are registered to get your NERI.




OLD





NEW



To be able to replace the old issuance of the “Ask for Receipt” Notice, all registered business taxpayers are required to update the information of their registration. It is only after such an update that the Notice to Issue Receipt/ Invoice shall be released. 

It is important that there must be a designated official company email address in the registration information as this shall be the primary means of communication of the Bureau of Internal Revenue to be able to send letters, notices, orders, and the like.  



How to Request for No Derogatory Information From Securities and Exchange Commission - SEC

 What is a Certificate of No Derogatory Information?

Derogatory information is any reported negative credit information about a corporation and sometimes other interested parties require a Certificate of No Derogatory Information - CNDI to ascertain good business relations.

To get a CNDI from SEC, first secure a monitoring clearance from the Compliance Monitoring Division. Email a the request to cmd_amendment_monitoring@sec.gov.ph and attach the requirements such as;

        1.  Latest due Financial Statement and any amendments thereto (duly stamped received by BIR and SEC)

        2.  Latest due General Information Sheet and any amendments thereto (duly stamped received by SEC)        

        3.  Articles of Incorporation and By-laws (its amendment, if any)    

        4.  Copy of Registration of Stock and Transfer Book/Membership book    

        5.  Proof of compliance to SEC MC28, series of 2022.

It means that any un-complied or unsubmitted prior reports need to be submitted first and pay corresponding penalties for late submissions, before a issuance of monitoring clearance.

Upon issuance of the monitoring clearance send an email to cfrd_application02@sec.gov.ph to formally request for the CNDI, using the SEC FORM 2015 - 001 (Downloadable from SEC site), and the monitoring clearance as attachment to the request.

Please note that other documents may be requested but most of the the time the above requirements as enumerated are enough.


Pwede na bang umpisahan ang Business matapos iparehistro ito sa Department of Trade and Industry (DTI)?

 


Ang sagot ko ay Oo.

SUBALIT, datapwat, pero;

Dapat pa rin ipareshisto ang business sa Bureau of Internal Revenue (BIR) sa loob ng 30 days upon issuance of DTI Certificate of Registation, at kumuha ng kaukulang Business permit to operate sa Local Government Unit (LGU) na sumasakop sa location ng business.

Importance of registering the business with DTI.

Under Republic Act (RA) 3883, it is illegal to use a business name without registering first with DTI. DTI Registration is a guarantee for any individual or person, the legal right to use specific business name for any kind of business. But bear in mind that DTI Registration is not a form like business permit to operate.

Business permit to operate is deferent from just having the privilege to use such name for the business.

Business name is important, because it must be the same name that will appear in business permits to be issued by LGU and official receipts authorized by the BIR for issuance to its customers or to anyone patronizing the business.

Therefore, not having the business name registration, the business can never be issued a business permit to operate and as such it can never be registered to the BIR to obtain the necessary receipts that are needed to legally recognize business transactions.

The basic registrations and permit needed to operate a business legally are as follows.

1.      DTI Registration for Sole proprietor it can be done online 

2.      SEC (Securities and Exchange Commission) to where business name for corporations and partnerships form of business has to register.

3.      Business permit to operate from LGU or local government unit

Depending on the type of business, there may be other government regulating agencies that require registration, accreditation and or License to Operate (LTO); for example, is a pharmacy or drugstore that requires LTO from Food and Drugs Administration (FDA) as per FDA Circular No. 2014-025.

May mga business talaga na pwede nang i-operate prior to registration and issuance of permit provided that the owner must secure the required registration and license to operate within the 30 days upon inception of the business to avoid penalties if caught operating without the required registration, accreditations and licenses to operate.

Wednesday, March 8, 2023

Lease or rent payment is subject to withholding tax

Another taxable year just ended and only at this point of time we realized that , being the business owner, bookkeeper or an accountant, we had not subjected rent to withholding. 

For whatever reasons we had, we do not need any justification for such negligence, the only thing to do is to comply late with a penalty. There was a very nice commercial slogan used before by a pizza delivery, "If it is late, it is free", but that is good for a pizza; for the Bureau of Internal Revenue, ''if it is late, deal with it with a penalty". 

It has been... been... been, yes! in the past we were taught that in doing business, rent is subject to Expanded Withholding Tax. 

Some of the reasons, Why and How?,  a no withholding on rent happens;
  1. Negligence
  2. Contract is Silent about withholding  
  3. TIN of property owner is not available, or;
  4. Simply the property owner is not registered with the BIR, and;
  5. Therefore can not issue an Official Receipt
Reason No. 1 - Negligence if everyone involved in the processing of payments forgot to deduct from the monthly payment the corresponding EWT, most of the time this scenario happens when the landlord or lessor requires a post dated  check - PDC be issued in advance for the entire year.

Reason No. 2 - The contract has no stipulations about who will cover the EWT. is it for lessor or tenant account? My own practice of doing so, if the contract is silent and I am not a party to the contract, the EWT is deductible from the lessor. If the landlord disputes, then they have to rectify the contract.

Reason No. 3 - The rent payment was processed with EWT deduction, but no way to remit it to the BIR, because the property owner does not issue Official Receipt, because of non-registration with the BIR.

There may be other reasons for  non-withholding on rent, but based on experience the above are common.

Bear in mind that March 1, preceding every taxable year, is the filing to the BIR, the Alphalist of Payees Subjected to Expanded Withholding TAX, and before that, everything related to EWT, its application and remittance to BIR should have been cleared; otherwise, more problems will be encountered if the financial statement with the corresponding Income Tax Returns was filed and received by the BIR noting only the non-compliance and did nothing to correct it.

There are more issues about EWT that are not discussed in this topic so hold on for the coming discussions about it.





Saturday, March 4, 2023

Income Tax Return - ITR needed to Obtain Loans

Ang Income Tax Return - ITR ay isa sa mga pangunahing hinahanap kung nais natin mag-loan sa bangko o kahit sa iba pang mga Financial Institutions o Lending company.

Dahil ang ITR ang magpapatunay na tayo at may Source of Income at nakapagbayad ng katumbas na  Buwis o Tax mula rito. Mula rin sa ITR makikita ang magiging kakayahan natin na mabayaran ang loan na gusto nating makuha.

Ngunit dapat natin tandaan na magkakaroon lamang tayo ng ITR kung tayo ay may kinita mula sa Trabaho, Negosyo o Business at kung may ibang pinagkakakitaan mula sa mga special skills na meron tayo.

Dapat din tandaan na dahil ang pagbabayad ng buwis ay tungkulin ng isa mabuting mamamayan, ang mga panuntunan nito ay pinagtibay at ginagabayan ng mga BATAS na ipinatutupad ng Bureau of Internal Revenue - BIR.

Ang mga ITR forms tulad ng mga sumusunod ay ginagamit upang maipakita ang mga naging batayan ng binabayaran na INCOME TAX.

  1. 1700 o katumbas na Tax Certificate BIR Form 2316  - para sa mga individual na may trabaho at Employer
  2. 1701 - para sa may iba't ibang pinanggagalingan ng kita o income
  3. 1701A - para sa mga may kinita mula sa pagnenegosyo o business.
  4. 1702 - para sa mga Corporation at iba pang mga kompanya na nabuo sa pamamagitan ng batas.
Tandaan ang mga forms na ito ay mula sa BIR, pag ito ay ating ginamit at mai-file sa BIR ito ay nagiging Public Document kung kaya pwede na itong gamitin sa mga legal na pangangailangan, tulad ng pagkuha ng loans.

Hindi pwedeng gamitin ninuman ang mga ITR forms na nabanggit kung walang basehan na kita o walang pinangagalingan ang mga nakasaad dito.

Mahalaga na may tatak ng BIR ang ITR bago ito magamit sa iba't-ibang pamamaraang legal.

Ang tatak ng BIR ang magpapatunay na ang ang ITR na ipini-present natin ay OFFICIAL at may katumbas na kopya na tinanggap ng BIR. 

Hindi naman ibig sabihin na hindi na tayo pwede mag-apply ng loan kung wala tayong  ITR. Maari pa rin tayo mag loan, subalit mababang halaga (Small Personal Loan) lamang  ang maaarin nating ma-loan. Karaniwang proof of income lamang ang kailangan, maliban sa mga personal na detalye.

Ang mga Minimum Wage Earners, MWE ay exempted sa sa pagbabayad ng Income Tax at hindi na kailangan mag-file ng ITR, pwede pa rin sila mag-avail ng loan gamit ang BIR form 2316, Certificate of Withholding, na ibinibigay ng mga employer tuwing natatapos ang taon

Kung nais ninyo ng mga gabay o tulong para makapag-loan mula sa iba't ibang Financial Institutions kung ito man ay Personal Loan, Business o Housing Loan. Mag email lamang kayo sa amin;

Kami ay  handang tulungan kayo.

Friday, March 3, 2023

Ano Ang Dapat Unang Gawin BIR Registration o Business Permit?

Ano nga ang dapat maunang gawin Bir Registration o pagkuha ng Business Permit?

I answered that question several times already with clients. 

For ease and convenience, the Bureau of Internal Revenue (BIR) released Revenue Memorandum Circular (RMC) No. 57-2020 removing Mayor’s Permit as one of the mandatory requirements for registering a business with the agency. The removal is part of the streamlined registration requirements and revised documentary requirements checklist to further ease doing business in the Philippines. and;

As a matter of fact, anyone can register their business conveniently online with the BIR's NewBizReg Portal.

I need to answer a client's inquiry straight to the point not citing convenience, but a more substantiated answer is required even if my answer might go against their will.

I always say for me.... better to do your business permit first. WHY?

BIR registration is easy to do and complications of getting the business permit sometimes derail the timeline or the target schedule the business should start. What if your supposed business might have issues against some of the municipality ordinances or simply your landlord does not want to sign a lease agreement. These scenarios might delay the business to commence for say one month, two months or more while resolving issues and other matters about the proposed business. and;

You already register the business with the BIR ,so you need to comply by submitting related tax returns while the business is still not in operation.

You can submit a no payment return. NO PROBLEM.. but what if you overlooked the BIR registration because you are busy resolving issues with your business permit processing. Take note that non submission of returns on time entails a penalty of P1000.00 per return.

But then it is for the client to decide, I just answered the question in my own opinion. 

ELEDGER BOOKKEEPING AND ACCOUNTING SERVICES:
Our Services: Bookkeeping and Accounting , Tax Compliance
Business Registrations : DTI, SEC, BIR, Mayor's Permit, SSS,
PHI,, HMDF-Pagibig,
  Send us Email 
elbas.main@gmail.com

Income Tax Return Forms for Individual Taxpayers - as provided for by the New Tax Reform Laws (TRAIN)

April 15, 2023 Income Tax Filing is fast approaching and for that note, I would  like to highlight important issues about ITR filing of individual taxpayers.

There are three (3) types of ITR forms (Shown Below) available for individuals which were introduced in the new Tax Reform Laws (TRAIN) using any of these depending on the activities being performed by the taxpayer and depending on the manner of determining the tax due.



    • The Form 1700 – is to be used by individuals earned purely compensation income, but their earnings came from various employers during the year, as such they did not qualify for substituted filing. With this form, all income generated from various employment has to be summed up, to get the taxable income; refer to the applicable tax table to determine the tax rate applicable to come up with the TAX DUE; from the computed tax due all the taxes withheld by the employer(s) supported by a withholding tax certificates (BIR Form 2316) is to be deducted and the remaining if any has to be paid on or before April 15, of the filing year. 

    • The Form 1701 – to be used by individuals who have mixed income, Estate and Trusts.

      M
      ixed Income means the individual taxpayer earned from employment and the same time from running a business on the side. 

      Trusts and Estates are legal structures that administer assets while the transfer is in progress going to the heirs and beneficiaries.

      Use this form 1701 if there's income to combine side by side from other sources, the most relevant example is income from employment and business; and when the taxpayer opted to use  the Graduated Tax Rate with an Itemized Deduction Method.

    • Form 1701A – to be used by individuals earning only from business and or profession. This form is to be used also by individual taxpayers who opted for the Optional Standard Deduction Method (OSD) or those taxpayers who availed of the 8% flat rate vs the gross income lieu of percentage tax and income tax.
    I hope that this simple presentation helps individual taxpayers shed out confusions which form to use for their ITR filing for the year ended 2022.