It’s the busy season of the year again where we have to prepare our financial statements, inventory listing, and other reports such as tax returns and the required attachments therein. For guidance, please see the list of information below that a taxpayer must know and prepare for before the due date:
1. Renewal of Registration
Every start of the year, a taxpayer is required to file and pay the registration fees to their respective RDOs and LGUs. The deadline for annual payment of business registration renewal is every 20th of January. However, a taxpayer has an option to renew their registration quarterly which is due every 20th day after the close of each quarter. On the other hand, an Annual Registration fee of Php500.00 is required to be filed and paid to the BIR on or before January 31 using BIR Form No. 0605.
Permit applications are required at both the Barangay and Municipal levels. In addition, companies must also pay the business permit fee, local business taxes and any additional charges imposed by the LGU.
2. Registrations and Submission of Books of Accounts
There are several types of Books of Accounts that can be registered with the BIR. To learn more about the different types of BOAs, click here.
These are the requirements for each type of Books of Accounts:
1. Manual Books of Accounts
According to RMC 82-2008, the only time Manual Books of Accounts will be renewed or re-stamped is if only it has been fully used from cover to cover. This type of BOAs is not required to be submitted annually to the BIR. But, this may be a requirement to be presented for auditing and tax mapping.
2. Loose-leaf Books of Accounts
Any business that maintains its accounting books via the loose-leaf books of accounts system is required to submit BIR approved accounting books and records for the year ending 31 December 2020. These books must be submitted on or before 15 January 2021.
An affidavit must also be submitted confirming the type of books, the number of pages, and the volume number of the books submitted. Remember to take note that to be entitled to file loose-leaf books of accounts, your company must first have been granted authorization by the BIR to use this system!
3. Computerized Books of Accounts
Companies that use the Computerized Accounting System (CAS) must submit their books (and any other accounting records and relevant media) in soft copy (CD-R, DVD–R) for the year ending 31 December 2020. Computerized books have to be submitted on or before 30 January 2021. An affidavit must also be submitted which confirms the completeness and accuracy of the computerized books.
3. Submission of Summary List (Alphalist)
The Bureau of Internal Revenue (BIR) recently issued Revenue Regulations (RR) No. 2-2015 to amend the pertinent provisions of RR No. 2-2006 and No. 11-2013 with regards to the submission of copies of BIR Form Nos. 2307.
The provisions of Section 2.D. of RR No. 2-2006 are amended as follows:
Section 2. Mandatory Submission of Summary Alphalist of Withholding Agents of Income Payments Subjected To Creditable Withholding Taxes (SAWT) by the Payee/Income Recipient and of Monthly Alphalist of Payees (MAP) Subjected to Withholding Tax by the Withholding Agent/Income Payor as attachment to their filed returns.
D. Return required to be filed with SAWT and Certificate of Creditable Tax Withheld at Source.
Provided, however, that the SAWT shall be submitted through the applicable modes of submission prescribed under RR No. 1-2014, using the entry and validation module of the BIR. On the other hand, in lieu of the submission of hard copies of Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) as an attachment to SAWT, the following procedures shall be strictly observed:
1. Scan the original copies of BIR Form No. 2307 through a scanning machine of device;
2. Store the soft copies of BIR Form No. 2307 using the “PDF” file format with the file names alphabetically arranged in a Digital Versatile Disk-Recordable (DVR-R). The file name shall contain the following information separated by an underline:
a. BIR-registered name of the taxpayer-payor;
b. Taxpayer Identification Number (TIN), including the head office code or branch of the payor, whichever is applicable; and
c. Taxable Period.
4. Distribution and Submission of BIR Form 2316
BIR Form 2316 is a Certificate that has to be issued by employers each year and to each employee earning a salary. The Certificate outlines the total amount paid to the employee throughout the year and the total amount of taxes withheld from that employee during the same period.
For 2020, employers must issue BIR Form 2316 to each employee on or before 31 January 2021.
5. Filing of Annual Income Tax Returns and Audited Financial Statements
In general, except those exempted, companies or taxpayers engaged in business are required to submit to BIR, and Securities and Exchange Commission (SEC) (for corporations only), a copy of their Annual Income Tax Return (BIR Form 1701 or 1702) and Audited Financial Statements on or before April 15.
6. Filing of General Information Sheet
This is again a requirement of the SEC for stock corporations only. It must be signed by the Corporate secretary and must be submitted thirty (30) days after the actual annual stockholder’s meeting (For Domestic Corporation) or anniversary date of the issuance of the SEC license (For Foreign Corporation).
7. Submission of Inventory List and other requirements
All businesses that hold or sell inventory are obliged to submit Inventory Lists to the BIR. This relates to the year ending 31 December 2020. Inventory Lists should include schedules (in both hard & soft copy) of finished goods, works in progress, raw materials, supplies and stocks-in trade.
Inventory Lists must be submitted on or before 30 January 2021.
8. Summary list of regular suppliers
Per Revenue Regulations No 14-2008, large taxpayers (Top 5,000 individual/Top 20,000 Private Corporations) as determined by the Commissioner of the Internal Revenue, shall submit on semestral basis a summary list of its regular suppliers of goods and/or services to the Large Taxpayers Assistance Division/Large Taxpayer District Office on or before January 31 (for the 2nd semester: July to December) and July 31 (for the 1st semester: Jan to June).
To conclude, this article has summarised the annual compliance requirements of companies or taxpayers engaged in business. There may be other annual reportorial requirements needed by your company depending on the industry, formation, and size such as reports that need to be submitted to BOI (Bureau of Investments), PEZA (Philippine Economic Zone Authority), etc., which you may need further information and research to comply with.
