Overview of Company Registration in the Philippines

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Starting your business right is crucial to its future success. Starting right means everything should be legal and registered. Registering a business in the Philippines requires entrepreneurs to comply with various requirements provided by relevant government agencies, such as SEC and DTI. Depending on your business entity, the documents you provide may differ from one or the other. Where to Register? Here are the government agencies where the company or entity is required to register in the Philippines and the stages of registration. Stage 1: Register the Company Name with the following government agencies: Stage 2: Obtain Business Permits from Local Government Unit (LGU) where the business address is located Stage 3: Register and process registration with the Bureau of Internal Revenue Stage 4: Register as an Employer with the relevant government agencies, such as: What are the capital requirements? Under the Revised Corporation Code of the Philippines or Republic

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Understanding the Importance of Annualizing Payroll in the Philippines

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Annualization reduces income swings and prevents tax fraud by dividing income and deductions over a full year. It allows for precise tax deductions from employee pay and makes it easier to comply with tax laws.

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RMO 25-2023:New Nationwide BIR Payroll System (NBPS) Guidelines

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To align with the Philippines’ Bureau of Internal Revenue’s digital transformation roadmap, there is a need to replace the outmoded and obsolete processing of payroll with a more contemporary and progressive payroll system. The Revenue Memorandum Order (RMO) no. 25-2023 issued on July 4, 2023, prescribes the policies, guidelines, and procedures for the preparation and processing of payroll in the National Office and Regional Offices using the new Nationwide BIR Payroll System (NBPS).  The new NBPS has a full integration module that can accurately capture personnel information necessary for the processing of payroll and the generation of reports. It can generate the weekly or semi-monthly General Office Payroll (GOP) for the salaries, Personnel Economic Relief Allowance (PERA), Representation Allowance and Transportation Allowance (RATA), including other monetary bonuses and incentives. NBPS has the following modules:  Encoding and updating of personnel information, which includes adding, editing, and viewing it in the Personnel

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NCR’s Minimum Wage Increased by PHP 40.00 Effective on July 16, 2023 

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The Regional Tripartite Wages and Productivity Board (RTWPB) in the National Capital Region (NCR) received several petitions filed by various labor groups seeking a minimum wage increase for all workers in the private sector. After due notice to all concerned stakeholders, the Board conducted consultations and a public hearing.  In settling the minimum wage, the Board considers the various criteria under Republic Act 6727, otherwise known as “The Wage Rationalization Act”, to periodically assess wage rates and conduct continuing studies in the determination of the minimum wage applicable to the region or industry. Compliance with the procedures laid down in the Omnibus Rules on Minimum Wage Determination to protect vulnerable workers from undue low wages was also considered. After a thorough review and evaluation of the existing socio-economic conditions in the region as well as the positions of the labor management, the following findings were established:  Based on the findings

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Regulatory Compliance on Excessive Retained Earnings

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One indicator that a business is in good financial standing is it has excessive retained earnings or accumulated profits. With this, users of the financial statements, for example, investors can decide whether to put up additional funds to expand business operations or banks may approve loan applications. The question is, when do you consider retained earnings excessive and what is the regulatory compliance associated with it? Retained Earnings; definition and classification Retained earnings in simplest words, is the excess profit accumulated and generated from business operations net of dividend payment to shareholders. It represents a portion of your business equity that may be used for investment in Research and Development, equipment, or business expansion for example. Retained Earnings may be classified further into two: Unrestricted and Restricted. Restricted retained earnings are those that a business may not distribute as dividends such as appropriation of retained earnings for a loan (as

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Understanding the Social Security System (SSS) in the Philippines

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Under the Social Security Act of 1997, Republic Act No. 8282, it is the policy of the State to establish, develop, promote, and perfect a sound and viable tax-exempt social security system suitable to the needs of the people throughout the Philippines, which shall promote social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden.  To carry out the purposes of this Act, the Social Security System (SSS) was born. The Social Security System is a social insurance program in the Philippines for compulsory and voluntary members. Compulsory members are those that are employed, self-employed, household helpers, and Overseas Filipino Workers (OFW), while voluntary members are the separated employees and the non-working spouse. SSS gives its members protection against the economic and social distress caused by contingencies such

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How to pay HDMF unpaid premiums from previous months or years?

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Contribution payments that are past due not only incur penalties but may also affect members’ benefits claims in the future. Employers must always make sure that the remittance of members’ contributions is timely and intact. However, there may be situations where payments are not remitted because of other unforeseen circumstances. To help employers address this kind of issue, we will discuss in this article the processes for the late remittance of HDMF contributions.  The first step is to fill out the latest Membership Savings Remittance Form (MSRF, HQP-TMF-381) and consolidate in one (1) MSRF all unpaid premiums of all employees, whether in months or in years.  Below is a sample, filled-out MSRF.  Below will be your guide to completing the Membership Savings Remittance Form (MSRF):  Examples:   Indicate ‘202301’ for MS remittances covering January 2022.  Indicate ‘202302’ for MS remittances covering February 2022.  Second, request the computation of penalties. Bring the

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Simple online payment methods for PHIC contributions in the Philippines

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PhilHealth no longer receives manual payment in their branches despite presenting the Certificate of Exemption (COE) from online payment to the cashier. PhilHealth recommends using the online payment facilities available in the Electronic Premium Remittance System (EPRS) portal. MyEG Philippines, Inc., effective October 14, 2022, a PhilHealth-accredited collecting agent for PhilHealth premium contributions, is now accepting online payments through the well-known e-Wallet giants, GCASH and Maya. Employers can also pay the contribution through a debit or credit card.  With this, the collecting agent no longer spends long hours in the queue. Individuals or companies can quickly and easily pay for a PhilHealth contribution online at any time using a smartphone or computer that is connected to the internet, and transactions will be done in no time with just a few clicks. There is no need to be a techie to perform the transaction, as the process is simple and the

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Late Filing and Out-of-District Filing of Tax Returns and Reports in Philippines

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The Bureau of Internal Revenue (BIR) in the Philippines issued Revenue Regulation (RR) No. 6-2023, dated April 11, 2023, on June 13, 2023, entitled “Amending Certain Provisions of Revenue Regulations No. 13-2010 Regarding Late/Out-of-District Filing of Tax Returns”. The BIR established and implemented more stringent policies and guidelines in the acceptance of late/out-of-district tax returns with the following: Let us look at how the BIR deals with the Late/Out-of-District filing and payment of tax returns. I. Non-Acceptance of Out-of-District and Late Filing Returns As a general rule, no AABs, RCOs, RDOs, LTDOs and LT Division in the Philippines shall accept Out-of-District Returns. As well as no acceptance of late filing of tax returns without imposition of applicable penalties such as Surcharge of 25% or 50% of basic tax due and Annual Interest of 12% under Sections 248 and 249 of National Internal Revenue Code (NIRC), and Compromise Penalty under Revenue

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Understanding The Non-Taxable Compensation In The Philippines

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Every payday, employees are elated to receive their monthly compensation. Once employees check their payslips, some wonder if their deductions are correctly calculated and properly deducted from their salary. To help employees and companies be informed of the associated rules and regulations, non-taxable compensation in the Philippines is briefly discussed in this article. As a general rule, all forms of compensation are taxable, except for those specifically provided under the laws, rules, and regulations in the Philippines. The following are the non-taxable compensations: No withholding tax shall be required for those employees who are identified as minimum wage earners in the private or public sectors as defined in RR 2-98, as amended by RR 11-2018. There’s no effect on the net taxable compensation unless it exceeds the PHP 90, 000 annual limit of the 13th-month pay and other benefits and unless the annual net taxable income exceeds PHP 250, 000.00

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