By: Seala Marie O. Asis, CPA Filing income tax returns in Philippines is a recurring obligation of every taxpayer and made quarterly and annually for registered individuals in trade or business or practice of profession/ sole proprietorship or freelancers in Philippines (BIR Form No. 1701Q and/or 1701 ) and corporations that includes partnerships, one person corporations, resident foreign corporations, etc. (BIR Form No. 1702Q or 1702). Notably, annual ITR for corporations have made variations for regular (BIR Form No. 1702RT), exempt (BIR Form No. 1702EX), and those with incentives or mixed (BIR Form 1702MX) but this article would concentrate more on regular taxation for corporations or BIR Form No. 1702RT. Needless to say, accounting entries are more for accounting rules than for tax rules but could relate to taxpayer’s internal rules and preferences. Under this filing and payment periods, a bookkeeper in Philippines would have to make corresponding journal entries
By: Garry S. Pagaspas, CPA With the passage of Revised Corporation Code in Philippines or Republic Act No. 11232 (RA No. 11232) sometime February 2019, One Corporations Corporation (OPC) in Philippines is conceptualized to provide an additional legal structure to facilitate ease of doing business in the Philippines at par with other countries and jurisdictions. Relatively, legal provisions on One Person Corporation Philippines are found in Chapter III of Title VIII of Republic Act No. 11232 and is being implemented by SEC Memorandum Circular No. 7 series of 2019 and going through these rules, features of the One Person Corporation in Philippines could be enumerated as follows: 1. Single stockholder corporation As the name implies, this corporation is owned by a single stockholder, a natural person of legal age, trust or estate as compared to a now two (2) to fifteen (15) regular domestic corporation in Philippines under the Revised
By: Garry S. Pagaspas, CPA 1. Natural person only incorporators, majority Ph residents Under the old rules (Batas Pambansa Blg. 68 or BP 68), incorporators must be natural persons only and majority of such incorporators must be residents of the Philippines. This has been changed under the Revised Corporation Code or Republic Act No. 11232 (RA No. 11232) as incorporators of local corporation could now be natural personals and/or juridical persons – local or foreign. Philippine residency requirement is no longer required. This however, is subject to foreign investment rules for foreign ownership. Please refer to SEC MC No. 19 series of 2019 for incorporator guidelines. 2. At least five (5) natural person incorporators It takes at least five (5) to fifteen (15) natural person incorporators, majority of which are Philippine residents, to register a local domestic corporation in the past. Under the Revised Corporation Code, at least two (2)
By: Hergie Ann De Guzman (Update as of March 23, 2020) The entire Luzon was placed under Enhanced Community Quarantine as declared by President Rodrigo R. Duterte on March 16, 2020, for the prevention of the continuous spread of the Novel Corona Virus Disease (NCOV-19). While the Community Quarantine was being implemented, business owners and taxpayers are left with very limited actions for the continuance of their usual business and for the compliance of the statutory deadlines of certain returns and reports. To address these concerns, different government agencies such as Bureau of Internal Revenue (BIR), Securities and Exchange Commission (SEC), and Philippine Economic Zone Authority (PEZA) have released issuances and advisories. Below are the issuances/ advisories from each agency: Revenue Issuance Description RMC Date Date of Issuance RMC 25-2020 No Extension for the Filing and Payment of 2019 Income Tax Return March 16, 2020 March 17, 2020 RMC 26-2020
Arianne Keith Velasquez, CPA In view of the pandemic the whole world is suffering with recently, it is impossible for Filipinos to ignore the fact that the human respiratory system is not only being compromised here but also the livelihood of family providers such as employees under the no work, no pay policy. The sudden declaration of the Enhanced Community Quarantine in the entire Luzon after 48 hours of General Community Quarantine, which made it difficult to cross along city borders, hurts the pockets of many. On March 17, 2020, Proclamation No. 929, pursuant to Section 16 of Republic Act No. 10121, was issued by President Rodrigo Duterte to declare the Philippines under State of Calamity enjoining the government agencies to provide full assistance to the Filipino community with the great efforts to defy COVID-19. To wit, PAG-IBIG Fund is one of the established national saving programs providing financial assistance
By: Garry S. Pagaspas, CPA In line with the government’s handling of COVID-19 and pursuant to its regulatory power under Section 5.1(g) of Securities Regulation Code (SRC) and Section 179(o) of the Revised Corporation Code (RCC) Philippines, the Securities and Exchange Commission (SEC) Philippines has issued Memorandum Circular No. 5 series 2020 last March 12, 2020 granting an extension of time without penalty, within which to submit 2019 Annual Audited Financial Statements in Philippines covering the calendar year ended December 31, 2019 as follows: For companies doing domestic operations only: an extension of time until 30 June 2020; and, For companies with domestic and foreign operations: an extension of time until 30 June 2020 or 60 days from the date of lifting of travel restrictions/ ban by the concerned government authorities, whichever comes later. For such purpose of availing extension of filing 2019 Audited Financial Statements in Philippines of companies
By: Garry S. Pagaspas, CPA Revised Corporation Code (RCC) or Republic Act No. 11232 in the Philippines signed into law last February 20, 2019 has introduced major changes in the Corporation Code under Batas Pambansa Bilang 68 in the Philippines and among those are related to personalities and officers. Below is a summary of those in the sequence they appeared in the RCC that you could use as easy reference for dealings with your respective corproations, Securities and Exchange Corporation (SEC), and other related discussions. 1. Incorporators Incorporators in Philippines are the ones who originally form a corporation. Under the Old Corporation Code (OCC) or Batas Pambansa Bilang 68, an incorporator must be natural persons numbering at least 5 but not more than 15, must own at least one (1) share, and majority of which must be residents. This was changed under the Revised Corporation Code (RCC) or Republic Act
SECTION 313. Separability Clause. – If any clause, sentence, paragraph or part of this Code shall be adjudged by any Court of competent jurisdiction to be invalid, such judgement shall not affect, impair or invalidate the remainder of said Code, but shall be confined in its operation to the clause, sentence, paragraph or part thereof directly involved in the controversy. (Re-sectioned by RA 11534)
SECTION 312. In General. – All laws, decrees, executive orders, rules and regulations or parts thereof which are contrary to or inconsistent with this Code are hereby repealed, amended or modified according. (Re-sectioned by RA 11534)
Sec. 309. Prohibition on Registered Activities. – A qualified registered project or activity under an Investment Promotion Agency administering an economic zone or freeport shall be exclusively conducted or operated within the geographical boundaries of the zone or freeport being administered by the Investment Promotion Agency in which the project or activity is registered: Provided, That a registered business enterprise may conduct or operate more than one qualified registered project or activity within the same zone or freeport under the same Investment Promotion Agency: Provided, further, That any project or activity conducted or performed outside the geographical boundaries of the zone or freeport shall not be entitled to the incentives provided in this Act, unless such project or activity is conducted or operated under another Investment Promotion Agency. Sec. 310. Establishment of One-stop Action Center. – All Investment Promotion Agencies shall establish a one-stop shop or one-stop action center that
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