Electronic Alphalist of Employees and Payees in Philippines

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By: Garry S. Pagaspas In another effort to enhance tax compliance in the Philippines, the Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 1-2014 dated December 17, 2013 on submission of alphabetical list or alphalist of employees and list of payees on income payments subject to withholding taxes in the Philippines. Amendment to Revenue Regulations No. 2-98 Revenue Regulations No. 1-2014 (RR No. 1-2014) was issued to amend Revenue Regulations No. 2-98, as last amended by Revenue Regulations No. 10-2008 on submission of alphabetical list or alphalist of employees and list of payees on income payments subject to withholding taxes in the Philippines. Specifically, RR No. 1-2014 amended Section 2.83.3 of Revenue Regulations No. 2-98 on requirements for the list of payees. Mandatory Electronic Submission  Under RR No. 1-2014, all withholding agents (regardless of the number of employees and payees, and whether employees or payees are exempt or not) are

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Components of Audited Financial Statements in Philippines

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By: Garry Pagaspas, CPA For a simple layman or average entrepreneur, financial statement is just a simple document that needs to be signed by a certified public accountant in the Philippines and needs to be attached to the annual income tax return. On a technical sense, they, are not just simple documents, but a sacred report or statement about the business that is being looked upon by related government authorities as a serious requirement upon business establishment. Under the present rules, audited financial statement in the Philippines is something that business owners, entrepreneurs, company officers, and corporate board members or trustees should give due regard. Securities and Exchange Commission (SEC) is now looking into the details of the audited financial statements in the Philippines to determine extent of compliance with accounting rules, e.g. Philippine Financial Reporting Standards (PFRS). Bureau of Internal Revenue (BIR) is likewise looking at the audited financial

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Accreditations of Independent CPA Auditors in the Philippines

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By: Tax and Accounting Center Philippines Under the present rules applicable to registered and licensed certified public accountants in the Philippines, not all of them can just conduct an audit and sign in the audited financial statements. Before one could conduct an audit of the financial statements in the Philippines , the independent CPA must be qualified and must duly accredited. Here are some of the registrations and/or accreditations a certified public accountant in the Philippines normally required prior to the conduct of an audit on the financial statements for filing with the Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), and other government agencies: 1. Board of Accountancy (BOA) Accreditation of CPAs Philippines Board of Accountancy (BOA) is the professional board of Certified Public Accountants in the Philippines under Professional Regulation Commission (PRC), a government agency administered to register and regulate professionals in the Philippines.  BOA accreditation is

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SEC Rules on Deposit for Future Subscription in the Philippines

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By: Garry S. Pagaspas, CPA Fore registration of a corporation in the Philippines, capitalization is regulated as to minimum amount and is affected by nature of operations, extent of foreign ownership, targeted export market, and other factors. On top of the minimum amount, corporation should be aware of the funding for the operational needs of the company in order to set the healthy level of capitalization that would support the pre-operational financial requirements. At times, the minimum capitalization requirements of the Securities and Exchange Commission (SEC) may not be sufficient to cover operational financing requirements. Corporations then, ends up securing financing from the stockholders and related parties to meet the financing needs. Such amounts secured is sometimes recorded in the books of accounts as follows: Advances from stockholders; Advances from officers; Advances from affiliates; Deposit for future stock subscriptions; or Any other similar account The choice of account titles in

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Mandatory Audited Financial Statement with SEC Accredited CPA

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By: Tax and Accounting Center Philippines An independent certified public accountant (CPA) in the Philippines may not be able to conduct an audit on any and all entities, corporations, and organizations. This would mean that an independent CPA auditor in the Philippines should be qualified and accredited in order for it to conduct an audit and sign on an audited financial statements. Under Rule No. 68, as amended, financial statements required to be submitted with the Securities and Exchange Commission (SEC) shall be accompanied by an auditor’s report who is accredited by Board of Accountancy (BOA). Moreover, the following entities are required to be audited by an independent CPA with corresponding accreditation before the Securities and Exchange Commission (SEC) in addition to their accreditation with the Board of Accountancy (BOA): Group A SEC Accredited CPA in Philippines Issuers of registered securities which have sold a class of shares under Section

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AD.HOC Shirts Phils Yolanda Victims Fund Raising

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By: Ad.Hoc Philippines Shirts AD.HOC: For this advocacy. Youth on the Move. Blasting in the news, Typhoon Yolanda’s unimaginable strength struck the Philippines, Nov. 8, 2013. The strongest typhoon in the whole world for this year, and one of the deadliest ever recorded in the history, has brought drastic damages to our country. As the fading gust of winds unveiled the aftermath scenario, we, as were safe in our comfortable places, couldn’t think, “What if I were there, struggling to live. “ As burdened by different stories of survival, heartbreaks, trauma, evident crimes, struggle for the scarcity of necessities, we realized, “We cannot just watch the news and cry. We must do something.” It was November 14, Thursday, almost a week after the storm struck, the idea of putting up a fund raising project for the benefit of the Typhoon victims just came out of our Facebook conversation tackling about

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My Relief to Guiuan Samar Victims of Typhoon Yolanda Haiyan

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By: Garry S. Pagaspas, CPA I had been hearing about the strength of Super Typhoon Yolanda (international name – Haiyan) and was confident as Eastern Samar and Leyte are favorite routes of 19 to 20 typhoons a year so people are used to it based on experiences of past years. After the storm has passed last Friday (9 November 8, 2013), we lost contact with our family members and relatives and maintain such confidence until a news feed of Ted Failon from ABS-CBN News on the worst impact of Super typhoon Yolanda on Tacloban City, Leyte alarmed us. Without wasting much time, I along with some sisters and brothers decided to go home Eastern Samar (Lawa-an and Guiuan), and Tacloban CIty, Leyte to check on our family members, relatives, and friends. We drove last Saturday night (11PM, November 9, 2013) for 25 hours to Guiuan, E. Samar to check on

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What input VAT is allowed for VAT refund or tax credit in Philippines?

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By: Garry S. Pagaspas Under Section 1, Article III – Bill of Rights of the Philippine Constitution and hereunder quoted: “No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied equal protection of the laws” The above provision could have been the source of input value added tax (VAT) rules under the National Internal Revenue Code or Republic Act No. 8424, as amended. Input VAT in the Philippines is passed on by value added tax suppliers to its buyers and in the books of accounts of VAT registered buyer, the same is normally accounted for as an “asset “or simply a “property” in the context of the above provision in the Constitution. In effect, input VAT as a property could not simply be forfeited by the government through the Bureau of Internal Revenue (BIR) without the requisite due process.

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Mandatory TIN of Foreigners on SEC Papers in Philippines

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By: Garry S. Pagaspas, CPA Securities and Exchange Commission (SEC) in the Philippines issued Memorandum Circular No. 1-2013 (SEC MC 1-2013) dated January 7, 2013 entitled “Mandatory Incorporation of the Tax Identification Number (TIN) of Foreign Investors in All Forms, Papers and Documents Filed with the SEC”. This SEC MC. No. 1-2013 is intended to take effect immediately from its issuance last January 2013. SEC MC 1-2013 in relation to BIR Revenue Regulations No. 7-2012 Said SEC MC. 1-2013 was issued in relation to Revenue Regulations No.  7-2012 (RR No. 7-2012) dated April 2, 2012 entitled “Amended Consolidated  Revenue Regulations on Primary Registration, Updates and Cancellation” where Section 4(1)(V) provides as quoted below: “Section 4(1)(v) – Non-resident Aliens not engaged in Trade or Business (NRANETB) or non-resident foreign corporation (NRFC) shall be issued TIN’s for purposes of withholding taxes on their income from sources within the Philippines. The withholding agent

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How to apply Excess Input VAT Refund or Credits in Philippines?

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By: Garry S. Pagaspas, CPA Value added tax (VAT) rules in the Philippines allows recovery of excess input VAT of taxpayers engaged on certain transactions specified in the National Internal Revenue Code (NIRC or Tax Code), as amended. In this article, let us take up the process of application for excess input VAT refund or tax credit certificate in the Philippines and the related considerations. What are input VAT allowed for VAT refund or tax credit Philippines? Under the National Internal Revenue Code o 1997 or Republic Act No. 8424 (NIRC or RA 8424 or Tax Code), as amended, the following could be applied for input VAT refund or tax credit certificate: Excess input VAT on zero-rated transactions under Section 112 (A) of the Tax Code Excess input VAT upon dissolution under Section 112 (B) of the Tax Code Excessive or erroneous VAT payments under Section 229 of the Tax

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