More Independent CPAs in tax evasion charges

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As a profession clothed with a level of ethical standards and a degree of professionalism, independent certified public accountants (CPA) are required and as such expected by the government and the public to exert much effort in the upkeep of such professional obligation. Independent CPAs are at a risk if it runs remiss of its duty and its professional license is at stake. Worst, it may end up in prison, and this is no joke! With the present aggressive tax compliance drives and collection programs (e.g. Run After Tax Evaders – RATE, etc.) geared towards strict implementation of the provisions of the National Internal Revenue Code, as amended (Tax Code), and attainment of the Bureau of Internal Revenue (BIR) collection targets, the indispensable professional services and cooperation of independent CPAs are of notable contribution. The BIR recognizes that the close partnership with the independent CPAs or those who conducts the

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VAT TCC Five-year Monetization Program

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Revenue Memorandum Circular No. 21-2012 dated May 3, 2012 circularizes the full text of Executive order No. 68 dated March 27, 2012 (E.O. 68 – 2012) entitled “Monetization Program of Outstanding Value-added tax (VAT) tax Credits Certificates (TCs)” For easy reference, hereunder are the summary of rules laid down in EO 68 – 2012: Five-year (2012-2016) VAT TCC monetization program is a mechanism to give the cash equivalent of outstanding VAT TCC for the government to promote conducive business environment and raise business credibility both locally and abroad; VAT TCCs covered are those TCCs secured under Section 112 (A) of republic Act No. 8424 (Tax reform Act), as amended, and drawback TCCs under Section 106 (e) of the Tariff and Customs Code of the Philippines (TCCP), as amended. Qualified VAT TCC holders shall have the following monetization options: Collect from a trustee bank a discounted value of their TCCs. Government

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Abatement of Penalties and Interest, When applicable?

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Revenue Regulations No. 4-2012 dated March 28, 2012 (RR 4-12)  and entitled “Amending Revenue Regulations No. 13-2001, Regarding Abatement or Cancellation of Internal Revenue Tax Liabilities” now provides an updated list of instances of abatement on the ground that the imposition thereof is unjust or excessive. Under RR 4-12, Section 2.6.1 of Revenue Regulations No. 13-2001 providing for abatement or cancellation of penalties and/or interest on the ground of one day late filing and remittance due to failure to beat the bank cut-off time  has been deleted. This in effect is saying that a one-day late payment because the taxpayer failed to catch up with the  bank’s cut-off time is not subject for cancellation of 25% surcharge, 20% interest and compromise penalties ranging from P200 to P25,000 depending on the amount of basic tax due. Section 2 of Revenue Regulations No. 13-2001 shall now read as follows: Section 2. Instances

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2nd Federball Spiel Badminton Tour Concluded

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Congratulations to Garry S. Pagaspas, CPA (our Resource Speaker) – Men’s Doubles – Level A Champion of the 2nd Federball Spiel Badminton Tour! Men’s Doubles Level A is composed of six (6) teams in two (2) groups – A and B. Each team will play against all within the group and after the round, the two teams with the highest number of wins will qualify for the quarter-finals, Rank 1 of Group A cross-over play with the Rank 2 Group B, and Rank 2 of Group A cross over play with Rank 1 of Group B. Quarter-finals winners will face-off for the championship match. Each match is a 35-point one, except for the championship match that is play of tow 21-point sets, and one 11-point decisive match. With Garry’s partner, Sir Patrick-CPA from DKS, they made it to the top with their straight wins in all their matches. The CPA

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How to compute Optional Standard Deductions (OSD)?

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Under the advent of Republic Act No. 8424 otherwise known as “The Tax Reform Act of 1997” (RA 8424), OSD is applicable only to individual taxpayers engaged in trade or business, or engaged in the practice of profession. It is computed at ten percent (10%) based on the gross profit after deducting the cost of sales or cost of service like the illustration below based on assumed figures: Gross sales/receipts                                                       P220,000 Less: Sales returns, discounts & allowances             20,000 Net Sales                                                                             P200,000 Less: Cost of sales/service                                               70,000 Gross profit                                                                        P130,000 OSD rate                                                                                      10% Allowable deduction – OSD                               P  13,000   Based on the amendment of Republic Act No. 8424 introduced by Republic Act No. 9337 (RA 9337), OSD is now applied at forty percent (40%) of net sales without deducting cost of sales or service for individuals, or forty percent (40%)  based on gross profit after deducting cost of

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Our Speaker and Coordinator into Badminton Tour

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Our Resource Speaker – Garry S. Pagaspas, CPA, and our VP-Finance & Coordinator – Jobelle O. Mendoza, CPA has long been into badminton sports. Garry had his first badminton court experience in the later part of 2006, while Jobelle had her first badminton encounter in 2007. Since then, they became badminton buddies crashing some tournaments and queuing in some courts within Metro Manila. They are most frequent players of Planet Badminton – J. Victor St., Makati City, and Powersmash Badminton – Pasong Tamo, Makati, and a seasonal players in other courts within Metro Manila. Despite their busy schedules in the office, they find time to escape with their badminton rackets, shoes, and outfits at least once a week after office hours to play badminton and burn some fats, drive some work stress, and maintain physical fitness to do the office works.  For them, badminton is not just a simple physical

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Tax Savings on SME education

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With much due respect, we disagree with the notion that education is costly, and instead, we submit that ignorance is more costly! Let me share hereunder our views. As Article 3 of the Civil Code of the Philippines puts it, and hereunder quoted: “Ignorance of the law excuses no one from compliance therewith.” This is a sad truth for the entrepreneurs. For an entrepreneur, large or small, everyday is a great competition that if one could not stand ground, it may loss the battle. One entrepreneur might have great business ideas for operations and marketing, but if it does not possess the required knowledge in complying applicable rules and government requirements, its hard earnings may simply go to government coffers in the form of unexpected dues such as penalties for simple lapses, or worst to private pockets.  As the saying of Martin Luther King, Jr. says: “Nothing in the world

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BIR Audited Financial Statements, when mandatory?

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By this post, let us answer the question of SMEs on whether or not financial statements to be attached to their annual income tax returns (ITR) in Philippines are mandated to be audited by an independent Certified Public Accountant. Section 232 of the Tax Code, as amended provides, and hereunder quoted: “Section 232. Keeping of Books of Accounts. – (A) Corporations, Companies, Partnerships or Persons Required to Keep Books of Accounts. – All Corporations, Companies, Partnerships or persons required by law to pay internal revenue taxes shall keep a journal and a ledger or their equivalents: Provided, however, That those whose quarterly sales, earnings, receipts, or output do not exceed Fifty thousand pesos (P50,000) shall keep and use simplified set of bookkeeping records duly authorized by the Secretary of Finance where in all transactions and results of operations are shown and from which all taxes due the Government may readily

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Bookkeeper and Auditor, Understanding their Works

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For small & medium entrepreneurs, this has long been a misconception. For most, this works as “two birds for one stone” because for them, having a bookkeeper is likewise having an auditor. This is not how it is and we wish to share the distinctions below for guidance and better appreciation. To start with, bookkeeping is different from auditing. Bookkeeping deals with maintaining the records of the day to day transactions on the books of accounts of the taxpayer. In practice, it includes preparation of monthly and quarterly BIR reports (withholding returns, VAT or OPT returns, and income tax returns). On the other hand, auditing is the periodic examination on the work of the bookkeeper or company prepared financial statements lifted from the books of accounts to express an opinion on whether or not such records were maintained in accordance with existing accounting rules, the generally accepted accounting principles. Auditor

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May 2012 New CPAs, Congratulations!

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Congratulations to the 1,995 New CPAs out of the 5,315 takers! The Professional Regulations Commission (PRC) has just released today the results (one-day processing) of the May 2012 Certified Public Accountant (CPA) Board Examinations held last May 13-14 and 20-21 at Metro Manila, Baguio, Cagayan De Oro, Cebu, Davao, Iloilo, and Legaspi. Hereunder are the Top Ten (10) successful examinees: Rank 1 – Manuel Pillora Buensuceso Jr of San Beda College – 94.86%; Rank 2 – Kathrine Rose Co Catinding of UST – 94,43%; Rank 3 – Grace Menor Albunian of TIP- Manila – 93% Rank 4 – Gianna Tan Chua of USC – 92.57% – Monique Kris Florante Villaflor – 92.57% Rank 5 – Richard Lei Paciencia Canete of EVSU, Tacloban – 92.43% –  Bonvin Go Nuqui of DLSU Manila – 92.43% Rank 6 – Benson Pabiona Kotah of Ciang Kai Shek College – 92.14% – Rowell Canda Marasigan

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