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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Sample Headaches with Outdated Bookkeepers

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For entrepreneurs, time is of the essence and while they may agree that they can do the accounting and bookkeeping by themselves after an education on basic business accounting and BIR compliance, paying for a bookkeeper or accountant is sometimes more practical. First, entrepreneur can concentrate more on operational aspect of the business. Second, the books of accounts and related compliance with applicable government rules and regulations could be more efficiently handled because the bookkeeper or the accountant is more knowledgeable on them. It is so saddening to say that based on the experiences of some small & medium entrepreneurs, not all bookkeepers and accountants are competent enough to properly handle the bookkeeping and proper compliance in keeping with the existing rules and regulations of the government agencies.  This is without prejudice to the accounting profession because this may not apply to all, but it appears that some have their

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Tax savings under Optional Standard Deduction (OSD)

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For taxpayers engaged in trade, business, or practice of profession, optional standard deduction (OSD) is a good are to look at for tax savings.  Under Section 34(L) of the Tax Code, as amended by Republic Act No. 9504 dated June 17, 2008, and hereunder quoted: “Section 34(L) Optional Standard Deduction. – In lieu of the deductions allowed under the preceding Subsections, an individual subject to tax under Section 24, other than nonresident alien, may elect a standard deduction in an amount not exceeding forty percent (40%) of his gross sales or gross receipts, as the case maybe. In the case of a corporation subject to tax under Sections 27(A) and 28(A)(1), it may elect a standard deduction in an amount not exceeding forty percent (40%) of its gross income as defined in Section 32 of this Code. Unless the taxpayer signifies in his return his intention to elect the optional

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Tax-exempt COLA increased by P30

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Good news for NCR workers! Under the Department of Labor & Employment (DOLE)- NCR’s Wage Order No. 17, minimum wage is increase by P30 cost of living allowance (COLA) as follows: First tranche – P20 per day upon the effectivity of Wage Order No. 17; and Second tranche – P10 per day effective on November 1, 2012. The new minimum wage rate under the Wage order No. 16 that took effect last 26 May 2011 of P426 for National Capital Region integrating the previous COLA of P22 will remain in force. Integrating the new COLA under the new Wage Order, the new minimum wage for non-agriculture sectors will now become P446.00 (P426+20) upon effectivity of the new Wage Order No. 17, and P456.00 (P446+P10) on November 1, 2012 or equivalent to P13,680.00 a month (P456.00 x 30 days). In effect, the minimum wage earners will now earn P600 more (P20

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Views on Real Estate Mortgage for Microlending

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A friend in the micro-lending industry once asked – “Is Real Estate Mortgage worth to look into for microlending?“ Let me share with you our view on the circumstances and benefits of Real Estate Mortgage (REM). REM is an accessory contract in the form of a collateral security for the  availment of the credit facility. As compared to a no collateral loan, REM may prove to be better as the lender would have some property to pursue upon default as compared to an empty hope in a non collateral situation. To be effective, a REM has to be in a legal document to be executed by the parties. Based on such document, it shall be annotated in the title of the real property (TCT or CCT) with the Registry of Deeds. The purpose of this is for the binding effect of the REM to third parties. Upon default, foreclosure proceedings

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Tax-exempt uniform allowance increased

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The Bureau of Internal Revenue (BIR) has issued Revenue Regulations No. 8-2012 – “Further amends Revenue Regulations 2-98 and 3-98, as last amended by Revenue Regulations 5-2008 and 5-2011, with Respect to de minimis benefits” or “RR No. 8-12“. Under RR 8-12, uniform allowance of P4,000 a year had been increased to P5,000 a year effective January 1, 2012. Being a deminis benefits, or provisions to employees of relatively small value for their general welfare, the same is exempted from withholding tax on compensation. To qualify for tax-exemptions, it is not required that the employer-taxpayer prescribes a particular company-wide uniform. What is required is that the employer-taxpayer actually provides such uniform allowance as a matter of policy. It could be given one-time of P5,000.00 anytime during the taxable year or at a uniform monthly rate  of P416.67 (P5,000 divided by 12 months). In effecting such de minimis benefits in BIR

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