BIR Online Filing

QUESTION: Are all taxpayers now required to file tax returns online?

ANSWER: No, only the following group/type of tax payers are mandated to file using BIR Online Filing system.

1. Accredited Tax Agents/Practitioners and all its client-taxpayers;
2. Accredited Printers of Principal and Supplementary Receipts/Invoices;
3. One-Time Transaction (ONETT) taxpayers;
4. Those who shall file a “No Payment” Return;
5. Government-Owned or -Controlled Corporations (GOCCs);
6. Local Government Units (LGUs), except barangays; and
7. Cooperatives registered with National Electrification Administration (NEA) and Local Water Utilities
Administration (LWUA)

Note that other types of tax payers can also file one - but not mandatory.

BIR Taxes for Small Business

The following are the most common BIR taxes applicable to small business or self-employed individuals. To ensure that you are aware of the all your BIR tax obligations, please check your Certificate of Registration (Form 2303). 

1. REGISTRATION FEE – This is annual fee of Php500 due every Jan. 31 of the year.

2. INCOME TAX – Ranging from 5% to 32% depending on your level of taxable income. Due quarterly (3) and annually.

3. BUSINESS TAXES (either VAT or Percentage Tax)
a. VAT if your gross income is more than P1.9M for the year – 12% of your gross receipts less VAT on purchases/expenses (you only pay the net amount)
b. PERCENTAGE TAX if you’re not subject to VAT – 3% of gross receipts

4. WITHHOLDING TAXES – taxes you withhold from your payments to suppliers and needs to be remitted to BIR. In short, BIR wants you to collect tax from your supplier and give it to BIR. This is not your tax but it is an obligation to collect tax. Common example is rental. You only pay your landlord net of 5% withholding tax and you are required to remit this 5% to BIR.

Audited Financial Statement and Income Tax Return with CPA certification

QUESTION: Do I need Audited Financial Statement with CPA certification in filing my Income Tax return?

ANSWER: The short answer is YES if your sales or gross receipts exceeded Php150,000 in any quarter during the year (or if you have more than Php600,000 for the whole year).

So, it depends on your level of sales/revenue/income. Our Tax Code says:

“…corporations, companies, partnerships or persons whose gross quarterly sales, earnings, receipts or output exceed One hundred fifty thousand pesos (P150,000) shall have their books of accounts audited and examined yearly by independent Certified Public Accountants and their income tax returns accompanied with a duly accomplished Account Information Form (AIF) which shall contain, among others, information lifted from certified balance sheets, profit and loss statements, schedules listing income-producing properties and the corresponding income there from and other relevant statements.”