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philtaxation
Under Revenue Regulations No. 18-2011 dated September 21, 2011, VAT-registered taxpayers who shall fail to separate the value-added tax (VAT) component in the sales invoice (for goods), or official receipts (for services) shall be penalized upon conviction as follows:a. Fine of not less than P1,000 but not more than P50,000, and,b. Suffer imprisonment of not less than two (2) years but not more than ten (10) years.Comment:This is not actually a new requirement to separate the VAT component in the invoice or receipt for transparency purposes, but only to penalize those who do not comply the same. Problem may arise if the seller does not indicate the VAT passed on because if a VAT receipt/invoice is issued, it presupposes that a VAT is imposed so the tendency of the business buyer is to divide...
Friday, December 23, 2011
Wednesday, September 28, 2011
Income Taxation of Proprietary Educational Institutions
For tax income tax purposes, educational institutions are classified as follows: Proprietary educational institution;Non-stock, non-profit educational institution; or,Government educational institution. In this Article, let us uncover how a proprietary educational institution is being subjected to income tax. Definition Under the Tax Code, 'proprietary educational institution' is any private school maintained and administered by private individuals or groups with an issued permit to operate from the Department of Education, Culture and Sports (DECS), or the Commission on Higher Education (CHED), or the Technical Education and Skills Development...
Wednesday, September 21, 2011
BIR Tax Agent Practitioner (TAP) Accreditation
Tax practitioner/Agent – The following shall be deemed to be in tax practice and required to apply for accreditation those who are engaged in the regular preparation, certification, audit and filing of tax returns, information returns and other statements or reports required by the Code or Regulations; those who are engaged in the regular preparation requests for rulings, requests for reinvestigations, protests, requests for refunds or tax credit certificates, compromise settlement and/or abatement of tax liabilities, and other official papers and correspondence with the Bureau of Internal Revenue (BIR), and other similar related activities; orthose who regularly appears in meetings, conferences, or hearings before any office of the Bureau of Internal Revenue officially in behalf of the taxpayer...
Monday, September 12, 2011
Change in Accounting Period under RR No. 3-11
Revenue Regulations No. 3-2011 dated March 7, 2011 - "Regulations Providing for Policies, Guidelines and Procedures on the Application for Change in Accounting Period under Section 46 of the National Internal Revenue Code (NIRC) of 1997, as amended"Under Section 46 of the Tax Code, as amended, it provides and hereunder quoted:SEC. 46. Change of Accounting Period. If a taxpayer, other than an individual, changes his accounting period from fiscal year to calendar year, from calendar year to fiscal year, or from one fiscal year to another, the net income shall, with the approval of the Commissioner, be computed on the basis of such new accounting...
Overseas Communication Tax Under RR 11 - 2011
Revenue Regulations No. 11-2011 entitled "Revenue Regulations Defining Gross Receipts for Common Carrier's Tax for International Carriers pursuant to Section 118 of the Tax Code amending Section 10 of Revenue Regulations No. 15-2011" finally came up with a formal definition of Gross Receipts for International Carriers under Section 118 of the Tax Code as follows:"Gross receipts" shall include, but shall not be limited to, the total amount of money or its equivalent representing the contract or ticket prize, excess baggage fees, freight/cargo fees, mail fees, rental, penalties, deposit applied as payments, advance payments and other service charges...
Friday, September 2, 2011
VAT on tax-free transfer under RR No. 10-2011
Revenue Regulations No. 10-2011 dated July 1, 2011 entitled "Amending Certain Provisions of Revenue Regulations No. 16-2005, as amended by Revenue Regulations No. 4-2007, Otherwise Known as the Consolidated Value Added Tax Regulations of 2005, as amended" finally settled the issue of VAT on tax-free transfers of real property used in trade or business of a taxpayer.
Section 2 of RR No. 10-2011 reworded part of Section 4.106-8 of RR No. 16-05, as last amended by RR No. 4-07, as follows:
"X x x
However, the exchange of goods or properties including the real estate properties used in business or held for sale or for lease by the transferor, for...
Lessee Information Statement under RR No. 12-2011
Revenue Regulations No. 12-2011 dated July 25, 2011 entitled "Reportorial Requirements for Establishments Leasing or Renting Out Spaces for Commercial Activities" now requires a new reportorial requirement for lessors of commercial spaces.
All owners, or sub-lessors of commercial establishments/buildings/spaces to ensure that persons intending to lease is a BIR- registered taxpayer with tax identification number (TIN), BIR Certificate of Registration (COR), and duly registered official receipts or invoices.
Every 31st day of January and 31st day of July of the year, they are required to submit the following information, under oath, in hard...
Monday, August 15, 2011
Tax Credit Certificates (TCC) under RR No. 14-2011
A Tax Credit Certificate (TCC) may be used by the grantee or his assignee in the payment of his direct internal revenue tax liability except the following:payment or remittance for any kind of withholding tax;payment arising from the availment of tax amnesty declared under a legislative enactment;payment of deposits on withdrawal of exciseable articles;payment of taxes not administered or collected by the Bureau of Internal Revenue; andpayment of compromise penalty. Under Revenue Regulations 5-2000 dated August 15, 2000, BIR issued Tax Credit Certificates (TCCs) may be transferred in favor of an assignee based on the following conditions:the...
Wednesday, March 9, 2011
Tax on Corporate Dividends
In a corporate world, dividends is not a new topic. As a matter of fact, it is one of the major consideration for an investor to purchase shares of stock of a company. It represents the share in the net earnings distribution of a stockholders who own shares of stocks of a company. It could be in the form of cash, property, company's own shares or stock dividends and liquidating dividends upon liquidation and dissolution. It is basically sourced from the unrestricted or free retained earnings of the company made available through an action of the Board of Directors.Taxability of cash and/or property dividends would normally depend on the classification...
Sunday, February 20, 2011
15% income tax to expats, when applicable?
Revenue Memorandum Circular No. 41 – 2009 dated July 23, 2009 (RMC 41-2009) was issued to clarify the meaning of “Managerial and Technical Positions” under Section 25(C) of the Tax Code, as amended. This RMC sets out the qualifications and requirements in order that an alien employee (or Filipino employees) of a Regional Headquarters (RHQ) or Regional Operating Headquarters (ROHQ) of a multinational corporation shall be eligible for the 15% income tax rate on its gross compensation income. Hereunder is the summary of the RMC.Compared to the normal tax rate of 5-32% bracket 5-32%, if a resident alien or non-resident alien engaged in trade or...
Why are penalties imposed by the BIR?
At present, doing business is a bit an inch of perfection, if not a mastery of craft, in order to maximize the use of its finances for success. Many promising undertakings could be made on the funds wasted on penalties. Sometimes, no matter how and what measures are employed not to overlook some reportorial requirements, that they simply occurs unnoticed. This may prove that, sometimes, simple errors are big headaches in business. The question is why these penalties have to be imposed, even on honest mistakes and simple inadvertence?Taxes are the lifeblood of the government, without which, it cannot subsist. This dictates that taxes owing to...
What benefits can persons with disability enjoy?
Republic Act No. 9442 or otherwise known as “AN ACT AMENDING REPUBLIC ACT NO. 7277, OTHERWISE KNOWN AS THE “MAGNA CARTA FOR DISABLED PERSONS, AND FOR OTHER PURPOSES” (RA No. 9442) had been approved on April 30, 2009 and is implemented by BIR Revenue Regulations No.: 1-2009 dated Feb. 17, 2009 (RR No. 1-09). The amendment introduced specific benefits and privileges to persons with disability in relation to its purchases of certain goods or services, protection from public ridicule (making fun or contemptuous initiating or making mockery of persons with disability whether in writing or in words, or in action due to their impairment/s) and from...
What you should know about ROHQ?
Regional Operating Headquarters (ROHQ) (Section 2(3), RA No. 8756) means a foreign business entity which is allowed to derive income in the Philippines by performing the following qualifying services to its affiliates, subsidiaries or branches in the Philippines, in the Asia-Pacific Region and in other foreign markets: general administration and planning business planning and coordination sourcing and procurement of raw materials and components corporate finance advisory services marketing control and sales promotion training and personnel management logistic services research and development services and product development technical support...
Tourism Act of 2009, a new WOW Phils.?
Republic Act No. 9593 otherwise known as "Tourism Act of 2009" was approved into law on May 12, 2009. This declares Philippine Tourism as an indispensable element of the national economy and an industry of national interest and importance. This is a present major step that is expected to create major changes and developments in the tourism industry gearing towards socio-economic development expected to generate new jobs and massive investments.Along with this law, Department of Tourism as the implementing and regulating agency is bombarded with enough powers, strength, and capitalization for the effective furtherance of its purpose and implementation...
How can the BIR increase collections?
At present, we read on papers the many faces of financial crisis, budget deficit, failure to meet collection target, and the likes. Philippines in on a budgetary system where collections and expenditures are budgeted ahead. Expenditure is quite easy to meet as they simply spend on many things and in many ways, while collection targets are quite hard to attain. Instead of simply reading them, what about if we try to explore on ways and means where in our thinking, could help the BIR reach their targets. Presently, the legislature had passed some tax measures providing for some incentives that may negatively affect reaching collection targets...
Thursday, February 17, 2011
Allowable Deductions - Powerpoint
In computing the taxable income, certain deductions are allowed by the Tax Code to be deducted from the Gross Income. This is crucial to know because once you commit a mistake in deducting one that is not allowed, then you will made to suffer the penalties of 25% surcharge, 20% interest and compromise penalties. Take time to view those allowable deductions in this powerpoint presentations with references to the provisions of the Tax Code, as amended, or the corresponding implementing regulations.Allowable deductions.feb.2011View more presentations from Phil Taxation.For more free powerpoint presentations, please CLICK HERE!"Taxes affect lives,...
Director's Fees, how taxed?
Director’s fees is not entirely new in the business industry. Directors are the minds of the Corporation for it is the corporate governing body. Normally, they are not entitled to compensation, other than reasonable per diems, in the absence of an express provision in the By-laws. This is because directors are stockholders holding majority shares in most cases, and as such, more share of income goes to them through dividends. In other words, even without compensation, they will receive more through their considerable stock holdings and any mismanagement adversely affects them. In case the By-laws would provide compensation, the same shall not...
