To secure TIN (Taxpayer Identification Number) before starting his/her business. Only one TIN shall be given to a person required to file. Requirements: • Birth Certificate or any documents showing name, date of birth, address, place of birth and signature. In addition , if married with children: marriage certificate and birth certificate of dependent children below 21 years old. • BIR Form 1901, 1902 & 1903
2. Taxpayer should register on or before commencing his/her business. Documentary Requirements for Registration: Corporation (Head Office) • Taxpayer’s Identification Number (TIN) • Sketch of Business Address • Sec. Registration (Articles of incorporation) • Mayor’s Permit • Registration Fee(0605-OR) • Lease Contract(If Applicable) - Documentary stamps on lease(form:2000 & OR)
Documentary Requirements for Registration: If Branch • Xerox Copy of Head Office Registration Certificate • TRU (1903- Corporations/Cooperatives) • Branch Code-(TIN) • Lease Contract (if Applicable) • - Documentary Stamps on lease(Form; 2000 & OR 2pcs)
Individual/Single Proprietor • Taxpayer’s Identification Number (TIN) • Certificate from DTI • Sketch of Business Address • Mayor’s Permit • Birth Certificate • Filer • Qualified dependent(21 yrs. Old & below) If Applicable: • Marriage Contract • Lease Contract • Documentary stamps on lease (form:2000 & OR)
To provide himself with books of accounts duly registered with the bureau and must be renewed every December of any given year. • Simplified Books – for 50,000.00 or less • Ledger, Journal & Columnar Book – for 50,000.00 or more
4. Taxpayer who expects to pay salaries to employees more than the personal and additional exemption of the employees shall withhold and remit taxes to the BIR. Taxpayer registered as withholding agent shall compute, deduct and remit the withholding tax on or before the 10th day of the following month using BIR Form 1601E. Requirements: • Register employees under BIR Form 1902 • Update employees under BIR Form 2305
5. Taxpayer should provide himself with registered sales invoices and official receipt and must secure an Authority and Approval for Printing of said invoices. Requirements in Securing Authority to Print: For New Taxpayers • Job order • Final & clear sample of receipt & invoices(Machine printed) • Photocopy of the Following: * Application for Registration/TRU form or * Photocopy of taxpayer identification Number Card * Proof of payment of registration Fee * BIR Certificate of Registration
Requirements in Securing Authority to Print: For Old Taxpayers • Job Order • Final & clear sample of receipts & invoices- • (for a different type of receipt or invoices) • Photocopy of the following: • * Proof of payment of Registration Fee • * Previous Authority to Print Receipts and invoices • * BIR Certificate of Registration • Last booklet printed (for verification)
6. A taxpayer, irrespective of gross income is required to file his income tax return and pay tax due there on. INCOME TAX: Deadlines 1ST Qtr…….….………………..…….. April 15 2nd Qtr……….…………………….. August 15 3rd Qtr………..……………...…. November 15 Annual Income Tax Return….……… April 15
7. Taxpayer should file his/her business returns to avoid penalties for late filing and late payment. Deadline for Business Taxes VAT Monthly – on or before the 20th day after the end of each month VAT Quarterly – on or before the 25th day after the end of each quarter Percentage Taxes Monthly- on or before the 20th day of the following month
8. Taxpayer should inform the BIR in case of TRANSFER OF ADDRESS, CLOSURE or TEMPORARY CEASURE of OPERATION of his/her business/change in tax type or business activity. • Any change of status of the business and the taxpayer shall be reported under BIR Form 1905/2305
Double Taxation / Direct Duplicate Taxation DOUBLE TAXATION has been defined as • taxing the SAME PERSON twice • by the SAME JURISDICTION • for the SAME THING.
Double Taxation / Direct Duplicate Taxation “Direct Duplicate Taxation,” • the TWO TAXES must be imposed • on the SAME SUBJECT MATTER, • for the SAME PURPOSE, • by the SAME TAXING AUTHORITY, • within the SAME JURISDICTION, • during the SAME TAXING PERIOD; • and they must be of the SAME KIND OR CHARACTER.
Pertinent Laws Section 140 of the Local Government Code of 1992 (Republic Act 7160), • Amusement Tax • (a) The province may levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than THIRTY PERCENT (30%) OF THE GROSS RECEIPTS FROM ADMISSION FEES. • (b) In the case of theaters of cinemas, the tax shall first be deducted and WITHHELD BY THEIR PROPRIETORS, LESSEES, OR OPERATORS AND PAID TO THE PROVINCIAL TREASURER BEFORE THE GROSS RECEIPTS ARE DIVIDED BETWEEN SAID PROPRIETORS, LESSEES, OR OPERATORS AND THE DISTRIBUTORS OF THE CINEMATOGRAPHIC FILMS.
Pertinent Laws PRESIDENTIAL DECREE No. 449 - COCKFIGHTING LAW OF 1974 - May 9, 1974 • Section 6. Licensing of Cockpits. City and municipal mayors are authorized to issue licenses for the operation and maintenance of cockpits subject to the approval of the Chief of Constabulary or his authorized representatives. For this purpose, ordinances may be promulgated for the imposition and collection of taxes and fees not exceeding the rates fixed under Section 13, paragraphs (a) and (b); and 19; paragraph (g) 16 of Presidential Decree No. 231, dated June 28, 1973, otherwise known as the Local Tax Code, as amended.
Pertinent Laws Section 125 of the 1997 National Internal Revenue Code SEC. 125. Amusement Taxes. • There shall be collected from the PROPRIETOR, LESSEE OR OPERATOR OF COCKPITS, cabarets, night or day clubs, boxing exhibitions, professional basketball games, Jai-Alai and racetracks, a tax equivalent to: • (a) Eighteen percent (18%) IN THE CASE OF COCKPITS; • For the purpose of the amusement tax, the term “ gross receipts "EMBRACES ALL THE RECEIPTS OF THE PROPRIETOR, LESSEE OR OPERATOR OF THE AMUSEMENT PLACE. Said gross receipts also include income from television, radio and motion picture rights, if any. A person or entity or association conducting any activity subject to the tax herein imposed shall be similarly liable for said tax with respect to such portion of the receipts derived by him or it. • The taxes imposed herein shall be payable at the end of each quarter and it shall be the duty of the proprietor, lessee or operator concerned, as well as any party liable, within twenty (20) days after the end of each quarter, to make a true and complete return of the amount of the gross receipts derived during the preceding quarter and pay the tax due thereon.
Pertinent Laws Section 24 of the 1997 National Internal Revenue Code SEC. 24. Income Tax Rates. (B) Rate of Tax on Certain Passive Income. (1) Interests, Royalties, Prizes, and Other Winnings. - A final tax at the rate of twenty percent (20%) is hereby imposed upon the amount of interest from any currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements; royalties, except on books, as well as other literary works and musical compositions, which shall be imposed a final tax of ten percent (10%); prizes (except prizes amounting to Ten thousand pesos (P10,000) or less which shall be subject to tax under Subsection (A) of Section 24; and other winnings (except Philippine Charity Sweepstakes and Lotto winnings), derived from sources within the Philippines: Provided, however, That interest income received by an individual taxpayer (except a nonresident individual) from a depository bank under the expanded foreign currency deposit system shall be subject to a final income tax at the rate of seven and one-half percent (7 1/2%) of such interest income: Provided, further, That interest income from long-term deposit or investment in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas (BSP) shall be exempt from the tax imposed under this Subsection: Provided, finally, That should the holder of the certificate pre-terminate the deposit or investment before the fifth (5th) year, a final tax shall be imposed on the entire income and shall be deducted and withheld by the depository bank from the proceeds of the long-term deposit or investment certificate based on the remaining maturity thereof: • Four (4) years to less than five (5) years - 5%; Three (3) years to less than (4) years - 12%; and Less than three (3) years - 20%
REVENUE MEMORANDUM CIRCULAR NO. 8-88* Since the promulgation of the Local Tax Code which took effect on June 28, 1973 none of the amendatory laws which amended the National Internal Revenue Code, including the value added tax law under Executive Order No. 273,3 has amended the provisions of Section 114 of the Local Tax Code. Accordingly, the sole jurisdiction for collection of amusement tax on admission receipts in places of amusement rests exclusively on the local government, to the exclusion of the national government. Since the Bureau of Internal Revenue is an agency of the national government, then it follows that it has no legal mandate to levy amusement tax on admission receipts in the said places of amusement. ". . . Accordingly, only the gross receipts of the amusement places derived from sources other than from admission tickets shall be subject to . . . amusement tax prescribed under Section 228 of the Tax Code, as amended (now Section 123, NIRC, as amended by E.O. 273). The tax on gross receipts derived from admission tickets shall be levied and collected by the city government pursuant to Section 236 of Presidential Decree No. 231, as amended ." or by the provincial government, pursuant to Section 117 of P.D. 231, otherwise known as the Local Tax Code.
A. Registration Requirements • A.1 Failure to register • A.2 Failure to renew Registration • A.3 No “Certificate of Registration” displayed • A.4 No “Notice to the public” displayed
B. INVOICING REQUIREMENTS • B1.1 Failure to issue receipts/invoices • B1.2 Failure to secure authority to print • B1.3 Last entry to receipts/invoices is dated _____________ • B1.4 No receipts/invoices found in the business premises
B.2 Refusal to issue receipts/invoices • B.3 Duplicate copy of receipts/invoices in blank • B.4 Discrepancy in the receipts/invoices amount per taxpayer’s copy vs. purchaser’s copy • B.5 Possession or use of unregistered receipts/invoices
B.6 Possession or use of multiple sets of receipts/invoices B.7 Incomplete information in the receipts/invoices (printing of OR) - Incomplete information in the receipts/ invoices (entry in the OR) B.8 Receipts/invoices used other than the placed where it was registered
B.9 Use of unregistered Cash Registered Machines (CRM) &/or Point of Sales Machine(POS) or similar devices • B.10 Failure to maintain Cash Register Machine’s sales book • B.11 Failure to registers Cash Register Machine’s sales book • B.12 Failure to register CRM as cash depository only • B.13 Cash Depository CRM is used for issuing sales receipts/invoices • B.14 Failure to attach or paste original sticker in the machine authorizing the use of the CRM/POS or similar devices
B.15 Failure to attach or paste original sticker in the machine authorizing the use of the CRM for Cash depository only • B.16 Failure to display permit issued by the RDO (for CRM/POS) or similar devices • B.17 Failure to record daily sales to Cash Register Machine’s sales books not later than the following business day • B.18 Failure to provide CRM with two (2) roller tapes • B.19 Failure to notify the Revenue District Office prior to the transfer of CRM/POS or similar device to other business location • B.20 Use of CRM/POS or similar devices in a place other than specified in the permit
C. BOOKKEEPING REQUIREMENTS • C.1 Failure to Register Books of Accounts • C.2 Failure to keep Books of Accounts at the place of business • C.3 Failure to make daily entries in the registered Books of Accounts
Important: The Certificate of Registration will only be released by the BIR to the taxpayer after he/she has complied with all documentary requirements needed for registration and has attended in the Orientation on Basic Tax Regulations. This tax orientation aims to avoid future misunderstanding between the BIR and the taxpayers regarding the implementation of tax laws. Remember: “Ignorance Of The Law Excuses No One.”