BIR Concerns

[jackbrng]

very informative posts...i have a question, what if the family discovers that their late father had properties after 13 years? they have paid the municipal real estate taxes but are unsure how to proceed in transferring the ownership of the properties given the huge tax implications. what are the family's options to lessen the tax burden? the properties value range from Php 100 to 500k.

 

thanks for your advise.

 

bro, malaking problema yan! masyadong matagal bago na-discover yung properties ng decedent. Unanga-una, maaring kasuhan ng tax evasion yan. Yan ang ginamit laban sa mga Marcoses ng PCGG na na-dismiss dahil hindi daw nabigyan ng notice ang BIR ng pagkamatay ni Marcos. Pero sabi ng korte, dahil Presidente si Marcos at ang kanyang pagkamatay ay na publish sa mga dyaryo, imposibleng hindi malaman ng mga taga BIR na patay na si Marcos. Ang punto ko rito, kung nagamit kay Marcos, pwede rin itong gamitin sa ordinaryong mamamayan. Pangalawa, dahil sa katagal, maaring tumaas na ang market value ng mga property at ang basehan ng estate tax ay fair market value. Kung may kalakihan na ang market value, malaki rin ang estate tax, compare nung 13 taong nakakaraan. At dahil hindi na-file sa BIR ang pakamatay, may penalties na ito na malaki na rin dahil sa tagal ng panahon.

 

Ang nakikita kong solusyon ay mag-avail ang mga tagapagmana ng Tax Amnesty na ipinatupad noong September, 2007 at matatapos sa loob ng 6 na buwan. Dito sa Tax Amnesty, ang basehan ng tax ay ang networth ng taxpayer. Ang taxpayer sa scenariong binigay mo ay yung tagapagmana. Ang kanyang Ari-arian o Assets ay ibabawas sa kanyang mga obligasyon o Liabilities para makuha ang Networth. Bale ang buwis nya ay 5% ng kanyang networth. Yung kanyang ari-arian ay neto ng depreciation. Ang coverage ng amnesty ay para sa taong 2005 pababa. Kapag nakapag-avail sya ng amnesty, hindi na sya i-imbistigahan ng BIR dahil isa ito sa mga probisyon ng Tax Amnesty.

[aff1979]

bro, malaking problema yan! masyadong matagal bago na-discover yung properties ng decedent. Unanga-una, maaring kasuhan ng tax evasion yan. Yan ang ginamit laban sa mga Marcoses ng PCGG na na-dismiss dahil hindi daw nabigyan ng notice ang BIR ng pagkamatay ni Marcos. Pero sabi ng korte, dahil Presidente si Marcos at ang kanyang pagkamatay ay na publish sa mga dyaryo, imposibleng hindi malaman ng mga taga BIR na patay na si Marcos. Ang punto ko rito, kung nagamit kay Marcos, pwede rin itong gamitin sa ordinaryong mamamayan. Pangalawa, dahil sa katagal, maaring tumaas na ang market value ng mga property at ang basehan ng estate tax ay fair market value. Kung may kalakihan na ang market value, malaki rin ang estate tax, compare nung 13 taong nakakaraan. At dahil hindi na-file sa BIR ang pakamatay, may penalties na ito na malaki na rin dahil sa tagal ng panahon.

 

Ang nakikita kong solusyon ay mag-avail ang mga tagapagmana ng Tax Amnesty na ipinatupad noong September, 2007 at matatapos sa loob ng 6 na buwan. Dito sa Tax Amnesty, ang basehan ng tax ay ang networth ng taxpayer. Ang taxpayer sa scenariong binigay mo ay yung tagapagmana. Ang kanyang Ari-arian o Assets ay ibabawas sa kanyang mga obligasyon o Liabilities para makuha ang Networth. Bale ang buwis nya ay 5% ng kanyang networth. Yung kanyang ari-arian ay neto ng depreciation. Ang coverage ng amnesty ay para sa taong 2005 pababa. Kapag nakapag-avail sya ng amnesty, hindi na sya i-imbistigahan ng BIR dahil isa ito sa mga probisyon ng Tax Amnesty.

 

Regarding TAx Amnesty in application with Estate Tax, Ang basis ng Payment ay Networth ng Estate Property as of December 31, 2005 or Difference from previous filed networth ,multiply by 5% or a fix amount of 50,000 which ever is higher.

 

Networth is Total Asset less Total Liabilities

[vader2007]

bro, malaking problema yan! masyadong matagal bago na-discover yung properties ng decedent. Unanga-una, maaring kasuhan ng tax evasion yan. Yan ang ginamit laban sa mga Marcoses ng PCGG na na-dismiss dahil hindi daw nabigyan ng notice ang BIR ng pagkamatay ni Marcos. Pero sabi ng korte, dahil Presidente si Marcos at ang kanyang pagkamatay ay na publish sa mga dyaryo, imposibleng hindi malaman ng mga taga BIR na patay na si Marcos. Ang punto ko rito, kung nagamit kay Marcos, pwede rin itong gamitin sa ordinaryong mamamayan. Pangalawa, dahil sa katagal, maaring tumaas na ang market value ng mga property at ang basehan ng estate tax ay fair market value. Kung may kalakihan na ang market value, malaki rin ang estate tax, compare nung 13 taong nakakaraan. At dahil hindi na-file sa BIR ang pakamatay, may penalties na ito na malaki na rin dahil sa tagal ng panahon.

 

Ang nakikita kong solusyon ay mag-avail ang mga tagapagmana ng Tax Amnesty na ipinatupad noong September, 2007 at matatapos sa loob ng 6 na buwan. Dito sa Tax Amnesty, ang basehan ng tax ay ang networth ng taxpayer. Ang taxpayer sa scenariong binigay mo ay yung tagapagmana. Ang kanyang Ari-arian o Assets ay ibabawas sa kanyang mga obligasyon o Liabilities para makuha ang Networth. Bale ang buwis nya ay 5% ng kanyang networth. Yung kanyang ari-arian ay neto ng depreciation. Ang coverage ng amnesty ay para sa taong 2005 pababa. Kapag nakapag-avail sya ng amnesty, hindi na sya i-imbistigahan ng BIR dahil isa ito sa mga probisyon ng Tax Amnesty.

 

This is very, very helpful. Can your company help the family or can you refer an expert in this area? How much will it cost?rge? Please PM me. Thanks.

[jackbrng]

very informative posts...i have a question, what if the family discovers that their late father had properties after 13 years? ..... the properties value range from Php 100 to 500k.

 

 

Kapag 100-500k ang value ng property, hindi malaki yan!

 

kung isa lang ang property, hindi nga malaki. as a matter of fact wala silang babayaran provided nadeclare kaagad. PERO, ang sabi sa statement nya ay PROPERTIES at PROPERTIES VALUE RANGE FROM ...., so i assume marami ang properties plus the fact ng haba ng panahon na hindi na-i-file, kaya nasabi ko na malaki ang problema.

 

if you think otherwise ....................................................

[jackbrng]

very informative posts...i have a question, what if the family discovers that their late father had properties after 13 years? ..... the properties value range from Php 100 to 500k.

 

 

Kapag 100-500k ang value ng property, hindi malaki yan!

 

kung isa lang ang property, hindi nga malaki. as a matter of fact wala silang babayaran provided nadeclare kaagad. PERO, ang sabi sa statement nya ay PROPERTIES at PROPERTIES VALUE RANGE FROM...., so i assume marami ang properties plus the fact ng haba ng panahon na hindi na-i-file, kaya nasabi ko na malaki ang problema.

 

if you think otherwise ....................................................

[vader2007]

kung isa lang ang property, hindi nga malaki. as a matter of fact wala silang babayaran provided nadeclare kaagad. PERO, ang sabi sa statement nya ay PROPERTIES at PROPERTIES VALUE RANGE FROM...., so i assume marami ang properties plus the fact ng haba ng panahon na hindi na-i-file, kaya nasabi ko na malaki ang problema.

 

if you think otherwise ....................................................

 

You are correct. There are 3 properties involved.

[jackbrng]

You are correct. There are 3 properties involved.

pm mo sa akin location ng mga properties like address (street, barangay, city, province if any), size area at yung classification (kung residential, condominium, industrial, agricultural. kung agricultural paki sabi kung riceland, cocoland, etc.), subukan kong alamin kung magkano valuation at macompute yung estate tax.

You are correct. There are 3 properties involved.

pm mo sa akin location ng mga properties like address (street, barangay, city, province if any), size area at yung classification (kung residential, condominium, industrial, agricultural. kung agricultural paki sabi kung riceland, cocoland, etc.), subukan kong alamin kung magkano valuation at macompute yung estate tax.

[charmed shannen]

A contract of lease was executed in December 1971 for an initial term of 20 years subject to renewal between a corporation and a city government. A mall was constructed in a portion of the land covered by the lease. A portion of the mall constituting 22 units of commercial spaces including leasehold rights were transferred to a bank by way of dacion en pago for full settelment of a loan obligation. there was a proposal for the sale of leasehold rights on the said commerical units and on September 2003, sale of leasehold rights was totally consumated and as a consequence, VAT and DST were paid and remitted to the BIR.

 

Questions:

 

1) Was the transaction subject to VAT inasmuch as the instrument executed was one of assignment of rights which did not vest title to the transferee;

 

2) Was the transaction subject to capital gains tax, creditable withholding tax, documentary stamp tax, and VAT under Section 196 of the TAX Code?

 

3) Was the transaction partook of the nature of a sale of assignment of real property?

 

4) Was the contention that the deed of assignment was not a deed of sale because what was conveyed by the assignor was not the property but the rights pertaining to such property tenable?

 

5) Was the transaction entered in to by the bank with an individual and/or corporation was subject to VAT that was subsequently passed on to the buyer or assignee?

 

6) Was the classification of the property rights and interests subject of thet sale/assignment was correctly booked as ROPOA (real and other property owned and acquired or a property)?

 

7) Is a property acquired by way fo dacion en pago to satisfy borrower's loan obligation can be classified as ordinary asset?

 

As usual, thank you very much for all the help.

[jackbrng]

A contract of lease was executed in December 1971 for an initial term of 20 years subject to renewal between a corporation and a city government. A mall was constructed in a portion of the land covered by the lease. A portion of the mall constituting 22 units of commercial spaces including leasehold rights were transferred to a bank by way of dacion en pago for full settlement of a loan obligation. There was a proposal for the sale of leasehold rights on the said commercial units and on September 2003, sale of leasehold rights was totally consummated and as a consequence, VAT and DST were paid and remitted to the BIR.

 

1. Was the transaction subject to VAT in as much as the instrument executed was one of assignment of rights which did not vest title to the transferee;

 

Assignment of leasehold right was a VAT transaction. Although acquisition of the bank of said property by way of dacion en pago and its subsequent disposal were VAT exempt as per Section 4.109-1(u) of RR No. 16-2005, its assignment of leasehold right were subject to VAT as per Section 4.106-1 of RR No. 16-2005. In addition to this, subsequent rental or lease of said property will be subjected to VAT or Percentage Tax, depending on the amount of rental.

 

2. Was the transaction subject to capital gains tax, creditable withholding tax, documentary stamp tax and VAT under Section 196 of the Tax Code.

 

Assignment of Leasehold rights was not subject to Capital Gains tax since there was no transfer of capital asset, what was transfer / assign here is the right to use of property. Also, this was not subject to Creditable Withholding Tax since RR no. 2-98 did not mention it as one of the transactions subject to Withholding. However, subsequent rental that will be paid by the lessee will be subject to withholding tax. On Documentary Stamp tax, this transaction is subject to DST under Section 194 of the Tax Code and not Section 196 because the nature of transaction is to grant a right to use or lease said commercial unit and not to transfer the title of real property. Section 194 pertains to Contract of Lease which I assume fits your situation. For VAT, please refer to question no. 1.

 

3. Was the transaction partook of the nature of sale or assignment of real property

 

The transaction that transpired here was a assignment of right to use of real property.

 

4. Was the contention that the deed of assignment was not a deed of sale because what was conveyed by the assignor was not the property but the rights pertaining to such property tenable?

 

Based on the foregoing, my answer is in affirmative because on deed of assignment, the assignee exercises only the right to use of property, unlike with deed of sale, the buyer exercises not only the right to use but also the right to dispose, in other words, the buyer has right of ownership over the property.

 

5. Was the transaction entered into by the bank with an individual and / or corporation was subject to VAT that was subsequently passed on to the buyer or assignee?

 

Definitely. This was the function of Vat, to passed on every buyer until it stop on the end-consumer. Also, it is a tool to create a trail for tax monitoring of the BIR.

 

6. Was the classification of the property rights and interest subject of the sale / assignment was correctly booked as ROPOA (Real and other property owned and acquired or a property)?

 

I think it is correct and should classify under current asset because this asset that was acquire should be dispose immediately.

 

7. Is a property acquired by way of dacion en pago to satisfy borrower’s loan obligation can be classified as ordinary asset?

 

As per noted on Section 2 ( of RR No. 7-2003, Real Properties acquired by banks through foreclosure sales are considered as their ordinary assets.

[scooby91]

tanung lng po... upon death of a parent/s, passe don po ba sa mga anak ang utang nila? (i.e housing, auto loans, credit card)?

[jackbrng]

tanung lng po... upon death of a parent/s, passe don po ba sa mga anak ang utang nila? (i.e housing, auto loans, credit card)?

 

kung ang gusto mo malaman ay kung kayong mga anak na ang magbabayad ng utang na naiwan ng mga magulang nyo, mas maganda na itanong ito sa legal thread, dahil mas alam ng abogado ang mga usaping legal tungkol dito.

 

kung tungkol naman sa taxation, itong mga utang ay maaring ibawas sa halaga ng mga ari-arian na naiwan ng magulang nyo para sa pagkwenta ng estate tax.

[jackbrng]

sa mga fellow accoutants, ano opinyon nyo sa tax amnesty na ipinapatupad ngayon bungsod sa paglabas ng bir ng revenue memorandum circular no 69-2007?

 

may bisa kaya itong rmc na ipinalabas ng BIR lalo na sa mga puntos na hindi tugma sa batas na ipinasa ng kongreso?

 

sa opinyon ko ay masusunod pa rin yung mga probisyon na nakasaad sa RA no 9480 base na rin sa desisyon ng korte suprema (GR no. 109193 Republic of the Philippine vs. The Court of Appeals and Precision Printing Inc.)

 

kayo ano ang opinyon nyo?

[LYCHEE]

sa mga fellow accoutants, ano opinyon nyo sa tax amnesty na ipinapatupad ngayon bungsod sa paglabas ng bir ng revenue memorandum circular no 69-2007?

 

may bisa kaya itong rmc na ipinalabas ng BIR lalo na sa mga puntos na hindi tugma sa batas na ipinasa ng kongreso?

 

sa opinyon ko ay masusunod pa rin yung mga probisyon na nakasaad sa RA no 9480 base na rin sa desisyon ng korte suprema (GR no. 109193 Republic of the Philippine vs. The Court of Appeals and Precision Printing Inc.)

 

kayo ano ang opinyon nyo?

 

re sa computation ng estate tax based on the 5% rate under the tax amnesty, looks like hindi rin pala discounted o mas mababa ang mababayaran ko kng base rin sa fmv or zonal valuation ng property i inherited before 2005 but which i havent paid yet. i maybe wrong...paano po ba ang formula under the amnesty?--is it: 5% x zonal value of property (as of date of death of deceased)= estate tax?

[webmaster_ph]

distinguished accountants:

 

i have a couple of questions...

 

1. what are the taxes that will be applied to a business that is purely service-based (no products)?

2. do i need to declare books of accounts?

3. how do i go about printing/making thesebooks of accounts? any format or do i buy these?

4. any recommendations on how to minimize these taxes?

5. where can i avail of accountant's services (bir-accredited) to audit financial documents?

 

background info:

*business is a general partnership; 100% filipino-owned

*the income will come from local and overseas sources.

*gross sales may range from 300k to 1.0M

 

thank you.

[weekdaywarrior69]

tanong lang po sa mga autoridad pag dating sa taxation.

 

ano po ba ang sinasabi ng batas tungkol sa pagbabayad ng buwis ng isang partnership?

 

matapos na magbayad ng isang kumpanya (partnership) ng income tax sa kinita nito sa buong taon, ilang porsyento po ba ang marapat na bayaran (kung meron man) ng individual partners sa kanilang dibidendo. ito po ba'y itinuturing na personnal income tax na subject din sa parehong exemptions? di po ba parang dalawang beses na kinaltasan ng BIR ang partners kung tutuusin?

 

meron po bang work-around sa ganitong sitwasyon?

 

salamat po sa mga sasagot sa mga katanungan ko (di ko po alam kung naitanong na ito di po masyado malayo ang ginawa ko na pagbabalik basa).

[duralife]

sa mga fellow accoutants, ano opinyon nyo sa tax amnesty na ipinapatupad ngayon bungsod sa paglabas ng bir ng revenue memorandum circular no 69-2007?

 

may bisa kaya itong rmc na ipinalabas ng BIR lalo na sa mga puntos na hindi tugma sa batas na ipinasa ng kongreso?

 

sa opinyon ko ay masusunod pa rin yung mga probisyon na nakasaad sa RA no 9480 base na rin sa desisyon ng korte suprema (GR no. 109193 Republic of the Philippine vs. The Court of Appeals and Precision Printing Inc.)

 

kayo ano ang opinyon nyo?

 

 

your right fellow CPA, as mentioned in the case you cited..."The xxx ruling is in consonance with the tenet in administrative law that administrative issuances seeking to carry into effect an act of Congress must be in harmony with the provisions of the law, it cannot modify nor supplant the same"

[angel_by_day]

finally, the thread that i've been looking for.

 

my case is like this.

 

when i was a medical resident, the hospital which i was working for was the one filing my BIR forms (i think it was a 1700 form, if i remember it right) for 3 consecutive years. After residency, i got a letter from the BIR, sort of a summons, to explain why i didnt file my 1701 form for years (as a private physician). I didnt know i had to file that, since technically, i still havent started private practice then, and was considered employed by the hospital. I fixed it up, nevertheless, and was told by the BIR local office here in the east, to put zero in my 1701 form na lang, since wala pa nga akong private clinic....and that's what ive been doing for years now. Filing my 1701 form and putting 0 in the amount.

Would there be a problem with this?

[jackbrng]

tanong lang po sa mga autoridad pag dating sa taxation.

 

ano po ba ang sinasabi ng batas tungkol sa pagbabayad ng buwis ng isang partnership?

 

matapos na magbayad ng isang kumpanya (partnership) ng income tax sa kinita nito sa buong taon, ilang porsyento po ba ang marapat na bayaran (kung meron man) ng individual partners sa kanilang dibidendo. ito po ba'y itinuturing na personnal income tax na subject din sa parehong exemptions? di po ba parang dalawang beses na kinaltasan ng BIR ang partners kung tutuusin?

 

meron po bang work-around sa ganitong sitwasyon?

 

salamat po sa mga sasagot sa mga katanungan ko (di ko po alam kung naitanong na ito di po masyado malayo ang ginawa ko na pagbabalik basa).

 

bale yung partnership ninyo ay magbabayad ng 35% income tax. sa dividendo naman na paghahatian ninyo ay kakaltasan ito ng partnership ng 10% Final Withholding tax bago ibigay sa inyo. Yung nakaltas na 10% ay ire-remit naman sa BIR ng partnership ninyo. Yung income na ito ay ire-report sa income statement mo bilang individual as other income pero hindi na ito taxable dahil nakaltasan na ito ng Final withholding tax.

 

Sa tingin ko, mahirap lumusot sa ganitong sitwasyon dahil kung hindi magkakaltas ang Partnership ng Final Withholding Tax ay hindi pwede i-report na nakapagdistribute ng dividends ang partnership at lalaki ang retained earnings nito. Kapag lumaki at lumagpas ang retained earnings sa ceiling ng BIR, masa-subject ito sa Improperly Accumulated Earnings Tax (IAET), so tax na naman. Kapag dumating na sa ganitong punto, subject ka na sa Withholding tax, madadagdagan pa ng IAET, lalaki lang problema.

[jackbrng]

finally, the thread that i've been looking for.

 

my case is like this.

 

when i was a medical resident, the hospital which i was working for was the one filing my BIR forms (i think it was a 1700 form, if i remember it right) for 3 consecutive years. After residency, i got a letter from the BIR, sort of a summons, to explain why i didnt file my 1701 form for years (as a private physician). I didnt know i had to file that, since technically, i still havent started private practice then, and was considered employed by the hospital. I fixed it up, nevertheless, and was told by the BIR local office here in the east, to put zero in my 1701 form na lang, since wala pa nga akong private clinic....and that's what ive been doing for years now. Filing my 1701 form and putting 0 in the amount.

Would there be a problem with this?

 

Dapat may kaltas ang income payment ng hospital sa iyo at bigyan ka nila ng CERTIFICATE na yung kinaltas sa iyo ay na-i-remit sa BIR.

 

Kung ang natanggap mo sa hospital na certificate ay BIR Form No. 2316, EMPLOYEE ang status mo sa hospital, at ang Income tax Form na gagamitin ay BIR Form No. 1700. Kapag equal yung kinaltas sa iyo sa buong taon compare sa annual tax due mo, di mo na kailangan mag-file ng Income tax return (BIR Form No. 1700). Tawag dito ay substituted filing. Ngunit kung hindi equal ang withholding tax mo sa buong taon compare sa Income Tax due mo, kailangan mo mag-file ng BIR Form No. 1700.

 

Kung ang natanggap mo sa hospital na certificate ay BIR Form No. 2307, PROFESSIONAL o SELF EMPLOYED ang status mo sa hospital at ang income tax form na gagamitin ay BIR Form No. 1701. Ang rate ng withholding nito ay 10% kung ang income mo ay P750,000.00 or below at 15% kung above P750,000.00. Every time na tumatanggap ka ng payment galing sa hospital ay may kaltas ito. Sa una, dahil mababa pa sa P750,000.00 ang income mo sa kanila, 10% ang gagamitin nila. Kapag lumagpas na ng P750,000.00 ang income mo sa loob ng taon, mag-a-adjust ang hospital ng rate ng 15%. For example, Jan to May mo ay P700,000.00 ang accumulated income mo, so 10% ang withholding tax rate. Tapos yung June income mo ay P60,000.00, so magiging P760,000.00 na ang accumulated income mo sa taon, so 15% na ang withholding tax rate mo stating June. Bale withholding tax mo ay P9,000.00 (P60,000.00 x 15%). Tuloy-tuloy na itong withholding tax rate mo hanggang matapos ang taon. Next year, ulit na naman sa 10%, and so forth.

 

Dapat may withholding tax ang binabayad sa iyo ng hospital. At kahit anong uri pa ang withholding tax mo, dapat makakatanggap ka sa kanila ng CERTIFICATE. Kung EMPLOYEE ka, dapat makatanggap ka after year end. Kung PROFESSIONAL o SELF EMPLOYED ka, dapat bago ka mag-file ng Quarterly Income Tax mo ay makatanggap ka ng certificate dahil i-attach mo ito sa Quarterly Income tax mo bilang tax credit. Kung hindi ka binibigyan ng certificate, request ka muna sa accounting office ng hospital. Kung hindi ka pa rin binibigyan, report mo sa BIR.

 

Walang sense yung advise sa iyo ng BIR. Kung totoo EMPLOYEE ang status mo sa hospital nyo, presentation of BIR Form 2316 will be sufficient enough to prove your status. Di na kailangan mag-file ng 1701 with P0.00 sa kanila, doble trabaho lang. Kung magkaroon ka na ng clinic, saka ka na mag-file ng 1701, at sa 1701 pwede i-consolidate ang income mo as EMPLOYEE at income mo as PROFESSIONAL o SELF EMPLOYED, so isang filing pa rin. One more thing, kung napa-file ka ng 1701, dapat nagpa-file ka ring ng 1701Q, dahil kung hindi magke-create ito ng open case. Kasi kung nag-file ka ng 1701 kahit P0.00, pagka-alam ng BIR sa iyo ay SELF EMPLOYED ka so required ka mag-file ng quarterly return (1701Q) which is unneccessary kung employed ka lang naman. Pupunta ka ng BIR sa loob ng isang taon ng apat na beses para lang sa filing, na hindi naman kailangan. Mahirap kung may open case ka dahil subjected ito sa compromise penalty na P200.00 per return (P0.00 kasi income na ni-report mo)

 

Better check with your Hospital Accounting Office kung ano ba talaga status mo sa kanila.

[angel_by_day]

Walang sense yung advise sa iyo ng BIR. Kung totoo EMPLOYEE ang status mo sa hospital nyo, presentation of BIR Form 2316 will be sufficient enough to prove your status. Di na kailangan mag-file ng 1701 with P0.00 sa kanila, doble trabaho lang. Kung magkaroon ka na ng clinic, saka ka na mag-file ng 1701, at sa 1701 pwede i-consolidate ang income mo as EMPLOYEE at income mo as PROFESSIONAL o SELF EMPLOYED, so isang filing pa rin. One more thing, kung napa-file ka ng 1701, dapat nagpa-file ka ring ng 1701Q, dahil kung hindi magke-create ito ng open case. Kasi kung nag-file ka ng 1701 kahit P0.00, pagka-alam ng BIR sa iyo ay SELF EMPLOYED ka so required ka mag-file ng quarterly return (1701Q) which is unneccessary kung employed ka lang naman. Pupunta ka ng BIR sa loob ng isang taon ng apat na beses para lang sa filing, na hindi naman kailangan. Mahirap kung may open case ka dahil subjected ito sa compromise penalty na P200.00 per return (P0.00 kasi income na ni-report mo)

 

Better check with your Hospital Accounting Office kung ano ba talaga status mo sa kanila.

 

thank you, sir, for the extensive explanation. :thumbsupsmiley:

matagal na po ako hindi connected with the hospital (i finished residency 2003 pa), and they did give me copies of the filed forms before....so no problem with that.

What i'm worried about is the yearly filing of 1701 as self-employed, and putting 0.00 in the amount, kase nga, technically wala pa ako private clinic. During the time i was in the hospital, i didnt file this form kase nga they were doing it for me (using the 1700)....after which i got a letter telling me to explain why i failed to file 1701. Pero sabi mo i dont need to file it for now? Pano po kung ma-question ulet ako?

[jackbrng]

distinguished accountants:

 

i have a couple of questions...

 

1. what are the taxes that will be applied to a business that is purely service-based (no products)?

2. do i need to declare books of accounts?

3. how do i go about printing/making thesebooks of accounts? any format or do i buy these?

4. any recommendations on how to minimize these taxes?

5. where can i avail of accountant's services (bir-accredited) to audit financial documents?

 

background info:

*business is a general partnership; 100% filipino-owned

*the income will come from local and overseas sources.

*gross sales may range from 300k to 1.0M

 

thank you.

 

TAXES:

 

1. VAT - 12%. Pero yung income from overseas at dollar denominated zero-rated ito, meaning walang syang output tax. Yung income earn locally lang ang may output tax. VAT Due = Output Tax - Input Tax. Output Tax ay galing sa Sales o Revenue. Yung Input Tax ay galing sa VAT Expense. Mga Expense na walang resibo o nakuha sa NON-VAT entity, walang input tax ang mga ito.

 

2. INCOME TAX - 35%. Kung ang income from overseas ay galing sa bansa na may treaty sa Philippines regarding tax exemption, exempted ito. Kung ang income from overseas ay na-tax na ng bansa na pinanggalingan ng income, wala na itong tax dito sa Philippines. Kung ang income from overseas ay wala sa mga nabanggit, included ito sa taxable income dito sa Philippines.

 

3. WITHHOLDING TAX EXPANDED - Kung umuupa ng opisina - 5% ng rental fee net of VAT. Kung nagpa-pa-subcontract - 2% ng income payment sa subcontractor.

 

4. WITHHOLDING TAX COMPENSATION - Para sa sahod ng mga empleyado. Pakitignan na lang sa www.bir.gov.ph ang tax table.

 

5. WITHHOLDING TAX FINAL - para sa dividend ng mga partners - 10%

 

Yung VAT at Income Tax ay ang Partnership ang may obligasyon. Yung Withholding Taxes ay ang mga Income recipient ang may obligasyon pero ang Partnership ang magre-remit sa BIR bilang Withholding Tax Agent.

 

BOOKS OF ACCOUNTS:

 

Kailangan mong magpa-rehistro ng Books of Accounts. Nabibili ito sa bookstore o office supplies stores. Kung VAT register ka, 6 na libro kailangan mo tulad ng Journal Book, Ledger Book, Cash Receipt Book, Cash Disbursement Book, Subsidiary Sales Book at Subsidiary Purchase Book. Kung NON- VAT ka naman ay 4 na libro lang ang kailangan katulad din ng nabanggit sa itaas, tanggalin mo lang yung Subsidiary Sales at Subsidiary Purchase Book. Maaring isulat kamay o computer printout ang pag-record sa libro. Maaring i-encode muna sa computer, i-print at idikit sa libro ang recording sa libro.

 

Kung ang Sales o Revenue mo ay lalagpas ng P1.5 million, VAT register ka, kung mababa sa P1.5 million NON-VAT ka.

 

TAX MINIMIZATION:

 

1. Dapat lahat ng Income Payment na ni-require ng BIR na mag-withheld, i-withheld ninyo dahil kung hindi kayo nag-withheld hindi ninyo magagamit ang income payment as your expense at lalaki taxable income ninyo. May client ako na hindi nagwi-withheld sa income payments sa directors dahil family corporation at sila-sila ang nagde-desisyon, kaya nang ma-audit sila, nadis-allow yung mga expenses na binayad sa mga directors at lumaki ang taxable income.

 

2. Sa VAT, mayroon kayong advantage dahil sa zero rated sales o revenue nyo na galing sa ibang bansa. Kung mas malaking porsento ng income ninyo ay dollar denominated, maaring maliit na VAT na lang ang bayaran ninyo na manga-galing sa Peso denominated income.

 

ACCOUNTANT SERVICES:

 

Madami namang accountant na nagpa-praktis. Baka sa kapitbahay nyo meron naman. Lalayo ka pa. Mas maganda kasi kung malapit lang para kumbinyente sa inyong dalawa. Kung wala naman, check mo www.picpa.com.ph (di ko lang alam kung tama ito, kung hindi search mo na lang ang keyword "picpa"). Kung hindi naman, kami nagpa-practice din, pm mo na lang contact number at contact person.

[jackbrng]

thank you, sir, for the extensive explanation. :thumbsupsmiley:

matagal na po ako hindi connected with the hospital (i finished residency 2003 pa), and they did give me copies of the filed forms before....so no problem with that.

What i'm worried about is the yearly filing of 1701 as self-employed, and putting 0.00 in the amount, kase nga, technically wala pa ako private clinic. During the time i was in the hospital, i didnt file this form kase nga they were doing it for me (using the 1700)....after which i got a letter telling me to explain why i failed to file 1701. Pero sabi mo i dont need to file it for now? Pano po kung ma-question ulet ako?

 

Kung kumikita ka ngayon as employee pa rin, maari kang humingi ng Employment Certificate sa kumpanyang pinapasukan mo o kung may BIR Form No. 2316 for year 2006 na galing sa kumpanya ninyo, gumawa ka ng letter sa BIR na nagsasabi na empleyado ka lang at hindi Self-Employed at i-attach mo ang mga ito para ma-cancel ang registration mo sa BIR as Self-Employed. Kasi sa nakikita ko, nakarehistro ka sa BIR as Self-Employed dahil sa nag-register ka as Self-Employed o na-i-report ka ng dati mong pinapasukan as Professional o Self-Employed. Kung nakatanggap ka ng BIR Form 2307 sa mga napasukan mo, na-i-report ka na as Professional o Self-Employed. Yung letter na gagawin mo na may attachment ang paraan para ma-correct ang error sa account mo sa BIR.

[weekdaywarrior69]

bale yung partnership ninyo ay magbabayad ng 35% income tax. sa dividendo naman na paghahatian ninyo ay kakaltasan ito ng partnership ng 10% Final Withholding tax bago ibigay sa inyo. Yung nakaltas na 10% ay ire-remit naman sa BIR ng partnership ninyo. Yung income na ito ay ire-report sa income statement mo bilang individual as other income pero hindi na ito taxable dahil nakaltasan na ito ng Final withholding tax.

 

Sa tingin ko, mahirap lumusot sa ganitong sitwasyon dahil kung hindi magkakaltas ang Partnership ng Final Withholding Tax ay hindi pwede i-report na nakapagdistribute ng dividends ang partnership at lalaki ang retained earnings nito. Kapag lumaki at lumagpas ang retained earnings sa ceiling ng BIR, masa-subject ito sa Improperly Accumulated Earnings Tax (IAET), so tax na naman. Kapag dumating na sa ganitong punto, subject ka na sa Withholding tax, madadagdagan pa ng IAET, lalaki lang problema.

 

maraming salamat po sa inyong paliwanag.

 

ang susunod ko pong tanong ay ganito: ang sinasabi po bang retained earnings para sa partnership ay pareho din ng limitsayon ng retained earnings para sa korporasyon? ito po'y naitanong ko sapagkat magkaiba ang porma ng kapitalisasyon ng dalawa. pwede nyo po bang ipaliwanag ng kaunti? wala po bang limitasyon na dapat sundin tungkol sa laki ng dibidendo ng partners?

 

ang huling tanong ko po ay ito: bukod po sa exposure sa risk ng mga partners, ano pa po ang ikinabuti ng korporasyon kung ihahambing sa partnership. gaano kahirap o kadali na mapanatili ng isang kumpanya ang orihinal na pangalan nito kung ito'y magpapalit ng straktura ng kumpanya (partnership to corporation)?

[jackbrng]

sa mga mtc members na may business na nag-e-extend ng seniors citizen discount like drugstore, restaurant, etc , yung discount na binawas sa selling price na binili ng senior citizen ay magagamit as tax credit, meaning, kabawasan sa Income Tax due.

[emaildepot]

Tax credits...

 

pano po mapatunay na nagbigay ka ng donation sa mga institution na walang resibo? or let's say, bumili ka ng mga items po, then gave it to charity? pano po un make-credit?

 

 

thnx. :-)