BIR Concerns

[Bogs26c4u]

Tinatakot k lang ng BIR examiner. The way the examiner operates is to assess at the maximum amount and let the taxpayer wiggle his way out.

 

I presume the assessment is for income tax and/or either 12% VAT or 3% percentage tax (if you haven't exceeded the P 1.5M threshold for SMEs)? INcome tax is normally income less expenses x tax rate. VAT or percentage tax is based on your gross receipts (but in the case of VAT, the output tax due is reduced by the input taxes paid on your purchases). In either case, to get the gross receipts/gross revenues, it's reasonable to start with No. of rooms x rate, but the 100% occupancy rate is a bit outrageous. So you need to be able to challenge the occupancy rate by showing proof that you weren't fully occupied during the period of review. If you can't prove it using your own data, you can also try to use trending / market analysis. basta you need to prove that the 100% isn't reasonable.

 

WHatever is computed as gross income/gross receipts above, for income tax you can still deduct related business expenses - you need to be able to show documentary evidence that you actually incurred those expenses (for example, salaries of helpers/staff, with vouchers showing they actually received the money; utility bills). For VAT, if you are VAT-registered, you can also reduce the output VAT by deducting input taxes on properly supported purchases.

 

Basta always remember that that's how the examiner really operates - burden of proof is on the taxpayer. And so long as you're prepared, you shouldn't have any problem. Whatever the case, DO NOT try to bribe your way out. If you do, you will forever be part of their "budget" - they'll keep coming back expecting you to pay them at least as much as you did the last time.

 

HOpe this helps.

 

SIR I HAVE AN INQUIRY.

 

I HAVE A SME BUSINESS, I HAVE ROOMS RENTED FOR THE NIGHT. A FEW WEEKS AGO I RECEIVED A NOTICE OF BACK TAXES PAYMENTS WHICH THEY SAY I SHOULD PAY IMMEDIATELY, FAILURE TO PAY THEY WILL SEND A LOA TO CONDUCT FOR US TO BE UNDER SURVILLANCE. NOW, THE COMPUTATION WHICH I WAS IN QUESTION ABOUT WAS THAT THE BACK PAYMENTS WAS BENCHMARKED IN ACCORDANCE WITH THE # OF ROOMS & RATE, & W/ AN OCCUPANCY RATE OF 100%. HOW CAN THIS BE, SOME OF MY ROOMS ARE NOT EARNING DUE TO DAMAGES, STILL UNDER CONSTRUCTION (IF EXTRA MONEY IS AVAIL TO BUY MATERIALS) AND WE ARE NOT EVEN A TOURIST DESTINATION.

 

CAN YOU SHED LIGHT ON THIS. A REPLY IS REALLY APPRECIATED!

[corny20022000]

Does one still need business permit for room for rent in an ordinary house? Sobra na yan.

[guest1979]

Please help me with the computation of my withholding tax.

Last April 16, 2010 I joined this company and I am receiving 12,000.00 only, which is above the minimum pay here in Metro Manila, and Last july the minimum wage is increased to 404.00 per day which makes me belong to the category below minimum wage earner. How ever, my boss said that they will increase my salary to 15,000.00 effective this September 1, 2010.

With the said increase, I would be earning a total of 114,000.00 for the whole year, being connected for 8 1/2 months. I am single with no dependents, and my monthly deductions for the whole year after the increase would be 9,950.00, while the minimum wage earner is earning a total of 147,460.00. how much would be my tax due?

[Kazekage.Gaara]

Is it true na pareho lang ang contributions ng HF sa single?

[guest1979]

Is it true na pareho lang ang contributions ng HF sa single?

 

pareho lang lhat ngayon sir, single, head of the family, married same benefit na 50,000.00 sa mga dependents lang nagkalamangan...

[Kazekage.Gaara]

pareho lang lhat ngayon sir, single, head of the family, married same benefit na 50,000.00 sa mga dependents lang nagkalamangan...

 

 

Thank you bossing. So example, naka 50,000 na ako ng taxes from january to august, babalik ba sa akin yung excess nun?

Edited August 17, 2010 by Kyoji_Kagami

[guest1979]

Thank you bossing. So example, naka 50,000 na ako ng taxes from january to august, babalik ba sa akin yung excess nun?

 

depende yan lung mag kano ang tax due mo, at the end of the year computin ung total income mo for the year less the allowable deductions, makikita mo yan sa form 2316 na ibibigay sayo ng company... if ever subra ang na deduct sayo na withholding tax agains your total tax due, then you are entitled for a tax refund from the company.

[guest1979]

Mga bosing, ask ko lang sana if magiging tax free ba ang tao if nung before mag increase last july, his income is taxable and after the increase basic nya is non tax na?

[johnlove]

Dear BIR experts,

 

Is there an industry standard on how the settlement for the LOA should be divided?

 

Last year, the settlement for a friend's business LOA was divided as follows:

50,000 for deficiency in taxes

140,000 for BIR officials

total settlement: P190,000

 

It was later found out that the money was actually divided as follows:

50,000 for deficiency in taxes

100,000 for BIR officials

40,000 pocketed by the business agency

total settlement: P190,000

 

The business has a reported gross sales of P3.5M

Withholding taxes paid is over 25,000

Income tax paid is over 50,000

The business agency charges a monthly retainers fee of P2,750

The business is actually not doing well, but the figures are sometimes bloated because my friend want to look good in front of his old parents.

 

Question: Is it about time for my friend to look for another business agency?

 

Thanks

[adriane888]

Dear BIR experts,

 

Is there an industry standard on how the settlement for the LOA should be divided?

 

Last year, the settlement for a friend's business LOA was divided as follows:

50,000 for deficiency in taxes

140,000 for BIR officials

total settlement: P190,000

 

It was later found out that the money was actually divided as follows:

50,000 for deficiency in taxes

100,000 for BIR officials

40,000 pocketed by the business agency

total settlement: P190,000

 

The business has a reported gross sales of P3.5M

Withholding taxes paid is over 25,000

Income tax paid is over 50,000

The business agency charges a monthly retainers fee of P2,750

The business is actually not doing well, but the figures are sometimes bloated because my friend want to look good in front of his old parents.

 

Question: Is it about time for my friend to look for another business agency?

 

Thanks

 

Th best thing to do is get someone who will encourage you and provide the correct tax computation...

[Kazekage.Gaara]

depende yan lung mag kano ang tax due mo, at the end of the year computin ung total income mo for the year less the allowable deductions, makikita mo yan sa form 2316 na ibibigay sayo ng company... if ever subra ang na deduct sayo na withholding tax agains your total tax due, then you are entitled for a tax refund from the company.

 

 

Oo nga, so let's say 50,000 yung tax due ko for the year, lahat ba ng excess dun is tax refunds na?

[guest1979]

Oo nga, so let's say 50,000 yung tax due ko for the year, lahat ba ng excess dun is tax refunds na?

 

please refer to the link below,

http://www.bir.gov.ph/iss_rul/reg2008.htm

guidelines po yan...

[guest1979]

hi BIR experts.

 

i applied for a personal TIN years ago, with PHYSICIAN as profession. That time, i didnt know that if you apply for such, you are expected to file the 1701 form indicating what you earn from your clinic.

 

Problem is, up to now, i havent held any clinic of any sort, primarily because i have always been either in training (residency, etc...) or employed as house physician. The BIR people told me na ok lang, and i can put zero in the 1701 form kung wala talaga ako clinic, and i am supposed to do that every year.

 

Just today i went to the BIR office again, and ok naman. I got the CMS which showed that i did not file my 1701 from 2007 to 2009. So I presented them with my certificate of training from PGH (2008 to 2010) and tomorrow i will show them additional certificates of employment.

 

My questions are: what if i decide to be employed by a private clinic forever, instead of opening my own? Does that mean i will be putting zero on the 1701 form every year? And they will be questioning me every year why i have no income as a private physician? Ganun ba yun?

 

 

thanks in advance for answers.

 

If you wish to be employed, your income will be subjected to tax, withheld monthly by your would be employer, at the end of the year they will furnish you a copy of form 2316.

 

BIR form 1701 is for annual income tax returns for individuals etc. please refer to the link below,

http://www.bir.gov.ph/birforms/form_itr.htm

you don't need to file 1701 because your income is already subjected to tax (unless your monthly income is not deducted of withholding tax).

[guest1979]

thanks!!!

 

welcome....

[khantan]

Th best thing to do is get someone who will encourage you and provide the correct tax computation...

Mahirap talaga kapag negosyante ka, buti pa isara mo nalang ang negosyo at mag trabaho ka sa abroad. Sa yo pa lahat na pera na hawak mo.

[guest1979]

sir/mam guest1979 (dont know if you're M or F ),

 

 

I just have a few comments. Just came from the BIR office this month ---

 

1.) the employees are very accomodating. Kahit alam kong pagod na sila, di naman sila masungit.

2.) the NO NOON BREAK thing makes us kahit mahaba pila.

3.) eto napansin ko lang. there's no one employee who would explain to me everything there is to know about taxes. Or maybe i have yet to meet one. To start with, when i applied for a personal TIN as private physician, no one told me to secure the COR or cert of registration for a clinic. That's ok. I never held one from the time i applied (2002) until now - either i was employed or was in training. Second, no one told me that instead of filing the yearly 1701 with zero income in it, i could have cancelled the registration na lang pala. Third, last week the officer asked me to secure a certificate of employment from my previous employer, to prove that i was just an employee that time, and not practising privately on my own. I did get it. Today i showed it to a different officer, who barely looked at it and said it wasnt needed. See?

 

my point is, instead of giving me bits of information, why cant just someone tell me what i had to do from the start, how to remedy the problem, and avoid committing the same mistakes again.

 

The officer kanina finally told me to have the registration (as private physician) cancelled na lang since i told him i have no plans to start my own clinic soon, and that i might be employed by a hospital soon. So i might be paying my taxes as an employee instead.

 

 

Just to give you feedback, also for anyone who works at the BIR.

 

Hello, Good day,

 

Thanks for the feedback.

What you have observed is the most common thing sa BIR... They don't know everything, and every time you inquire for the same matter they will give you an answer na iba. As to my opinion, most BIR personnels (except for a few) are after only thing they know is to collect the money dues to them, they don't know those rules and regulations they are implementing, they even can't explain it right. Even those officer of the day, Hndi alam minsan kung ano ang isasagot, sorry to the BIR personnels but this is true talaga.

 

I have experienced what I am talking.

 

Btw, i'm a guy.

[gabriel64]

sir/mam guest1979 (dont know if you're M or F ),

 

 

I just have a few comments. Just came from the BIR office this month ---

 

1.) the employees are very accomodating. Kahit alam kong pagod na sila, di naman sila masungit.

2.) the NO NOON BREAK thing makes us kahit mahaba pila.

3.) eto napansin ko lang. there's no one employee who would explain to me everything there is to know about taxes. Or maybe i have yet to meet one. To start with, when i applied for a personal TIN as private physician, no one told me to secure the COR or cert of registration for a clinic. That's ok. I never held one from the time i applied (2002) until now - either i was employed or was in training. Second, no one told me that instead of filing the yearly 1701 with zero income in it, i could have cancelled the registration na lang pala. Third, last week the officer asked me to secure a certificate of employment from my previous employer, to prove that i was just an employee that time, and not practising privately on my own. I did get it. Today i showed it to a different officer, who barely looked at it and said it wasnt needed. See?

 

my point is, instead of giving me bits of information, why cant just someone tell me what i had to do from the start, how to remedy the problem, and avoid committing the same mistakes again.

 

The officer kanina finally told me to have the registration (as private physician) cancelled na lang since i told him i have no plans to start my own clinic soon, and that i might be employed by a hospital soon. So i might be paying my taxes as an employee instead.

 

 

Just to give you feedback, also for anyone who works at the BIR.

 

FYI, every year during the week of income tax filing (April 15) there is a help desk at BIR Makati (Near Zuellig Loop) and BIR QC (At Delta, Quezon Avenue). The help desk has people from the Tax Management Association of the Phils. who volunteer to answer questions for the taxpayers. maybe you can ask them during income tax season. At least these people are not BIR officials but private practicioners.

 

Hope that helps.

[bathala]

hello and good day to the experts...

 

i have a problem kc....i worked in pasay city for almost 7 years na, and i now going to work for a company in muntinlupa. One of the requirements needed was for me to go back to RDO 051 which is in pasay and have it stamped the 1905 and 2305 (?) for change of address. When I went to pasay, wala daw doon yung TIN ko eversince...nasa old ysytem pa daw. I never recalled na pinagawa sa askin na update of status noong former employee ko sa pasay. What can i do now? TIA!!!

[jackbrng]

Please help me with the computation of my withholding tax.

Last April 16, 2010 I joined this company and I am receiving 12,000.00 only, which is above the minimum pay here in Metro Manila, and Last july the minimum wage is increased to 404.00 per day which makes me belong to the category below minimum wage earner. How ever, my boss said that they will increase my salary to 15,000.00 effective this September 1, 2010.

With the said increase, I would be earning a total of 114,000.00 for the whole year, being connected for 8 1/2 months. I am single with no dependents, and my monthly deductions for the whole year after the increase would be 9,950.00, while the minimum wage earner is earning a total of 147,460.00. how much would be my tax due?

 

medyo kulang info mo for computation of your tax due, but one thing is for sure, magkaka-tax refund ka

[guest1979]

medyo kulang info mo for computation of your tax due, but one thing is for sure, magkaka-tax refund ka

 

 

sorry po sa kulang na info sir,

 

per Statement ko po, Bwas po ako ng 400 for SSS; 200 sa pag-ibig (pero 100 lng ang er, request ko kz na taasan ko ang contri ko); Philhealth is 150.

 

tinaasan nga nila me this september, SSS ko 500.00: Pag-Ibig 500.00 (100 pa din ang er) and philhealth 187.50.

 

taxable pa rin ba ung time na nag below ako ng minimum? (July - August)

[jackbrng]

sorry po sa kulang na info sir,

 

per Statement ko po, Bwas po ako ng 400 for SSS; 200 sa pag-ibig (pero 100 lng ang er, request ko kz na taasan ko ang contri ko); Philhealth is 150.

 

tinaasan nga nila me this september, SSS ko 500.00: Pag-Ibig 500.00 (100 pa din ang er) and philhealth 187.50.

 

taxable pa rin ba ung time na nag below ako ng minimum? (July - August)

 

hindi ka na taxable simula napatupad ang increase ng minimum wage kaya dapat wala ka ng withholding tax deductions.

[magnus]

I have an informal employment meaning I don't have formal papers, no SSS, Philhealth, etc. My boss just gives me 15K a month while I work for him and I have no problem with that. Just like to ask whether I need to file my income tax this april. And if yes, how much will I declare so tha I don't need to pay any taxes?

 

Thanks

[jhuneus]

Sa mga concerned tax-payers dyan, ano naman ang masasabi nyo sa bagong amendment tungkol sa preferential income tax (PTT).

 

ftp://ftp.bir.gov.ph/webadmin1/pdf/53731RR%2011-2010.pdf

 

SECTION 3. - Eligibility to the 15% Preferential Tax Rate. - Filipinos exercising the option to be taxed at fifteen percent (15%) preferential rate for occupying the same managerial or technical position as that of an alien employed in an ROHQ or RHQ must meet all the following requirements:

 

a. Position and Function Test. - The employee must occupy a managerial position or technical position AND must actually be exercising such managerial or technical functions pertaining to said position;

 

b. Compensation Threshold Test - In order to be considered a managerial or technical employee for income tax purposes, the employee must have received, or is due to receive under a contract of employment, a gross annual taxabale compensation of at least PhP 975,000.00 (whether or not this is actually received); ...

[guest1979]

Hello mga masters,

 

Need your help badly, I have this sideline sa quezon city. 2 separate stores, one store is owned by the mother while the other owned by the daughter. this year, they are planning to 1st store (owned by the mother) to be as a branch to the other store. my question is

a. Will i still need to file sa city hall for closure for the 1st store even though it will still continue to operate?

b. If it would be closed, will i still need to register it to as a branch to the second store?

 

thanks for your help

[doodzz]

Good day.

I'm looking for a freelance acccountant who can help me process my 2010 1701 tax form for my single foodcart business at Muntinlupa area. If anyone interested, kindly PM together with the rate.

Thanks.