BIR Concerns

[azayco]

i'm a professional given the nature of my job (insurance, real estate) so i'm filing my VAT monthly and quarterly. even if there are lean months, i have to file. my question is, if i quit this profession, what should i do so that i won't have to file anymore? tnx

 

Hi wizard23

 

It is more prudent if you file an application for cessation of or retirement from business using BIR Form 1905. If you have substantial input tax credits, you can then ask for a refund or tax credit certificate (TCC) from the BIR. Refunds or TCCs though take a long time. Most likely, you will have to go to the Court of Tax Appeals before you can get one.

 

Good luck.

[muffin]

Hello! I need advice po from you BIR experts...

 

I want to start my video arcade business...

I'm an employee of a bank at the same time...

 

What do I need to do to get my Business TIN? I already have my TIN as an employee?

Newbie lang po ako sa business. please help. Basically my income would come from the rental revenue from the machines.

[jackbrng]

Hello! I need advice po from you BIR experts...

 

I want to start my video arcade business...

I'm an employee of a bank at the same time...

 

What do I need to do to get my Business TIN? I already have my TIN as an employee?

Newbie lang po ako sa business. please help. Basically my income would come from the rental revenue from the machines.

 

kailangan mo muna mag-apply ng Business Name sa DTI (kung single proprietorship ang business mo) o sa SEC (kung corporation ang business mo) then, kuha ka ng Barangay Clearance kung saang barangay naka-locate yung business mo, then kuha ka ng Mayors Permit kung saang City o Municipality naka-locate yung business mo. Kapag may Mayor's Permit ka na, pwede mo ng i-parehistro yung business mo sa BIR. Kung nangungupahan ka ng pwesto ng business mo, kailangan ang Contract of Lease. Kung sarili mo yung lugar, kailangan ang huling pinagbayaran ng amilyar. Kung Single Proprietorship ang business mo, yung existing TIN mo na rin ang gagamitin pero magbabayad ka pa rin ng Registration Fee na P500.00. Kung Corporation ang business mo, bibigyan ka ng BIR ng bagong TIN na para sa corporation.

[muffin]

kailangan mo muna mag-apply ng Business Name sa DTI (kung single proprietorship ang business mo) o sa SEC (kung corporation ang business mo) then, kuha ka ng Barangay Clearance kung saang barangay naka-locate yung business mo, then kuha ka ng Mayors Permit kung saang City o Municipality naka-locate yung business mo. Kapag may Mayor's Permit ka na, pwede mo ng i-parehistro yung business mo sa BIR. Kung nangungupahan ka ng pwesto ng business mo, kailangan ang Contract of Lease. Kung sarili mo yung lugar, kailangan ang huling pinagbayaran ng amilyar. Kung Single Proprietorship ang business mo, yung existing TIN mo na rin ang gagamitin pero magbabayad ka pa rin ng Registration Fee na P500.00. Kung Corporation ang business mo, bibigyan ka ng BIR ng bagong TIN na para sa corporation.

 

Wow! thanks! bro, what if my machines are located in various places and the owners of those places are the ones renting machines from me?

Do i need to get permit for each of those places pa? or just a permit para sa pinaka homebase/headquarters ko?

 

Yung lease contract ko kasi is with those who are renting my machines. I'm the lessor and they are the lessee renting the machines.

 

What I'm thinking is that pwede ba na yung Headquarters ko na lang ang ikukuha ko ng barangay clearance at mayor's permit tapos bigyan ko nalang ng xerox copy yung mga tao na nagrerent sa akin ng machines para may ilalagay sila dun sa mga lugar nila even if it's in another city na?

[jackbrng]

Wow! thanks! bro, what if my machines are located in various places and the owners of those places are the ones renting machines from me?

Do i need to get permit for each of those places pa? or just a permit para sa pinaka homebase/headquarters ko?

 

Yung lease contract ko kasi is with those who are renting my machines. I'm the lessor and they are the lessee renting the machines.

 

What I'm thinking is that pwede ba na yung Headquarters ko na lang ang ikukuha ko ng barangay clearance at mayor's permit tapos bigyan ko nalang ng xerox copy yung mga tao na nagrerent sa akin ng machines para may ilalagay sila dun sa mga lugar nila even if it's in another city na?

 

no bro, wala ka ng kinalaman sa mga umuupa ng machine mo, bale yung sa yo lang ang kukuhanan mo ng permit. and one more thing, what i mean sa contract of lease ay yung pwesto ng business mo or what you called your headquarters. Kung inuupahan mo yung place, kailangan ng BIR ng Contract of lease, pero kung sarili mo yung place, yung tax declaration lang ng real property ang ipapakita mo sa BIR. Kung yung place ay pagaari ng parents mo o ng ibang tao pero wala ka namang upa, mag-execute ka na lang ng affidavit of no rent. Lastly, dapat yung umuupa sa iyo ng machine ay kaltasan ka ng withholding tax sa mga ibinabayad sa iyo

[muffin]

no bro, wala ka ng kinalaman sa mga umuupa ng machine mo, bale yung sa yo lang ang kukuhanan mo ng permit. and one more thing, what i mean sa contract of lease ay yung pwesto ng business mo or what you called your headquarters. Kung inuupahan mo yung place, kailangan ng BIR ng Contract of lease, pero kung sarili mo yung place, yung tax declaration lang ng real property ang ipapakita mo sa BIR. Kung yung place ay pagaari ng parents mo o ng ibang tao pero wala ka namang upa, mag-execute ka na lang ng affidavit of no rent. Lastly, dapat yung umuupa sa iyo ng machine ay kaltasan ka ng withholding tax sa mga ibinabayad sa iyo

 

sorry sir sobrang newbie ako sa taxation when it comes to business.

how does witholding tax work?

how much percent ang kaltas sa rent na binabayad nila sa akin? how do i remit the witholding tax?

is that the only tax i have to pay? what about income tax?

so if my headquarters is my home which my mom is renting (she's the one in the leasecontract) then i can execute affidavit of no rent?

 

sorry bro ang daming tanong. I just want to start out my business on the right foot and everything to be legal.

by the way, if i need someone to maintain my books do you offer such services? simple lang naman accounting ng business ko. rent income, transpo expense, salaries ng helper, repairs, acquisition of new machines. interest payments, loan acquisition, depreciation expense. Puro basic bro. I can do it in the long run pero i just need someone to teach me during the first few months or so until i can get the hang of it. Then come january, do you also certify books?

[wizard23]

Hi wizard23

 

It is more prudent if you file an application for cessation of or retirement from business using BIR Form 1905. If you have substantial input tax credits, you can then ask for a refund or tax credit certificate (TCC) from the BIR. Refunds or TCCs though take a long time. Most likely, you will have to go to the Court of Tax Appeals before you can get one.

 

Good luck.

 

 

got it. thanks for the advice azayco!

[in_style]

thanks for all the members who goes of their way to give advises.

bug help to the members!

[azayco]

sorry sir sobrang newbie ako sa taxation when it comes to business.

 

how does witholding tax work?

how much percent ang kaltas sa rent na binabayad nila sa akin? how do i remit the witholding tax?

is that the only tax i have to pay? what about income tax?

so if my headquarters is my home which my mom is renting (she's the one in the leasecontract) then i can execute affidavit of no rent?

 

sorry bro ang daming tanong. I just want to start out my business on the right foot and everything to be legal.

by the way, if i need someone to maintain my books do you offer such services? simple lang naman accounting ng business ko. rent income, transpo expense, salaries ng helper, repairs, acquisition of new machines. interest payments, loan acquisition, depreciation expense. Puro basic bro. I can do it in the long run pero i just need someone to teach me during the first few months or so until i can get the hang of it. Then come january, do you also certify books?

 

Withholding tax - in your case, you earn rental income. The lessee will pay you the rental fee of P1,000, for example. He will not give you the full P1,000. He will give you P1,000 less the withholding tax. For rental of video arcade machines, I think the withholding rate is 5% (if rentals exceed P10K annually) or in the example, P50. Thus, the lessee will pay you P950 and he (not you) will remit the P50 to the BIR. Make sure that you ask for a Certificate of Tax Withheld.

 

Yes, you are subject to income tax. If you will operate as a sole proprietor, you will include your income from this video arcade business in your personal income tax. (This will be a bit tricky administratively because you will have to coordinate with the HRD of your employer.) If you decide to set up a corporation, you will have to file the corporate income tax return (quarterly and one final on April 15 of each year).

 

For accounting services, better if you do it yourself or get a good referral from your friends.

[muffin]

Withholding tax - in your case, you earn rental income. The lessee will pay you the rental fee of P1,000, for example. He will not give you the full P1,000. He will give you P1,000 less the withholding tax. For rental of video arcade machines, I think the withholding rate is 5% (if rentals exceed P10K annually) or in the example, P50. Thus, the lessee will pay you P950 and he (not you) will remit the P50 to the BIR. Make sure that you ask for a Certificate of Tax Withheld.

 

Yes, you are subject to income tax. If you will operate as a sole proprietor, you will include your income from this video arcade business in your personal income tax. (This will be a bit tricky administratively because you will have to coordinate with the HRD of your employer.) If you decide to set up a corporation, you will have to file the corporate income tax return (quarterly and one final on April 15 of each year).

 

For accounting services, better if you do it yourself or get a good referral from your friends.

 

Naku, how do i work around is, now my problem is most of my lessees are just housewifeves trying to earn extra income and they no nothing about remitting WHTax, is there a work around for this? Let's put it this way, it's too much hassle for a housewife to remit WHtax.

[azayco]

Hi muffin

 

Check first if each of your lessee reaches the P10K threshold required for withholding.

 

If they do not reach the 10K threshold, they do not have to withhold.

 

If they do reach the 10K threshold, you can ask them that you can take on the responsibility of withholding the required amount. This will have some cost on your part (time, effort, admin work of your bookkeeper) but it will achieve your objective of making everything aboveboard and in order.

 

[muffin]

Hi muffin

 

Check first if each of your lessee reaches the P10K threshold required for withholding.

 

If they do not reach the 10K threshold, they do not have to withhold.

 

If they do reach the 10K threshold, you can ask them that you can take on the responsibility of withholding the required amount. This will have some cost on your part (time, effort, admin work of your bookkeeper) but it will achieve your objective of making everything aboveboard and in order.

 

 

ok, lets see if i get it right: Example, if one of my arcade machines is being leased for 4k a month by the lessee, then there's no need for witholding tax declaration anymore?

correct me if i'm wrong please. thanks.

what's the right procedure and how much percent is the WHT if only 4k a month is lease amount?

[jackbrng]

ok, lets see if i get it right: Example, if one of my arcade machines is being leased for 4k a month by the lessee, then there's no need for witholding tax declaration anymore?

correct me if i'm wrong please. thanks.

what's the right procedure and how much percent is the WHT if only 4k a month is lease amount?

 

correct ko lang previous post ko......

upon review of BIR Revenue Regulation 2-98, i don't see any provision that subject arcade machine to withholding tax. the rental stated on RR 2-98 was for rental of real property. so in my opinion, your rental income from arcade machine will not be subjected to withholding tax since it was not indicated on the said revenue regulation.

[azayco]

ok, lets see if i get it right: Example, if one of my arcade machines is being leased for 4k a month by the lessee, then there's no need for witholding tax declaration anymore?

correct me if i'm wrong please. thanks.

what's the right procedure and how much percent is the WHT if only 4k a month is lease amount?

 

If the lease is 4000 a month, you need to withhold 5% because the annual rental amounts to 48000, which is greater than the 10000 threshold set by BIR regulations. To facilitate the withholding process, you prepare the proper BIR form, have it signed by your lessee and then file it with the BIR together with the payment.

 

Hope that helps.

 

Sir jackbrng, I found a provision in RR 2-98 on rental of personal properties under an operating lease scheme. It's Section 2.57.2©(2). My opinion is this covers arcade machines. Please let me know if you agree.

[axlerose100]

You could also get the services of an accounting firm to take care of all your BIR requirements. My accountant takes care of filing all my ITRs, VAT reports, registration, etc. It will cost more but in my experience, the convenience is well worth it. This also saves you from seeing all those BIR SOBs taking away your hard earned money personally.