TOPIC: BIR Thread

your welcome po sir xicowner!

for those who are asking what are the books, they are the Journal, General Ledger, Sales Book, and if you want others, the Special Journals, like Cash Disbursment Books, Cash Receipts Books...

Nabanggit ko na lang din ang ilang unfairness sa tax policies na ipinatutupad ng BIR, idagdag ko na rin dito yung bagong BIR Revenue Regulation na RR No. 16-2008 tungkol sa bagong Optional Standard Deductions para sa individual at corporate taxpayers.

Basahin ninyo at mainis ^_^ by opening http://www.bir.gov.ph/iss_rul/reg2008.htm and clicking the "Full Text" link at the bottom of the page.

With the correction/additon (Item A3) mentioned by kosang amondz, I am re-posting this schedules of forms that a lanshop owner registered with BIR must file and pay. I hope this will answer/clarify the many questions and concerns posted on this thread.

Here are what an owner should file and pay to BIR in the conduct of his/her lanshop business as a self-employed individual.

I breakdown the information into periods (monthly, quarterly and annual) and deadlines or filing dates together with the description of the forms to be used as follows:

A. Annual:

1) BIR Form 0605 Payment Form - This form is to be filed and paid during registration of the business and the renewal of its registration. The Registration Fee of P500 is paid upon registration of a new business and its renewal every year. Deadline is January 31 for the renewal but the fee is normally paid during stamping of books of accounts in December of each year.

2) BIR Form 1701 Annual Income Tax Return for Self-Employed, Professionals, Estates, and Trusts - This return is filed annually by the following for business income derived during the calendar year regardless of amount of gross income. Deadline is April 15 of each year and amount of income tax to be paid varies from 5 to 32% of net taxable income less quarterly income tax payments.

3) BIR Form 1604E Annual Information Return of Creditable Income Taxes Withheld (Expanded)/ Income Payments Exempt from Withholding Taxes - This return is filed by every lanshop owner required to deduct and withhold taxes on rental payments subject to Expanded Withholding Taxes. Deadline is on March 1 of the year following the calendar year in which the rental payments subject to expanded withholding taxes were paid.

B. Quarterly:

1) BIR Form 1701Q Quarterly Income Tax Return for Self-employed, Professionals, Estates, and Trusts Including Those with both Business and Compensation Income - An income tax return filed quarterly by all Self-employed taxpayers, Professionals, Estates and Trusts engaged in trade/ business including those with both business and compensation income. Filing Dates: Quarter/(Months Covered) Due Date 1st (Jan-March) on or before April 15 2nd (April-June) on or before August 15 3rd (July-Sept) on or before November 15. Amount of income tax to be paid varies from 5 to 32% of net taxable income.

2) BIR Form 2307 Certificate of Creditable Tax Withheld at Source - A Certificate to be accomplished and issued to recipients of rental payments subject to expanded withholding tax paid by a lanshop owner showing therein the monthly breakdown of the total income payments made and the total taxes withheld and remitted during the quarter. Filing Date - to be issued to Lessor on or before the 20th day of the month following the close of the taxable quarter. Upon request of the Lessor, however, the lanshop owner must furnish such statement to the Lessor simultaneously with the income payment.

C. Monthly:

1) BIR Form 1601E Monthly Remittance Return of Creditable Income Taxes Withheld (Expanded) - This return is filed by every lanshop owner who rents his place of business, who is either an individual or non-individual, required to deduct and withhold taxes on rental payments subject to Expanded / Creditable Withholding Taxes. Filing Dates: On or before the tenth (10th) day of the month following the month in which withholding was made except for taxes withheld for the month of December which shall be filed on or before January 15 of the succeeding year. Amount of tax to be withheld and paid to BIR is 5% of the rental payment.

2) BIR Form 2551M Monthly Percentage Tax Return - This return shall be filed in triplicate by the lanshop owner whose gross annual sales and/or receipt do not exceed P1,500,000 and who are not VAT-registered persons. Filing Dates: Not later than the 20th day following the end of each month. Percentage tax to be paid is 3% of gross income.

NOTES:

a) The above-described forms, payments and deadlines are for lanshop owners who do not withhold income taxes from their employees. In legal terms, the above are applicable to self-employed lanshop owners who personally do the tending of their shops. BIR Form 1601C, 2306 and 2316 are used by those who withhold monthly income taxes from their employees.

b) For details and other matters about taxes to be paid to BIR, please go to [url]www.bir.gov.ph [/url]

I have red the following revenue regulations.. i think, the real unfairness here lies upon the differences of application of the 40% OSD to Individuals and corporation.. to Start with, this regulation grants the Corporations OSD, kasi datin wala naman, tpos the rate increased from 10% to 40% for Individuals which is parang maganda... but parang may unfairness na nagaganap.. kasi sa mga individuals, the 40% shall be applied to their "GROSS SALES" na sa umpisa parang maganda.. tpos sa Corporation is 40% of their "GROSS INCOME". Bakit ko nasabing unfair....

Example: Individuals Corporation

SALES : 1,000.00 1,000.00
COS : 500.00 500.00
G.Inc : 500.00 500.00

OSD: (1000 * 40%) (500*40%)

400.00 200.00

TAXABLE INCOME COMPUTATION

1,000.00 1,000.00
less 400.00 500.00
200.00

TAX INCOME 600.00 300.00


******See the difference??? =)

example ko is based na tpos na ung transitory phase.. kasi iba ang computation nun..
Feel free to comment po...! Baka po mali lang ako..

Individuals

Sales : 1,000.00
OSD : 400.00

TAXABLE INCOME = 600.00


Corporations

Sales : 1,000.00
COS : 500.00
OSD : 200.00

TAXABLE INCOME = 300.00

amondz wrote:

Individuals

Sales : 1,000.00
OSD : 400.00

TAXABLE INCOME = 600.00


Corporations

Sales : 1,000.00
COS : 500.00
OSD : 200.00

TAXABLE INCOME = 300.00

Kosang amondz, thanks again for taking time to read the new BIR Revenue Regulation (RR No. 16-2008) issued last December 2008 and already for implementation on 2008 Income Tax Returns of individuals and corporations.

I had a talk with an accountant-cousin regarding the regulation and he said that the leveling (erasing the unfairness) factors are the percentages applied to the taxable incomes in order to arrive at the income taxes of the filers. It is 5 to 32% depending on the level of taxable income for an individual and straight 32% for a corporation. But still . . . at the taxable income level of P500,000 and up, the unfairness as shown in the above examples is becoming more obvious.

Of course, opting for itemized deductions (harder to do) instead of the OSD (Optional Standard Deduction) will make a level playing field for both taxpayers. Saka yung self-employed individual taxpayer, may personal exemptions pa na i-deduct bago yung itemized deductions or OSD whichever he/she chooses to use.

Very well said! Sir Xicowner..! but I Have to correct you for the 32% rate.. its true for past years, but now its 35%.. =)

I have not included Basic Personal and Additional exemptions to arrived at the taxable income to be applied at the graduated tax rates for individuals w/c ranges from 5%-32%,
because it's another one long whole story.. have you red the RR 10-2008?? And the tax rate for corporations is 35%, but beginning January 2009, it will go down to 30%..

I have to Agree with Sir Xicowner because, lets say that an individual reaches the highest rate 32% on 2009 and the Corporate will be taxed only 30% on 2009? Can be that the leveling factor between the two? The Basic Personal Additional Exemption Which is available only to individuals for P50,000 could be that big factor for fairness? I'm speaking with a sole proprietor who is single.. =) There is also a difference when married and having dependents..

Mga ka ulopians..!

Ung example ko po.. i just want to point-out ung part na pag nag opt ka ng OSD.. Direct mo i-less ang OSD sa GROSS sales...So wag ka na mag compute ng COST of SALES, kasi nde mo nman magagamit un.. Unless dun ka sa Itemized Deductions.. SALES less COST of SALE less Itemized Deductions less Basic Personal Additional Exemption = Taxable Income applied to Graduated Tax Table.. your answer Less W/holding Taxes = Tax Due..
At kung married ka na at Pareho kayong kumikita.. Consolidation naman to arrive at the Tax Stil Payable..

mga ka ulop na may accountant/bookekeeper:

1.yung bang accountant niyo eh siya na kumukuha ng pera sa bahay niyo para pambayad sa bir o kayo na mismo pumupunta sa opisina nila para ibigay yung pangbayad sa bir/bangko?

2.after niya ba magbayad sa bangko/bir ng form eh dinadala na niya na yung pinagbayaran niya (mga resibo)?

3.yung mga books na bigay ng bir siya na bahala magtago non at siya na rin bahala magsulat?(journal,ledger,columnar)

ako eh nababadtrip na sa nakuha kong accountant dito sa lugar namin para hinde nag iintindi kung hinde ko pa ittext kung ano mga babayaran perwisyo sa buhay

amondz wrote:

Very well said! Sir Xicowner..! but I Have to correct you for the 32% rate.. its true for past years, but now its 35%.. =)

I have not included Basic Personal and Additional exemptions to arrived at the taxable income to be applied at the graduated tax rates for individuals w/c ranges from 5%-32%, because it's another one long whole story.. have you red the RR 10-2008?? And the tax rate for corporations is 35%, but beginning January 2009, it will go down to 30%..

Yes, I stand corrected on the percentage used in computing the income tax of corporations. It is now 30% only effective January 1, 2009 instead of the 32% as I posted.

Regarding the individual taxpayer, he still pays 32% of his taxable income as income tax. It used to be maximum 35% but the rate was lowered to 33% in January 1999 and then to 32% effective January 2000. I can be corrected if there is a new RR that says it is back to 35%. Please clarify me on this.


The big question is the application of Personal and Additional Exemptions of individual taxpayers. Section 4, Item 9 of RR No.10 -2008 states that

Mixed Income - An individual receiving a combination of compensation and business/profession income shall first deduct the allowable personal and additional exemptions from compensation income, only the excess therefrom can be deducted from business or professional income. In case of husband and wife, the husband shall be the proper claimant of the additional exemptions unless he waives it in favor of his wife.

Ang ibig sabihin kaya nito ay hindi rin magagamit ng individual taxpayer ang Basic Personal & Additional Exemptions pag wala siyang compensation income (not employed)? Again, a very big unfairness sa individual taxpayer kung tama ang interpretation ko.