TOPIC: BIR Thread

amondz wrote:

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..

I have to quote the above separately to emphasize the seemingly big discrepancy in taxing an individual as against a corporation. My answers to kosang amondz' questions are NO. The new RR Nos. 10 - 2008 and 16 - 2008 make it more difficult and harder to the pocket to comply with the taxes being imposed on single-owned business like lanshop.

Again, consider a P1,000,000 (P3,000/mo average gross revenue) annual income of a man with single status owning a lanshop business. If he will be truly honest and accurately declare such income, he will have to pay (on time, to avoid penalties) the following to BIR:

A. Annual Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . P 500.00

B) Percentage Tax (3% of P1,000,000) . . . . . . . . . . . . . . . . 30,000.00

C) Income Tax (using OSD) = 32% of (P1,000,000 minus
>> 40% of P1,000,000) = .32 x P600,000.00 . . . . . . . . . . . 192,000.00

D) Total Taxes to be paid to BIR = (A + B + C) . . . . . . . . . . P222,500.00

Kawawa naman si kosang amondz. :(

xicowner wrote:

Again, consider a P1,000,000 (P3,000/mo average gross revenue) annual income of a man with single status owning a lanshop business. If he will be truly honest and accurately declare such income, he will have to pay (on time, to avoid penalties) the following to BIR:

A. Annual Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . P 500.00

B) Percentage Tax (3% of P1,000,000) . . . . . . . . . . . . . . . . 30,000.00

C) Income Tax (using OSD) = 32% of (P1,000,000 minus
>> 40% of P1,000,000) = .32 x P600,000.00 . . . . . . . . . . . 192,000.00

D) Total Taxes to be paid to BIR = (A + B + C) . . . . . . . . . . P222,500.00

Kawawa naman si kosang amondz. :(

Sorry, my mistake. The "P3,000/mo." figure in the above-quoted portion of my post should be "P3,000/day" average gross revenue which is a figure quoted by some of us here. I translated that to P1,000,000 annual gross income and showed the honest-to-goodness income tax due for such a daily income. By this example, I hope to send my message that the gross revenue of a lanshop ("kota" in ULOP parlance) is really a serious matter to discuss. It's not just a figure to brag about.

stync wrote:

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

I want to share my opinion and experience regarding the above questions.

I should say YES, all of the above-mentioned work should be part of the job of your accountant/bookkeeper. It should also be your accountant/bookkeeper's responsibility to advise you what are the "safe" figures to declare with BIR. However, if you opt to declare sales figures lower than your actual ones, it should be your responsibility, not his.

Please do not get me wrong regarding my posts on this thread. It is never my intention to sow fear among us, I just want to show the right figures regarding tax obligations of a good businessman. Avoiding to pay the correct taxes is wrong, but there are some ways to postpone them until you are ready to pay them correctly. A good accountant and/or experienced bookkeeper can advise you about this matter.

xicowner wrote:

Again, consider a P1,000,000 (P3,000/mo average gross revenue) annual income of a man with single status owning a lanshop business. If he will be truly honest and accurately declare such income, he will have to pay (on time, to avoid penalties) the following to BIR:

A. Annual Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . P 500.00

B) Percentage Tax (3% of P1,000,000) . . . . . . . . . . . . . . . . 30,000.00

C) Income Tax (using OSD) = 32% of (P1,000,000 minus
>> 40% of P1,000,000) = .32 x P600,000.00 . . . . . . . . . . . 192,000.00

D) Total Taxes to be paid to BIR = (A + B + C) . . . . . . . . . . P222,500.00

Sorry, I have to correct myself again on Item C . . . Income Tax Due (using OSD) should be P125,000 + (32% of P100,000) = P157,000 only (not P192,000 as shown above. As such, Total Taxes to be paid to BIR will be P187,500 only. Roughly, that amount is 18% of the gross sales.

Again, kawawa naman yung mga katulad ni kosang amondz na single ang status pag BIR taxes ang pag-uusapan. By the way, getting married and having maximum dependents of 4 doesn't help much. :(

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.

Sir xicowner, i just want to answer your question on this....

Kaya po ganito ung application nya.. kasi employer ang mag withheld ng tax mo sa compensation, may table ang w/holding tax on compensation kasi...

But this doenst mean to say na kung purely business income ka lang, wala ka na deductions from Basic Personal and Additional Exemption.. Meron pa rin po...

Kawawa tlg ang mga walang anak sa Income Tax ng Individuals though parang ginawan na nila na pantay pantay na P50,000.00 and Single at Married,.

C) Income Tax (using OSD) = 32% of (P1,000,000 minus
>> 40% of P1,000,000) = .32 x P600,000.00 . . . . . . . . . . . 192,000.00

Sir nakalimutan nyo po ung BPE na P50,000.00 hehe.. sayang., tax benefit un, so less 16,000.00 pa dun sa total taxes paid to BIR.. =P

A "GOOD" accountant will declare figures based on PFRS/GAAP.. The "FS" is management/owner's responsibility.. Tax consulting/preparation prepared by accountants is still debatable and subject to corrections by authorities. Though our Profession dictates us to handle jobs with Diligence and Due Care..

A Good accountant will advice you on tax avoidance not tax evasion.

amondz wrote:

C) Income Tax (using OSD) = 32% of (P1,000,000 minus
>> 40% of P1,000,000) = .32 x P600,000.00 . . . . . . . . . . . 192,000.00

Sir nakalimutan nyo po ung BPE na P50,000.00 hehe.. sayang., tax benefit un, so less 16,000.00 pa dun sa total taxes paid to BIR.. =P . . . . . .

Yes, I intentionally did not deduct the BPE (Basic Personal Exemptions) of P50,000 in the example because as you said, I misinterpreted Section 4, Item 9 of RR 10-2008 to mean that it cannot be used by a pure business income earner. If you are saying that BPE can also be applied by an individual deriving income purely from his single-owned business then it is like saying that BPE is the equivalent of Cost of Sales for corporations.

amondz wrote:

A "GOOD" accountant will declare figures based on PFRS/GAAP.. The "FS" is management/owner's responsibility.. Tax consulting/preparation prepared by accountants is still debatable and subject to corrections by authorities. Though our Profession dictates us to handle jobs with Diligence and Due Care..

A Good accountant will advice you on tax avoidance not tax evasion.

I totally agree with you on these things you say about a good accountant (with emphasis on the word GOOD) and would like to call everybody's attention to what you said.

And also, you are right, the "FS" (Financial Statement) is the responsibility of the management/owner of a business establishment. After all, the figures in it will have to be approved by them before it gets submitted to BIR and/or other agencies.

Tax avoidance is what I meant when I say tax payment can be postponed legally until the payor is ready with his money. Tax evasion is only for the daring who do not know the exact consequence of what they are doing.

This is OT (Out of Topic). @ kosang amondz, from what you have posted so far on this thread, I can sense that you are a good accountant. Am I correct?

Up ko lang itong thread by quoting the post that started it and with queries to the TS as follows:

A) Did the succeeding posts answered your questions?

B) Did you get your books re-marked for use in 2009?

C) What do you intend to do or what have you done so far?

Sorry, for being inquisitive about the subject. I just believe that like the technical problems that were posted and got solved here, we are also entitled to know what happened to queries like the subject of this thread.

treborhon wrote:

Kaka register ko lang sa BIR noong December 10 , 2008, magbabayad na ba ako ng monthly percentage tax this end of December.

Tsaka doon sa ITR 1701 form kailangan ko na ba mag file niyan this coming 2009 or 2010 na ng APR 15? .

Ang mga kailangan lang naman na tax ay monthly at quarterly percentage tax.At ung ITR form 1701 which is yearly applicable on the following year tama ba ako?

Tnx sa sasagot.

Sir Xicowner, I'm not sure if The BPE is equivalent to Cost of Services to an Individual Earning purely Compensation income... but i think it seemed to be related., in a way na, the more dependents you have, the more "COSTLY" your living will become.. and come to think of it, For a single like me., I have to spend 50,000.00 to live in a year?? Is that the real cost of my services? La lang.

Oo nga.. I agree na parang off topic na.. but then, hope our off-topic comments would help our co-ulopians in some ways..