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Year-End Tax Compliance in the Philippines
[Guide] Year-End Tax Compliance in the Philippines

A Step-by-Step Guide for Year-End Tax Compliance in the Philippines for 2024

Corporations must file and submit their tax compliance obligations to the Bureau of Internal Revenue (BIR) at the end of the year to ensure they will be able to function lawfully the following year.

What to Submit During the Year-End Tax Compliance in the Philippines

In preparation for the year-end tax compliance, below is the checklist of documents you need to secure in order to properly file for the required compliance regulations.

#1: Books of Accounts Submission

Depending on the company size and financial capacity of the business, there are three books of account that you may register with the BIR. As determined by your company’s registered books of account, what you need to submit to the BIR for annual compliance are:

  • Manual Books of Accounts. Under Revenue Memorandum Circular (RMC) No. 82-2008, when pages of the previously registered books have already been exhausted, taxpayers keeping manual books of account must register the new books. Although submission of manual books is not required annually, during the audit or tax mapping, the BIR might need you to present them.
  • Loose-Leaf Books of Accounts. For businesses keeping the loose-leaf books, they are required to submit the bounded books of accounts for the taxable year on or before January 15 from the close of the calendar year or 15 days from the close of each fiscal year. An affidavit should also be attached to confirm the type of books, number of pages, and volume of books that are submitted.
  • Computerized Books of Accounts. Taxpayers maintaining computerized books of accounts must submit them in a CD-R, DVD-R, or other optical media or the taxable year on or before January 30 from the close of the calendar year or 30 days from the close of each year.

Early preparation of your books of accounts can increase your chances of avoiding any tax-related problems in the duration of the year-end tax compliance.

#2: Annual Information Returns Submission

As part of your year-end tax compliance, there are forms and certain information that are required to submit. The following prerequisites, including the deadline for submission, are listed in the table below:

Annual Information Returns Submission

#3: BIR Form 2316 Submission

The BIR Form 2316 is a return that contains an employee’s earned income as well as the tax deducted and remitted to BIR. This is needed on or before January 31 for the distribution and filing of the current and existing employees. Employers must also submit a certified list of employees eligible for substitution filing together with soft copies of BIR Form 2316 by February 28.

#4: Annual Income Tax Returns, Audited Financial Statements and Other Reports

For companies and taxpayers engaged in business activities, the following prerequisites must be submitted:

Annual Income Tax Returns, Audited Financial Statements and Other Reports

* For fiscal year companies, the deadline is the 15th day of the fourth (4th) month following the close of the fiscal year.
** For fiscal year companies, the deadline is within 15 days from the statutory due date or date of filing/payment of the ITR, whichever comes later.
*** For fiscal year companies, the deadline is within 30 days from the statutory due date or date of filing/payment of the ITR, whichever comes later.

Companies must have their financial accounts audited by an independent Certified Public Accountant (CPA) if any of the following conditions are met:

  • Under Section 232 of the Tax Code revised RA 10963, corporations, companies, partnerships, or persons whose gross annual sales, earnings, receipts or output exceed P3,000,000; or
  • Under SRC Rule 68, as Amended, the following are required to submit an audited financial statement to the Securities and Exchange Commission (SEC):
    • Stock corporations with total assets or total liabilities of P600,000 or more
    • Non-stock corporations with total assets of P600,000 or more
    • Branch offices/Representative offices (RO) of stock foreign corporations with assigned capital in the equivalent amount of P1,000,000 or more
    • Branch offices/RO of non-stock corporations with assets in the equivalent amount of Create promotion
    • P1,000,000 or more
    • Regional operating headquarters of foreign corporations with total revenues in the equivalent amount of P1,000,000 or more

The deadline for submitting the audited financial statements (AFS) to the SEC is notified every January. Meanwhile, a corporation whose fiscal year ends on a date other than December 31 should file its AFS within 120 calendar days from the end of its fiscal year. Additionally, SEC Memorandum Circular 6-2006 requires all domestic firms with a gross income of ₱5 million or more to submit the General Forms of Financial Statements within 30 days after the SEC deadline for AFS submission.

#5: Inventory Listing and Other Requirements

According to RMC No. 57-2015, taxpayers must present a list of inventory items such as finished goods, work in progress, raw materials, supplies, and stock-in-trade. Other tangible asset-rich balance sheets, such as accounts receivable, must also be included, and they must be submitted on or by January 30 after each calendar year or within 30 days after the end of each fiscal year.

#6: Tenants and Other Requirements Summary List

According to Revenue Regulation (RR) No. 12-2011, taxpayers who lease or rent property for business purposes must report the following:

  • The layout of the leased property
  • A certified true copy of the lease agreement per tenant
  • Latest lessee information sheet (as of December 31)

Due dates may differ depending on the semester the list belongs to. If the list is for the second semester (July-December of the preceding year), it must be submitted by January 31. If the list is for the first semester (January-June of the current year), it must be submitted by July 31.

#7: Sworn Declarations for 2024

Under RR 11-2018, taxpayers are required to submit sworn declarations as follows:

Sworn Declarations for 2024

#8: Other Reportorial Prerequisites

Under RR 34-2020 and RMC 54-2021, taxpayers are obliged to file a summary information of their related party transactions (BIR Form 1709) as attachments to their Annual Income Tax Returns and prepare a Transfer Pricing Documentation. For the taxpayer to submit/prepare these reports, the following conditions must be met:

Other Reportorial Prerequisites

In addition, for taxpayers registered with Philippine Economic Zone Authority (PEZA) and Board of Investments (BOI), the following must be noted:

Other Reportorial Prerequisites Table 2

BIR Electronic Filing and Payment Process

With modern technology present, the Philippine government with the help of BIR made actions such as providing online transactions in order to streamline the tax compliance of companies.

The following are the enhancements in taxation made by BIR:

  • Online payments through several BIR-accredited electronic payment channels
  • Submission of soft copies of BIR form Nos. 2307 and 2316
  • Allowed e-signature usage for some BIR forms
  • Online TIN verification via BIR TIN verifier app
  • Publishing educational videos about tax awareness
  • Chatbot REVIE to assist taxpayers with general questions and inquiries
  • Online booking of schedule for bureau appointments via BIR’s eAppointment System

Electronic Submission of Taxes Guidelines

Income Tax Returns (ITRs) can be filed either manually or electronically, according to RMC 4-2021. When reporting appropriate taxes for their business, taxpayers may use the Electronic Filing and Payment System (eFPS) or the eBIRForms program. However, taxpayers who are indicated in the circulars, such as those filing “No Payment Returns,” must only use eBIRForms.

Taxpayers can also pay through online banking. Below are the banks accredited by BIR:

  • Development Bank of the Philippines (DBP)
  • Land Bank of the Philippines (LBP)
  • Union Bank Online Web and Mobile Payment Facility
  • E-payment (G-Cash or Paymaya)
  • I-Pay MYEG Philippines, Inc. (IPMP)

Taxpayers are reminded by BIR to ensure strict compliance with rules and regulations. Taxpayers who will submit and pay taxes online while being required to pay manually will have penalties for filing in the wrong venue.

Moreover, under RMC 43-2021, the Annual Income Tax Returns and relevant attachments submissions can be filed through BIR Electronic Audited Financial Statements (EAFS) System.

BIR Online Registration and Update System (ORUS)

Taxpayers can use the BIR Online Registration and Update System (ORUS) to register, update, and file their taxes online. For the Year-End Tax Compliance, taxpayers may submit their books of accounts here for easier processing.

According to RMC No. 122-2022, all taxpayers must update their registration records, including their email address and contact information, using the S1905- Registration Update Sheet (RUS) before registering to BIR ORUS.

Efficiently Oblige With the Annual Year-End Tax Compliance

Since the proper documentation of requirements can be a tedious process, having a checklist can guide you to avoid overlooking deadlines and the corresponding documents for submission. This way, it will help your company plan ahead to steer clear of unwanted penalties.

Ensure Proper Compliance to Your Tax Obligations

Our team of experienced tax compliance providers are dedicated to assisting you with your year-end tax obligations to ensure compliance with BIR.

Author

  • InCorp Philippines

    InCorp Philippines (Formerly Kittelson and Carpo Consulting) is a professional services company that offers various corporate services such as incorporation, business registration, corporate compliance, immigration/visas, and other related services to local and foreign companies doing business in the Philippines.

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