Tax Compliance Assistance in the Philippines

The Bureau of Internal Revenue (BIR) is the government agency that is tasked to enforce tax rules. According to Section 2 of the National Internal Revenue Code of 1997 (NIRC), as amended, the BIR is authorized in the following actions:

• Assessment and collection of all national revenue taxes, fees, and charges; and
• Enforcement of all forfeitures, penalties, and fines.

Types of Taxes and Tax Returns

Individual taxpayers and entities must comply with their tax obligations in the Philippines to continue working and running business operations. It is imperative to submit documents on time to prevent penalties.

Aside from that there are different types of taxes in the Philippines, such as the following:

• Final Tax
• Donor’s Tax
• Documentary Stamp Tax
• Estate Tax
• Percentage Tax
• Withholding Tax on Income Payments
  • Expanded Withholding Tax
  • Withholding Tax on Compensation
  • Final Withholding Tax
  • Withholding Tax on Government Money Payments
• Value-Added Tax (VAT)
• Income Tax
• Others

Taxpayers must ensure that their accounting records are properly kept and recorded. They must also observe the Compliance Requirements listed in “Title IX – Compliance Requirements” of the NIRC as a part of their tax responsibilities.

Non-Compliance Penalties

Under the Philippine Tax Code, if a taxpayer fails to submit their tax returns and pay their tax dues for the following reasons, the BIR will charge them an additional 25% of the payable amount:

1. Failure to file any tax returns or tax dues on the deadline or as required under the provisions of the Tax Code;
2. Unless authorized by the BIR’s Commissioner, filing a tax return to an unauthorized person other than the Internal Revenue Officer;
3. Failure to pay the deficiency tax within the prescribed date and time of payment in the Notice of Assessment; or
4. The taxpayer doesn’t partially or fully pay the tax amount.

According to the NIRC, taxpayers with unpaid taxes are subject to interest charges of 12% per year or higher from the specified date until the company or person has paid the amount owed, including a compromise penalty.

Preparation and Filing of Tax Returns and Attachments

Our team will help you prepare and file the following tax returns and attachments:

• Annual Income Tax Return (BIR Form 1702) together with the Summary Alphalist of Withholding Tax at Source (SAWT)
• Annual Information Return of Income Taxes Withheld on Compensation (BIR 1604-C) with Alphabetical List of Employees
• Certificate of Creditable Tax Withheld at Source (BIR Form 2307)
• Documentary Stamp Tax Return (BIR Form 2000)
• Monthly Remittance Form of Final Income Taxes Withheld (BIR Form 0619-F)
• Monthly Remittance Form of Creditable Income Tax Withheld-Expanded (BIR Form 0619-E)
• Payees and Annual Report on Expanded Withholding Taxes (BIR Form 1604-E) with Alphalist of Payees
• Quarterly Remittance Return of Creditable Income Tax Withheld-Expanded (BIR Form 1601-EQ) including Quarterly Alphalist of Payees (QAP)
• Quarterly Remittance Return of Final Income Taxes Withheld (BIR Form 1601-FQ) with Quarterly Alphalist of Payees (QAP)
• Quarterly Remittance Return of Final Income Taxes Withheld (BIR Form 1603Q)
• Quarterly VAT Return (BIR Form 2550Q) with Quarterly Summary of Sales, Purchases, and Importations
• Quarterly Income Tax Return (BIR Form 1702Q) including Summary Alphalist of Withholding Tax (SAWT)

Secure Full Compliance with Your Tax Responsibilities

Both companies and individual taxpayers must ensure to comply and pay their taxes in order to continue their business legally. Aside from paying your taxes, there are also documentary prerequisites that you need to compile and record.

If you find tax compliance challenging, you may seek help from tax compliance firms to help you with compiling and filing your documentary requirements, as well as paying your taxes on time.