Philippines services
2024 is officially over! However, that doesn’t mean that all tax and compliance requirements relating to 2024 have been completed! There are various tax and compliance obligations falling in January every year and all companies in the Philippines must be…
2024 is officially over! However, that doesn’t mean that all tax and compliance requirements relating to 2024 have been completed!
There are various tax and compliance obligations falling in January every year and all companies in the Philippines must be aware of these important requirements and deadlines.
That’s why we have listed down below some of the key tax and compliance activities that fall on an annual basis in January and which businesses must consider!
Start 2025 off with an objective of 100% compliance!
Most businesses in the Philippines will register for Manual Books of Accounts when they first register their business – whether it’s a corporation, OPC, or sole proprietorship. This is generally the default type of registration for the Books of Accounts in the Philippines.
However, by registering for Loose-Leaf Books, companies in the Philippines can avail of a much more efficient method or system for maintaining their accounting books throughout the financial year. In short – no more requirements to enter transactions by hand in the Manual Books!
Businesses must, however, understand that after registering for Loose-Leaf Books with the BIR, there still remains a January compliance requirement each year that must be complied with by the business.
If your PH business is registered for Loose Leaf Books of Accounts, every year in January, you will be required to extract the accounting books and ledgers from your accounting system, format the information into a BIR approved format, print, bind and then file everything with the BIR (under the specific BIR filing format).
The deadline for filing the Loose-Leaf Books with the BIR is 15 days after the end of the company’s financial year or 15 January for those who are following the calendar year.
For more information on Loose-Leaf Books in the Philippines, including registration and annual filings, check out our comprehensive Explainer on Loose Leaf Books of Accounts.
Finally, make sure to speak with your accountant or bookkeeper here in the Philippines to confirm and clarify the specific requirements when submitting your Loose-Leaf Books this January! Also, make sure that this filing is completed by the deadline of 15 January 2025!
Unless exempt, all registered businesses in the Philippines are required to renew their Business Permit each year with their local Municipality or City Hall.
In order to secure the Business Permit Renewal, there are a lot of documents and information that must first be collected, reviewed and submitted!
In 2025, the Business Permit Renewal application must be submitted on or before 20 January 2025!
For all you need to know about the Business Permit Renewal process, or even just the Business Permit in general, feel free to visit Business Permit in the Philippines – All You Need to Know in 2025!
The Business Permit Renewal process can be quite lengthy and challenging for some businesses – so start preparations early!
Remember, a business without an up-to-date permit is technically not entitled to operate the business within its own Municipality!
Effective January 22, 2024, the Bureau of Internal Revenue (BIR) will no longer collect the Annual Registration Fee from business taxpayers. This change is part of the implementation of Republic Act No. 11976, also known as the “Ease of Paying Taxes Act”.
Businesses in the Philippines that hold inventories are required to submit an updated Inventory List to the BIR within 30 days after the end of the company’s financial year or by 30 January for those who are following the calendar year.
For more information on the Inventory List, check out our comprehensive Explainer on Inventory List.
The Certificate of Compensation Payment/Tax Withheld, commonly known as BIR Form 2316, is a BIR compliance requirement that must be prepared by any PH companies that engaged employees during the prior calendar year.
There are actually two stages to the preparation and successful completion of the BIR Form 2316 submission process.
First, a separate BIR Form 2316 needs to be generated and sent to each covered employee of the company. The employee must then review, sign and return the form to the employer (assuming all of the details are accurate). The form should be prepared for any employee that received a salary, wage or any other form of remuneration from the employer over the prior calendar year.
The Form 2316 that has been delivered to the employee should identify the total amount of compensation paid to each individual employee and the total value of the compensation tax withheld from each employee during the previous calendar year.
In 2025, BIR Form 2316 should be sent to each individual employee before 31 January 2025.
Secondly, the employer is required to submit a BIR Form 2316 to the BIR in respect of each individual employee. Prior to submission, each Form must be signed by both the employer and the employee. In 2025, the completed and signed BIR Form 2316 for each employee must be submitted to the BIR on or before 28 February 2025.
For more detailed information on the above process, feel free to review 2316 and Payroll Annualization in the Philippines.
The Annual Information Return of Income Taxes Withheld on Compensation, commonly known as BIR Form No. 1604-C, is an employee/payroll-related BIR tax return that must be filed every year in January.
For 2025, BIR Form 1604-C must be filed with the BIR on or before 31 January 2025!
When it comes to payroll taxes, employers in the Philippines must compute, deduct and withhold a certain value of an employee’s compensation before it is actually paid out to each employee. Employers must submit to the BIR monthly tax returns reflecting the compensation withheld for each prior month. This is completed through the preparation and submission of BIR Form 1601-C.
BIR 1604-C, however, is an annual filing! In January each year, employers must prepare and submit a Report to the BIR which outlines the total amount of income tax withheld on compensation from all employees during the previous calendar year.
Here’s some further information on the Annual Information Return of Income Taxes Withheld on Compensation in the Philippines!
Now we are talking about payroll-related compliance and DOLE!
Employers in the Philippines are mandated to pay all covered employees an additional one month salary payment before the end of each calendar year.
This is the 13th Month Pay Benefit in the Philippines and it is famously known by employers and even moreso, by employees!
P.D. No. 851 was the original legislation that initiated the coming into law of the requirement for PH employers to pay the 13th Month Pay Benefit.
As a mechanism to ensure that employers satisfy this requirement, in January each year, employers make a report of their compliance through the DOLE Establishment Report System at https://reports.dole.gov.ph/
So, in 2025, employers must submit the DOLE Compliance Report on or before 15 January 2025.
Finally, it’s important to remember that the DOLE Compliance Report relates to the 13th Month Pay Benefit compliance requirement for the previous calendar year!
CloudCfo offers tax consultancy services specifically for startups, small businesses and SMEs in the Philippines!
Contact the CloudCfo Team Today!
Make sure that you kick off 2025 with the right tax management and reporting services in place and ensure that your PH business can achieve 100% compliance from the start of the year and all year round!
DISCLAIMER: This article is strictly for general information purposes only. Nothing in this article constitutes or intends to constitute financial, accounting, regulatory or legal advice and must not be used as a substitute for professional advice. It is still necessary to consult your relevant professional adviser regarding any specific matter referenced above.
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