While 2019 might now be over, tax filings and compliance requirements for 2019 are not yet complete!
Outlined below are some of the key annual mandatory deadlines and filings that businesses in the Philippines must be conscious of during January 2020. Remember, there are various other quarterly and monthly filings in January – outlined below are just the annual requirements!
So avoid financial penalties and make sure your business gets off to the best possible start in 2020 from a compliance perspective! If your business needs support, consider engaging an outsourced accounting and finance service provider here in the Philippines!
KEY DATE: 15 January 2020
Loose-Leaf Books of Accounts
Any business that maintains its accounting books via the loose-leaf books of accounts system is required to submit BIR approved accounting books and records for the year ending 31 December 2019. These books must be submitted by 15 January 2020.
An affidavit must also be submitted confirming the type of books, the number of pages and the volume number of the books submitted. Remember also, that to be entitled to file loose-leaf books of accounts, your company must first have been granted authorization by the BIR to use this system!
DOLE Compliance Report
Employees in the Philippines with more than one month of service are entitled to receive an additional payment at the end of the year – referred to as 13th Month Pay.
Employers can pay the 13th Month Pay to employees anytime as long as its not later than 24 December each year. In connection with this, employers must submit a report to their nearest Department of Labour and Employment (DOLE) Regional Office confirming that they complied with the 13th Month Pay requirement. You can find the list of regional DOLE offices here under the tab entitled “Dole Offices”.
Remember! Your company must submit the Compliance Report for 2019 to DOLE no later than 15 January 2020.
KEY DATE: 20 January 2020
Business Permits and Local Taxes
Unless availing of an exemption, registered businesses in the Philippines must renew their Business Permit every year with their Local Government Units (LGUs). Permit applications are required at both the Barangay and Municipal levels. In addition, companies must also pay the business permit fee, local business taxes and any additional charges imposed by the LGU.
The permit renewal application and payment of taxes and charges must be submitted by 20 January 2020. Remember, a business without an up-to-date permit is not entitled to operate within the LGU area!
So beat the queues – start preparing your applications and submissions now!
KEY DATE: 25 January 2020
Withholding Tax Refund for Employees
Employers in the Philippines are obliged to withhold part of their employees’ salaries during the working year. The withheld payments are then remitted by employers to the BIR as income tax. It is the employer’s job to compute and remit the correct amount of income tax payable each year.
However, deductions made to an employee’s salary can sometimes exceed the amount that should actually have been deducted. This might occur for a number of reasons. If this happens, any excess tax withheld must be refunded to the employees.
For the 2019 year, employers must refund any tax due to affected employees before 25 January 2020.
KEY DATE: 30 January 2020
Computerized Books of Accounts
Companies that use the Computerized Accounting System (CAS) must submit their books (and any other accounting records and relevant media) in soft copy (CD-R, DVD–R) for the year ending 31 December 2019. Computerized books have to be submitted by 30 January 2020! An affidavit must also be submitted which confirms the completeness and accuracy of the computerized books.
Remember also that it is mandatory for larger companies who have been notified by the BIR to use the Computerized Books of Accounts system. So if your company has been notified by the BIR, make sure that CAS is being used!
Submission of Inventory Lists
All businesses that hold or sell inventory are obliged to submit Inventory Lists to the BIR. This relates to the year ending 31 December 2019. Inventory Lists should include schedules (in both hard & soft copy) of finished goods, works in progress, raw materials, supplies and stocks-in trade.
Inventory Lists must be submitted by 30 January 2020.
KEY DATE: 31 January 2020
BIR Annual Registration Fee
All businesses in the Philippines are required to pay an Annual Registration Fee of P500 to the BIR. This fee must be paid by 31 January 2020.
Remember, the Annual Registration Fee is forward looking. So it is for the year 2020 – not 2019!
You can file using the Electronic Filing and Payment System (EFPS) or eBIRForms – whichever system your company has adopted. For information on the differences between these two tax filing systems, check out how technology is changing the accounting industry and taxation for corporations in the Philippines.
Certificate of Final Tax Withheld
BIR Form 2306 is a Certificate to be completed and issued by a withholding agent (i.e,. an employer) to each receiver of income to reflect the income that is subject to final tax.
The Certificate should show the total amount paid, the total taxes that were withheld and the taxes that were remitted during the period. The Certificate should be issued to each receiver of income on or before 31 January 2020 (it relates to 2019 – the year in which the income payment(s) was made).
Certificate of Compensation Payment/Tax Withheld For Compensation Payment With or Without Tax Withheld
BIR Form 2316 is a Certificate that has to be issued by employers each year and to each employee earning a salary. The Certificate outlines the total amount paid to the employee throughout the year and the total amount of taxes withheld from that employee during the same period.
For 2019, employers must issue BIR Form 2316 to each employee by 31 January 2020!
Remember! Where an employee has been terminated, the Certificate should be issued on the same day the last salary payment is made.
Summary List of Tenants
Businesses that rent or lease out properties for commercial activities, must submit the following to the BIR by January 31 each year:
- Layout of each property being leased out
- Lease agreement per tenant per property (Certified True Copy)
- Lessee information sheet for each lessee
CloudCfo – Your outsourced accounting services provider in the Philippines
CloudCfo is an outsourced accounting and bookkeeping firm in the Philippines. We help our clients ensure that their books and accounts are always in order, all tax filings are submitted on time and all compliance requirements are satisfied.
We provide an end-to-end accounting and finance service. This includes key strategic financial advice around business processes, controls and optimization. We also provide executives and owners with regular, detailed and value-added management reports so they can make informed decisions about the future of their business in confidence.
Visit us at www.cloudcfo.ph or contact us directly at firstname.lastname@example.org for more information on how we can support and add value to your business.