Your SlideShare is downloading. ×
UPDATES ON
REAL ESTATE
TAXATION
A presentation by:
FERNANDO M. MATIAS
Chief Revenue Officer III
Real Estate Broker
Know Your Shape

Insightful.
Analytical.
Balanced
person.

Focused.
Determined.
Stable person.

Risk taker.
No non-sense
p...
REP GUIDE
OOKS OF ACCOUNT

NVOICING
EGISTRATION
WHO ARE ENGAGED IN REAL ESTATE BUSINESS

Taxpayers who are considered engaged in the
real estate business refer collective...
WHO ARE ENGAGED IN REAL ESTATE BUSINESS

REAL ESTATE DEALER : refers to any person
engaged in the business of buying and s...
WHO ARE ENGAGED IN REAL ESTATE BUSINESS

REAL ESTATE DEVELOPER : refers to any person
engaged in the business of developin...
WHO ARE ENGAGED IN REAL ESTATE BUSINESS

REAL ESTATE LESSOR : refers to any person
engaged in the business of leasing or r...
WHO ARE ENGAGED IN REAL ESTATE BUSINESS

REAL ESTATE SALESPERSON : refers to any
person, who is accredited by the Professi...
PROCEDURES in REGISTERING
with BIR

“The Mother of all business commandment”
(Sec.236,NIRC)
Before commencement of any
bus...
REGISTRATION REQUIREMENTS
for INDIVIDUALS

1. Birth Certificate, or any ID card
showing the applicant’s complete
name, add...
REGISTRATION REQUIREMENTS
for INDIVIDUALS

2. Professional Tax Receipt (PTR) from the
local government for the current yea...
REGISTRATION REQUIREMENTS
for GENERAL PROF PARTNERSHIPS

1. Articles of Partnership, or Partnership
Agreement;
2. Mayor’s ...
PROCEDURES in REGISTERING
with BIR

1. Accomplish Application for Registration –
– BIR Form 1901 (for Individuals)
– BIR F...
PROCEDURES in REGISTERING
with BIR
• Notes in Registration:
The REP may electronically secure TIN
through e-REG system wh...
PROCEDURES in REGISTERING
with BIR

• Notes in Registration:
Value Added Tax (VAT): 12% if gross annual
professional fees...
PROCEDURES in REGISTERING
with BIR

• Notes in Registration:
Withholding Tax on Compensation (WC): if
with employees
Exp...
PROCEDURES in REGISTERING
with BIR

2. Pay the Registration Fee (RF) of P500.00 upon
registration and every year thereafte...
PROCEDURES in REGISTERING
with BIR
4. Apply for Authority to Print
Invoices/Receipts using BIR Form No. 1906;
5. Apply for...
PROCEDURES in REGISTERING
with BIR
6. Update registration information (e.g.
Change of registered address, personal
exempti...
PROCEDURES in REGISTERING
with BIR

OFFENSES & PENALTIES
• (Sec.248/249) Failure to pay annual
registration fee is subject...
PROCEDURES in REGISTERING
with BIR
TAX MAPPING VIOLATIONS & PENALTIES
DESCRIPTION
FAILURE TO REGISTER
FAILURE TO PAY ANNUA...
ISSUANCE OF RECEIPTS,SALES
OR COMMERCIAL INVOICES

• (Sec. 232) All persons subject to an
internal revenue tax, shall for ...
WHAT ARE THE INVOICING
REQUIREMENTS

 Official Receipt (OR) – for professional fees
received; sale of services
 Sales In...
ABC CORPORATION

In settlement of the following:
Invoice No.
Amount

76 Dilman, Quezon City
VAT Reg. TIN: 144-424-024-000
...
MA. LAURA PEDRAZA., M.D.
Rm. 205 St. Luke’s Hospital, E. Rodriguez Sr.,Q.C.
NON-VAT Reg. TIN: 144-424-024-000

OFFICIAL RE...
JUAN DELA CRUZ
Proprietor
426 Dilman, Quezon City
Reg. TIN: 305-410-465-000

COLLECTION RECEIPT

DATE ____________

Receiv...
INVOICING
REQUIREMENTS

• (Sec. 264) Failure or refusal to issue
receipts, or sales or commercial invoices
upon conviction...
INVOICING
REQUIREMENTS
TAX MAPPING VIOLATIONS & PENALTIES
DESCRIPTION
FAILURE TO ISSUE RECEIPT/INV
REFUSAL TO ISSUE RECEIP...
•
•
•
•

BOOKKEEPING REQUIREMENTS
for PROFESSIONALS
Register and Maintain Books of Accounts
Preserve Books within the pres...
BOOKKEEPING REQUIREMENTS
for PROFESSIONALS
NOTE:
• The registration of a new set of manual books of
accounts shall only be...
BOOKKEEPING REQUIREMENTS
Tax Mapping Violation & Penalties
VIOLATION
FAILURE to register BOOKS OF
ACCOUNTS/CASH REGISTER
M...
DEADLINE OF FILING
and PAYMENT OF TAXES
BIR FORM

0605

DESCRIPTION

Payment Form for Registration Fee

DEADLINE
January 3...
DEADLINE OF FILING
and PAYMENT OF TAXES
BIR FORM

1601-E

DESCRIPTION

Monthly Remittance Return of
Creditable Income Taxe...
DEADLINE OF FILING
and PAYMENT OF TAXES
BIR FORM
2000-0T

DESCRIPTION
DST ON SALE

RATE OF TAX

DEADLINE

1.5% ON TAX BASE...
DEADLINE OF FILING
and PAYMENT OF TAXES
BIR FORM

DESCRIPTION

RATE OF TAX

DEADLINE

Donor’s Tax

2% to 15% (4th degree)
...
DEADLINE OF FILING
and PAYMENT OF TAXES
BIR FORM

DESCRIPTION

RATE OF TAX

DEADLINE

Donor’s Tax

2% to 15% (4th degree)
...
SAMPLE
COMPUTATION
HOW TO COMPUTE THE VALUE-ADDED TAX
OUTPUT TAX – INPUT TAX= VAT PAYABLE
HOW TO COMPUTE THE PERCENTAGE TAX
Creditable Withholding Tax on Professionals
(Sec. 2.57.2. (A)(1) and (I) of RR 2-98, as amended)

There shall be withheld ...
Creditable Withholding Tax
• Applicable to Ordinary Asset (for sale in the ordinary course
of business; not for sale but u...
How to determine whether a particular real
property is a capital or ordinary asset
• All real properties acquired by the r...
How to determine whether a particular real
property is a capital or ordinary asset
• All real properties acquired by the r...
How to determine whether a particular real
property is a capital or ordinary asset
• Registration with the HLURB or HUDCC ...
How to determine whether a particular real
property is a capital or ordinary asset
• If TP not engaged in the real estate ...
How to determine whether a particular real
property is a capital or ordinary asset
• If TP who changed its real estate bus...
How to determine whether a particular real
property is a capital or ordinary asset

• Real properties formerly forming par...
How to determine whether a particular real
property is a capital or ordinary asset
• Real properties classified as capital...
How to determine whether a particular real
property is a capital or ordinary asset
- real property received as dividend by...
How to determine whether a particular real
property is a capital or ordinary asset
- real property received in an exchange...
SAMPLE COMPUTATION

• COMMISSION COMPUTATION (Percentage
Listing without CWT)
Selling Price
P1,000,000.00
Less: Discount (...
SAMPLE COMPUTATION

• COMMISSION COMPUTATION (Percentage
Listing with CWT)
Selling Price
P1,000,000.00
Less: Discount (10%...
SAMPLE COMPUTATION

• COMMISSION COMPUTATION (Percentage Listing
with CWT/Selling Price with VAT)
Selling Price with VAT
P...
SAMPLE COMPUTATION

• COMMISSION COMPUTATION (Percentage Listing with
CWT/Broker is VAT registered)
Selling Price with VAT...
SAMPLE COMPUTATION
NOTES: When to apply VAT or PT –
Pay PT of 3% if the transaction is exempt
from VAT, i.e.:
Sale of ca...
HOW TO COMPUTE THE WITHHOLDING TAX ON COMPENSATION
 Withholding Tax on Compensation –Use the WT Table provided
under RR N...
Creditable Withholding Tax on Professionals
(Sec. 2.57.2. (A)(1) and (I) of RR 2-98, as amended)

 In order to determine ...
WHERE to FILE and PAY TAXES
• Any Authorized Agent Bank (AAB) within the
Revenue District Office where the REP is
register...
REMINDERS
• The REP needs to FILE a return EVEN when
there is NO TAX PAYMENT to be made
• THIRD PARTY INFORMATION helps th...
REMINDERS
• The BIR and DOF, under the RUN AFTER
TAX EVADERS (RATE) Program investigate
and prosecute individuals and enti...
Compliance List of Info & Documents
REPORT

MANNER

DEADLINE

REFERENCE

EFPS users
-eSubmission
- eAttachment

-25th day ...
Compliance List of Info & Documents
REPORT

MANNER

DEADLINE

Alphalist of Employees

Hard copy – If less than
10 payees; ...
HOW TO PASS THE
BIR COMPLIANCE TEST
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
• REVENUE REGULATIONS 15-2012 :
- Accreditation of...
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
• REVENUE MEMORANDUM CIRCULAR No. 442013
:
Extende...
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
REVENUE MEMORANDUM ORDER NO. 12-2013
Prescribing
W...
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
• RR 3-2012 – Effectivity of threshold amounts
for...
Reason for the adjustment: (RR No. 16-2011, as
amended by RR No. 3-2012)
• Adjusted to the present values using the
Consum...
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
• RR No. V-1 : Bookkeeping Regulations
• RR 2-90
:...
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
• RR 10-99 : Rules on the use of CRM & POS
• RMO 5...
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
• Sec. 15 - Authority of internal revenue officers...
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
• Sec.232 – Keeping of Books of Accounts
• Sec.236...
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
• Sec.241 – Exhibition of Certificate of
Registrat...
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
• RMO 33-2002: Policies, guidelines &
procedures o...
A Tax Compliant Checklist of Applicable Laws,
Regulations & Memo Orders
RR 4-2008 : Amending the venue for the payment
of ...
Decoupling of degree of tax compliance from
visible sign of where tax money are going to.

We pay our taxes because we lov...
SUMMARY
AYANI at
LAW ng
EPUBLIKA
End of Presentation
Tax Forum with Real Estate Practitioners
Upcoming SlideShare
Loading in...5
×

Tax Forum with Real Estate Practitioners

944

Published on

Tax Forum with Real Estate Practitioners

FOR INQUIRIES PLS. CONTACT:
CONTACT: 0919 692 3588
EMAIL: mbrmls@gmail.com

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
944
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide
  • OR for VAT Registered – Logo of Printer
  • OR for VAT Registered – Logo of Printer at the bottom of the ATP details, embedded with an overlay large format at the back of the ATP details.
  • Transcript of "Tax Forum with Real Estate Practitioners "

    1. 1. UPDATES ON REAL ESTATE TAXATION A presentation by: FERNANDO M. MATIAS Chief Revenue Officer III Real Estate Broker
    2. 2. Know Your Shape Insightful. Analytical. Balanced person. Focused. Determined. Stable person. Risk taker. No non-sense person. Good leader Pre-occupied with text, FB & other SEX fantasies !!!
    3. 3. REP GUIDE OOKS OF ACCOUNT NVOICING EGISTRATION
    4. 4. WHO ARE ENGAGED IN REAL ESTATE BUSINESS Taxpayers who are considered engaged in the real estate business refer collectively to:  REAL ESTATE DEALERS  REAL ESTATE DEVELOPERS  REAL ESTATE LESSORS  REAL ESTATE SALESPERSONS  Primary purpose of business  Articles of Incorporation
    5. 5. WHO ARE ENGAGED IN REAL ESTATE BUSINESS REAL ESTATE DEALER : refers to any person engaged in the business of buying and selling or exchanging real properties on his own account as a principal and holding himself out as a full or part-time dealer in real estate
    6. 6. WHO ARE ENGAGED IN REAL ESTATE BUSINESS REAL ESTATE DEVELOPER : refers to any person engaged in the business of developing real properties into subdivisions, or building houses on subdivided lots, or constructing residential or commercial units, townhouses and other similar units for his own account and offering the for sale or lease.
    7. 7. WHO ARE ENGAGED IN REAL ESTATE BUSINESS REAL ESTATE LESSOR : refers to any person engaged in the business of leasing or renting real properties on his own account as a principal and holding himself out as a lessor of real properties being rented out or offered for rent.
    8. 8. WHO ARE ENGAGED IN REAL ESTATE BUSINESS REAL ESTATE SALESPERSON : refers to any person, who is accredited by the Professional Regulatory Board of Real Estate Service (PRBRES), and under the supervision and accountability of a licensed broker to engage in the real estate business.
    9. 9. PROCEDURES in REGISTERING with BIR “The Mother of all business commandment” (Sec.236,NIRC) Before commencement of any business and payment of any tax due: REGISTER FIRST at the BIR Office where your BUSINESS is LOCATED
    10. 10. REGISTRATION REQUIREMENTS for INDIVIDUALS 1. Birth Certificate, or any ID card showing the applicant’s complete name, address, date of birth & signature, such as, but not limited to driver’s license, PRC* ID card and/or passport. If applicant is a married woman, marriage contract shall be required. *(PRC: Professional Regulation Commission)
    11. 11. REGISTRATION REQUIREMENTS for INDIVIDUALS 2. Professional Tax Receipt (PTR) from the local government for the current year, if applicable; and 3. Lease contract, if applicable
    12. 12. REGISTRATION REQUIREMENTS for GENERAL PROF PARTNERSHIPS 1. Articles of Partnership, or Partnership Agreement; 2. Mayor’s permit or application for mayor’s permit duly received by the concerned LGU; 3. Lease contract, if applicable
    13. 13. PROCEDURES in REGISTERING with BIR 1. Accomplish Application for Registration – – BIR Form 1901 (for Individuals) – BIR Form 1903 (for General Prof Partnership) and submit it with the applicable attachments to the RDO having jurisdiction over the principal place of business
    14. 14. PROCEDURES in REGISTERING with BIR • Notes in Registration: The REP may electronically secure TIN through e-REG system which can be accessed at the BIR Website at www.bir.gov.ph or the BIR Portal at www.my.bir.gov.ph Register Tax Types: Registration Fee (RF); Income Tax (IT); Business Tax (VAT or PT) The REP should also register and pay the corresponding Registration Fee for each separate or distinct establishment and/or branch located in other district office.
    15. 15. PROCEDURES in REGISTERING with BIR • Notes in Registration: Value Added Tax (VAT): 12% if gross annual professional fees/sale of goods is P1,919,500.00 and above; or if professional opted to become a VATregistered taxpayer. Percentage Tax (PT) or NON-VAT: 3% if gross annual professional fees/sale of goods is below P1,919,500.00
    16. 16. PROCEDURES in REGISTERING with BIR • Notes in Registration: Withholding Tax on Compensation (WC): if with employees Expanded Withholding Tax (EWT): if with income payment subject to EWT (ex. Rental) Other applicable taxes as may be determined by BIR.
    17. 17. PROCEDURES in REGISTERING with BIR 2. Pay the Registration Fee (RF) of P500.00 upon registration and every year thereafter on or before January 31, using BIR Form No. 0605 (Payment Form) to any Authorized Agent bank (AAB) or the Revenue Collection Officer (RCO) located within the RDO; 3. Attend the taxpayers’ briefing or secure tax guides at the RDO before the release of the Certificate of Registration (COR) and “Ask for Receipt” Notice (ARN)(For display at business premises)
    18. 18. PROCEDURES in REGISTERING with BIR 4. Apply for Authority to Print Invoices/Receipts using BIR Form No. 1906; 5. Apply for Registration of Books of Accounts: Journals. Ledgers and applicable subsidiary books
    19. 19. PROCEDURES in REGISTERING with BIR 6. Update registration information (e.g. Change of registered address, personal exemptions, additional tax types, etc.), using BIR Form 1905 and submit to the RDO having jurisdiction over the place of business.
    20. 20. PROCEDURES in REGISTERING with BIR OFFENSES & PENALTIES • (Sec.248/249) Failure to pay annual registration fee is subject to penalties of 25% surcharge, interest and compromise • (Sec.258) Unlawful pursuit of business. For each act or omission, be punished by a fine of not less than P5,000 but not more than P20,000 and imprisonment of not less than six (6) months but not more than 2 years.
    21. 21. PROCEDURES in REGISTERING with BIR TAX MAPPING VIOLATIONS & PENALTIES DESCRIPTION FAILURE TO REGISTER FAILURE TO PAY ANNUAL REGISTRATION FEE NO CERTIFICATE OF REGISTRATION DISPLAYED FAILURE TO DISPLAY THE POSTER “ASK FOR RECEIPT” COMPROMISE (RMO 1-90;56-2000) P 20,000 1,000 1,000 1,000
    22. 22. ISSUANCE OF RECEIPTS,SALES OR COMMERCIAL INVOICES • (Sec. 232) All persons subject to an internal revenue tax, shall for each sale or transfer of merchandise or for services rendered, issue duly registered receipts or sales or commercial invoices.
    23. 23. WHAT ARE THE INVOICING REQUIREMENTS  Official Receipt (OR) – for professional fees received; sale of services  Sales Invoices (SI) – for sale of goods, e.g. Medicines, creams, ointments, etc)which indicate the name of the professional, TIN, and registered address;  Each OR/SI shall indicate the name and address of client/customer, date of transaction,amount, other pertinent info. and issued sequentially in duplicate
    24. 24. ABC CORPORATION In settlement of the following: Invoice No. Amount 76 Dilman, Quezon City VAT Reg. TIN: 144-424-024-000 Total Sales (VAT Inclusive) OFFICIAL RECEIPT Less: VAT Total DATE ____________ Less: SC/PWD Discount Received from ____________________with TIN_______ with address at ___________________________________ the sum of pesos __________________________________ ________________________________________________ In partial/full payment of ____________________________ ________________________________________________ . Citizen TIN Sr. Total Due Total Payment Change VA T able VAT-Exempt VAT Zero Rated Sale VAT - 12% By:__________________ Amount Due OSCA/PWD ID No. Form of Payment: Cash Check 10 Bklts (3x) 1001-1500 BIR Authority to Print No. 3AU000805222 Date Issued 07-30-13 : Valid until 07-30-2018 BERTHA PRINTING SERVICES, INC. TIN: 123-456-789-000 VAT Signature Cashier/ Authorized Representative No. 1001 Printer’s Accreditation No. P08051200 Date Issued 08-01-12 “THIS OFFICIAL RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF ATP”
    25. 25. MA. LAURA PEDRAZA., M.D. Rm. 205 St. Luke’s Hospital, E. Rodriguez Sr.,Q.C. NON-VAT Reg. TIN: 144-424-024-000 OFFICIAL RECEIPT In settlement of the following: Invoice No. Amount DATE _____________ Received from ___________________with TIN_______ with address at ___________________________________ the sum of pesos __________________________________ ________________________________________________ In partial/full payment of ____________________________ ________________________________________________ _. Total Sales Less: SC/PWD Discount Total Due Total Payment Change Sr. Citizen TIN By:__________________ Form of Payment: Cash Check OSCA/PWD ID No. 10 Bklts (3x) 1001-1500 BIR Authority to Print No. 3AU000805222 Date Issued 07-30-13: Valid until 07-30-2018 BERTHA PRINTING SERVICES, INC. TIN: 123-456-789-000 VAT Signature Authorized Representative No. 1001 Printer’s Accreditation No. P08051200 Date Issued 08-01-12 “THIS DOCUMENT IS NOT VALID FOR CLAIMING INPUT TAXES” THIS OFFICIAL RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF ATP
    26. 26. JUAN DELA CRUZ Proprietor 426 Dilman, Quezon City Reg. TIN: 305-410-465-000 COLLECTION RECEIPT DATE ____________ Received from ___________________________with TIN______________________ with address at __________________________________________________________ the sum of pesos ________________________________________________________ ______________________________________________________(PhP____________) In partial/full payment of ___________________________________________________ ______________________________________________________________________. By:______________________________ Authorized Representative Aut 10 Bklts (3x) 1001-1500 BIR Authority to Print No. 3AU000805222 Date Issued : 07-30-13: Valid until 07-30-2018 JDC PRINTING SERVICES, INC. TIN: 123-456-789-000 VAT Printer’s Accreditation No. P08051200 Date Issued: 08-01-12 No. 1001 “THIS DOCUMENT IS NOT VALID FOR CLAIMING INPUT TAXES” THIS COLLECTION RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF ATP
    27. 27. INVOICING REQUIREMENTS • (Sec. 264) Failure or refusal to issue receipts, or sales or commercial invoices upon conviction for each act or omission, be punished by a fine of not less than P1,000 but not more than P50,000
    28. 28. INVOICING REQUIREMENTS TAX MAPPING VIOLATIONS & PENALTIES DESCRIPTION FAILURE TO ISSUE RECEIPT/INV REFUSAL TO ISSUE RECEIPT/INV DUPLICATE COPY IS BLANK USE OF UNREGISTERED RECEIPTS/INVOICES COMPROMISE 1st Offense 2nd Offense P 10,000 P 20,000 25,000 50,000 20,000 50,000 5,000 10,000
    29. 29. • • • • BOOKKEEPING REQUIREMENTS for PROFESSIONALS Register and Maintain Books of Accounts Preserve Books within the prescriptive period of 3 years from close of taxable year for post audit examination If gross receipt in any given quarter exceed P150,000, shall have their Books audited and examined by an independent CPA Transactions for the day shall be recorded in the Books on or before 12noon of following day
    30. 30. BOOKKEEPING REQUIREMENTS for PROFESSIONALS NOTE: • The registration of a new set of manual books of accounts shall only be done at the time when the pages of the previously registered books have almost filled-up. Thus, it is not necessary for the REP to register a new set of manual books of accounts every year. However, the taxpayer may opt to use a new set of books for every taxable year which should be registered prior to their use.
    31. 31. BOOKKEEPING REQUIREMENTS Tax Mapping Violation & Penalties VIOLATION FAILURE to register BOOKS OF ACCOUNTS/CASH REGISTER MACHINE´S SALES BOOKS AMOUNT Subject to graduated rates (P200-P50,000) based on gross sales FAILURE TO KEEP BOOKS OF ACCOUNTS AT THE PLACE OF BUSINESS FAILURE TO MAKE ENTRIES IN THE REGISTERED BOOKS OF ACCOUNTS OTHERS (refer to Section 275 of P 1,000.00 for each NIRC) act or ommission
    32. 32. DEADLINE OF FILING and PAYMENT OF TAXES BIR FORM 0605 DESCRIPTION Payment Form for Registration Fee DEADLINE January 31 1st Qtr: April 15 2nd Qtr: Aug. 15 3rd Qtr: Nov. 15 1701Q Quarterly Income Tax Return 1701 2550M 2550Q Annual Income Tax Return Monthly Value-Added Tax Declaration 2551M 1601-C Monthly Percentage Tax Return 20th of following month Monthly Remittance Return of Income Taxes Withheld on Compensation 10th of the following Quarterly Value-Added Tax Return (cum.3mo) April 15 20th of following month 25th of following month month (except Dec. Which is filed on 15th of January)
    33. 33. DEADLINE OF FILING and PAYMENT OF TAXES BIR FORM 1601-E DESCRIPTION Monthly Remittance Return of Creditable Income Taxes Withheld (Expanded) 1604- CF Annual Information Return of Income with Alphalist Taxes Withheld on Compensation & Final Withholding Taxes 1604-E Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income payments Exempt from Withholding Tax with Alphalist DEADLINE 10th of the following month (except Dec. which is filed on 15th of January) January 31 of the following year March 1 of the following year
    34. 34. DEADLINE OF FILING and PAYMENT OF TAXES BIR FORM 2000-0T DESCRIPTION DST ON SALE RATE OF TAX DEADLINE 1.5% ON TAX BASE 5TH DAY OF Following MONTH 2000-OT DST ON MORTGAGE P20.1ST P5T+P10 next P5T 2000-OT DST ON LEASE P3.1ST P2T+P1 next P1T 1606 Creditable IT 1.5%; 3%; 5% or 6% 10th day of ff month 1706 Capital Gains Tax 6% of Tax Base Within 30 days from execution 1801 Estate Tax 5% to 20% based on Net Estate Within 180 days from death
    35. 35. DEADLINE OF FILING and PAYMENT OF TAXES BIR FORM DESCRIPTION RATE OF TAX DEADLINE Donor’s Tax 2% to 15% (4th degree) 30% strangers Within 30 days from execution 2550M Value-Added Tax 12% 20th day of ff month 2551M Percentage Tax 3% based on receipts 20th day of ff month 1800 PENALTIES: SURCHARGE OF 25% OR 50% (If willful or fraudulent) INTEREST OF 20% PER ANNUM COMPROMISE (See table of compromise for various penalties)
    36. 36. DEADLINE OF FILING and PAYMENT OF TAXES BIR FORM DESCRIPTION RATE OF TAX DEADLINE Donor’s Tax 2% to 15% (4th degree) 30% strangers Within 30 days from execution 2550M Value-Added Tax 12% 20th day of ff month 2551M Percentage Tax 3% based on receipts 20th day of ff month 1800 PENALTIES: SURCHARGE OF 25% OR 50% (If willful or fraudulent) INTEREST OF 20% PER ANNUM COMPROMISE (See table of compromise for various penalties)
    37. 37. SAMPLE COMPUTATION
    38. 38. HOW TO COMPUTE THE VALUE-ADDED TAX OUTPUT TAX – INPUT TAX= VAT PAYABLE
    39. 39. HOW TO COMPUTE THE PERCENTAGE TAX
    40. 40. Creditable Withholding Tax on Professionals (Sec. 2.57.2. (A)(1) and (I) of RR 2-98, as amended) There shall be withheld a creditable income tax : On the gross professional fees – Fifteen percent (15%), if the gross income for the current year exceeds P720,000; and Ten Percent (10%), if otherwise.
    41. 41. Creditable Withholding Tax • Applicable to Ordinary Asset (for sale in the ordinary course of business; not for sale but used in business; property being depreciated; acquired assets of banks; properties of foreign resident or non-resident corporation)[capital asset- property held by the TP whether or not connected with his trade or business] • Transactions: sale, assignment, exchange • Rates: For habitually engaged in real estate (dealer or developer) 1.5% if selling price is below P500,000.00 3.0% if selling price is over P500,000.00 to P2M 5.0% if selling price is over P2M • Not habitually engaged in real estate (like acquired assets of banks; sale) 6% X Tax Base (regardless of amount)
    42. 42. How to determine whether a particular real property is a capital or ordinary asset • All real properties acquired by the real estate dealer shall be considered as ordinary assets • All real properties acquired by the real estate developer, whether developed or underdeveloped as of the time of acquisition or held primarily for sale or lease to customers in the ordinary course of his trade or business or included in his inventory of the TP if on hand at the close of the taxable year and all form of land, building or other improvements shall be considered as ordinary assets
    43. 43. How to determine whether a particular real property is a capital or ordinary asset • All real properties acquired by the real estate lessor, whether land, building and/or improvements, which are for lease/rent or being offered for lease or rent, or otherwise for use or being used in the trade or business shall be considered as ordinary assets • All real properties acquired in the course of trade or business by a taxpayer habitually engaged in the sale of real property shall be considered as ordinary assets.
    44. 44. How to determine whether a particular real property is a capital or ordinary asset • Registration with the HLURB or HUDCC as a real estate dealer or developer shall be sufficient for a taxpayer to be considered as habitually engaged in the sale of real estate. or if not registered: - consummation during the preceding year of at least 6 taxable real estate transactions.
    45. 45. How to determine whether a particular real property is a capital or ordinary asset • If TP not engaged in the real estate business, real properties, whether land, building or other improvements, which are used or being used or have been previously used in trade or business of the TP shall be considered as ordinary assets.
    46. 46. How to determine whether a particular real property is a capital or ordinary asset • If TP who changed its real estate business to a non-real estate business, real properties held by these TP shall remain to be treated as ordinary assets. • In case TP who originally registered as engaged in real estate business but failed to subsequently operate, all real properties acquired by them shall continue to be treated as ordinary assets.
    47. 47. How to determine whether a particular real property is a capital or ordinary asset • Real properties formerly forming part of the stock in trade of a TP engaged in real estate business, or formerly being used in the trade or business of a TP engaged or not engaged in the real estate business, which were later abandoned and became idle, shall continue to be treated as ordinary assets. Provided, however, properties classified as ordinary assets for being used in business by a TP engaged in business other than real estate business, are automatically converted into capital assets upon showing proof that the same have not been used in business for more than 2 years prior to the consummation of the taxable transactions involving said properties.
    48. 48. How to determine whether a particular real property is a capital or ordinary asset • Real properties classified as capital or ordinary asset in the hands of the seller/ transferor may change their character in the hands of the buyer/transferee, and such shall be determined in accordance with the following rules: - succession or donation to heir or donee who is not engaged in real estate business and does not use such property in trade or business shall be considered as capital asset in the hands of the heir or donee.
    49. 49. How to determine whether a particular real property is a capital or ordinary asset - real property received as dividend by the stockholders who are not engaged in the real estate business and who do not use such property in trade or shall be considered as capital asset in the hands of recipients, even if the corporation which declared the real property dividends is engaged in real estate business.
    50. 50. How to determine whether a particular real property is a capital or ordinary asset - real property received in an exchange shall be treated as ordinary asset in the hands of the case of a tax-free exchange by a TP not engaged in real estate business to a TP who is engaged in real estate business, or to a TP who, even if not engaged in real estate business, will use in business the property received in exchange.
    51. 51. SAMPLE COMPUTATION • COMMISSION COMPUTATION (Percentage Listing without CWT) Selling Price P1,000,000.00 Less: Discount (10%) 100,000.00 Net Selling Price 900,000.00 Multiply by Rate of Commission (X 5%) Agent’s Commission 45,000.00
    52. 52. SAMPLE COMPUTATION • COMMISSION COMPUTATION (Percentage Listing with CWT) Selling Price P1,000,000.00 Less: Discount (10%) 100,000.00 Net Selling Price 900,000.00 Multiply by Rate of Commission (5%) Gross Commission 45,000.00 Less: CWT at 10% 4,500.00 Net Agent’s Commission 40,000.00
    53. 53. SAMPLE COMPUTATION • COMMISSION COMPUTATION (Percentage Listing with CWT/Selling Price with VAT) Selling Price with VAT P3,360,000.00 Less: Discount (10%) 336,000.00 Net Selling Price with VAT 3,024,000.00 Less:VAT (P3,024,000x12/112) 324,000.00 Net Selling Price before VAT 2,700,000.00 Multiply by rate of Commission (5%) Gross Commission 135,000.00 Less: CWT (10%) 13,500.00 Net Agent’s Commission 121,500.00
    54. 54. SAMPLE COMPUTATION • COMMISSION COMPUTATION (Percentage Listing with CWT/Broker is VAT registered) Selling Price with VAT P3,360,000.00 Less: Discount (10%) 336,000.00 Net Selling Price with VAT 3,024,000.00 Less:VAT (P3,024,000x12/112) 324,000.00 Net Selling Price before VAT 2,700,000.00 Multiply by rate of Commission (5%) Gross Commission 135,000.00 Less: CWT (10%) 13,500.00 Net Agent’s Commission 121,500.00 Add: VAT on Commission (12%) 16,200.00 Cash to be paid by the Developer 137,700.00
    55. 55. SAMPLE COMPUTATION NOTES: When to apply VAT or PT – Pay PT of 3% if the transaction is exempt from VAT, i.e.: Sale of capital assets TP annual sales does not exceed P1,919,500 Sale of residential lot below P1,919,500 Sale of house & lot below P3,199,200 Lease of residential unit is below P12,800/month or more than but aggregate is less than P1,919,500 Lease of Comml. Unit with aggregate annual receipt is below P1,919,500.
    56. 56. HOW TO COMPUTE THE WITHHOLDING TAX ON COMPENSATION  Withholding Tax on Compensation –Use the WT Table provided under RR No. 10-2008  Minimum Wage Earners (MWEs) are exempt from income tax, hence, are exempt from withholding tax on compensation. HOW TO COMPUTE THE EXPANDED WITHHOLDING TAX -refer to the back portion of BIR Form No. 1601E for the applicable tax rate for each taxable income payment. NOTE: The EWT being deducted by the withholding agent is merely an advance payment of the IT of the income recipient which is creditable against income tax due and NOT THE FULL PAYMENT of the income tax.
    57. 57. Creditable Withholding Tax on Professionals (Sec. 2.57.2. (A)(1) and (I) of RR 2-98, as amended)  In order to determine the applicable tax rate (10% or 15%) to be applied/withheld by the withholding agent, every individual professional shall periodically disclose his income for the current year to the BIR by submitting a notarized sworn declaration in three (3) copies.  The declaration should be filed on June 30 of each year.
    58. 58. WHERE to FILE and PAY TAXES • Any Authorized Agent Bank (AAB) within the Revenue District Office where the REP is registered or required to register • Revenue Collection Officer (RCO) or duly authorized City or Municipal Treasurer,(in the absence of an AAB) who shall issue a Revenue Official Receipt (BIR Form No. 2524) • eFiling and ePayment through Electronic Filing and Payment System (eFPS)
    59. 59. REMINDERS • The REP needs to FILE a return EVEN when there is NO TAX PAYMENT to be made • THIRD PARTY INFORMATION helps the BIR in verifying tax payments and transaction through linkages with government & other organization.
    60. 60. REMINDERS • The BIR and DOF, under the RUN AFTER TAX EVADERS (RATE) Program investigate and prosecute individuals and entities engaged in TAX EVASION. • The BIR’s Integrated Tax System (ITS) detects non-filing of tax returns and nonpayment of tax by a taxpayer
    61. 61. Compliance List of Info & Documents REPORT MANNER DEADLINE REFERENCE EFPS users -eSubmission - eAttachment -25th day of the month following the end of each taxable quarter - 30th day of the month ff. end of each Qtr. RR No. 12012 RR No. 82002 RR No. 12005 Monthly Alphalist of Payee (MAP) subjected to Expanded WT Hard copy – If less than 10 payees; CD-R – for 10 or more payees; eSubmission for EFPS 10th day of the following month as attachment to BIR Form No.1601-E RR 1-2006 RMC 32006 Summary Alphalist of Withholding Agents of Income Payments subjected to Tax Withheld at Source (SAWT) - Required if claiming tax credit for WT at source (BIR Form 2307) Hard copy – If less than Attachment to BIR 10 payees; CD-R – for 10 Form Nos. 1701Q/ or more payees; 1701 eSubmission for EFPS IF VAT REGISTERED: • Summary List of Sales and Purchases (SLSP) Non-EFPS users -Soft copy; USB; -CD-R; DV-R RR 1-2006 RMC 32006
    62. 62. Compliance List of Info & Documents REPORT MANNER DEADLINE Alphalist of Employees Hard copy – If less than 10 payees; CD-R – for 10 or more payees; eSubmission for EFPS Alphalist of Payee Subjected to Expanded Withholding Tax Hard copy – If less than March 1; as 10 payees; CD-R – for 10 attachment to BIR or more payees; Form 1604-E eSubmission for EFPS Notarized Sworn Declaration of Gross Income for the Current Year Hard copy (3 sets) to be submitted to the Regional Office/Collection Division) & all current payors must be furnished a copy REFERENCE -On or before RR 10-2008 January 31 of the ff year; as attachment to BIR Form 1604-CF RR 10-2008 Not later than June RR 30-2003 30 of each year or within 15 days after the end of the month the professional income reaches P720T whichever comes earlier
    63. 63. HOW TO PASS THE BIR COMPLIANCE TEST
    64. 64. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders • REVENUE REGULATIONS 15-2012 : - Accreditation of Printers as a prerequisite to their Printing Services of Official Receipts, Sales Invoices and Other Commercial Receipts and/or Invoices • REVENUE REGULATIONS 18-2012 : - Processing of Authority to Print Official Receipts, sales Invoices, and other Commercial Invoices using the On-line ATP System and Providing for the Additional Requirements in the Printing thereof.
    65. 65. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders • REVENUE MEMORANDUM CIRCULAR No. 442013 : Extended the validity of unused/unissued Principal and Supplementary Receipts/Invoices (printed prior to January 18, 2013) from June 30, 2013 until August 30, 2013. However, this Circular did not extend the April 30, 2013 deadline for the filing of application for ATP new receipt/ invoices.
    66. 66. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders REVENUE MEMORANDUM ORDER NO. 12-2013 Prescribing Work-around Guidelines & Procedures in the Processing of ATP Official Receipts, Sales Invoices & Other Commercial Invoices in the interim period until the On-line ATP System pursuant to RR No. 18-2012 is fully developed.
    67. 67. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders • RR 3-2012 – Effectivity of threshold amounts for sale of residential lot, sale of house and lot, lease of residential unit and sale or lease of goods or properties or performance of services covered by Section 109(P) & (Q) and (V) of the Tax Code Section Amount in Pesos Adjusted Threshold Section 109 (P) 1,500,000 1,919,500.00 Section 109 (P) 2,500,000 3,199,200.00 Section 109 (Q) 10,000 12,800.00 Section 109 (V) 1,500,000 1,919,500.00
    68. 68. Reason for the adjustment: (RR No. 16-2011, as amended by RR No. 3-2012) • Adjusted to the present values using the Consumer Price Index as published by the National Statistics Office (NSO), (every 3 yrs) • The new threshold amounts shall be made effective for instruments of sale (whether it is nominated as a deed of absolute sale, deed of conditional sale or otherwise) is executed and notarized on or after January 1, 2012.
    69. 69. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders • RR No. V-1 : Bookkeeping Regulations • RR 2-90 : Requirement to register and stamp sales, commercial invoices, officials receipts prior to their use • RR 4-2000 : Posting of Notice for issuance of receipts, sales and commercial invoices and prescribing penalties for non-compliance
    70. 70. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders • RR 10-99 : Rules on the use of CRM & POS • RMO 56-00 : Amending RMO 1-90, on suggested compromise penalties for violation of Sec. 264 of the Tax Code • RMO 28-02 : Modified guidelines and procedures in processing application and issuance of Authority to Print (ATP) receipts, sales or commercial invoices • RMO 29-02 : Processing of application to use CAS or components thereof
    71. 71. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders • Sec. 15 - Authority of internal revenue officers to make arrest and seizure for violation of any penal law, rule or regulation administered by the BIR • Sec.113 – Invoicing & accounting requirements for VAT registered persons • Sec 115 – Power of the CIR to suspend business operation, due to: 1. Failure to issue VAT receipt 2. Failure to file VAT returns 3. Understatement of sales by 30% 4. Failure to register as required by Sec. 236
    72. 72. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders • Sec.232 – Keeping of Books of Accounts • Sec.236 – Registration Requirements • Sec.237 – Issuance of receipts, sale or commercial invoices (all person subject to internal revenue tax, except those exempted by the CIR) • Sec.238 – Rules on printing of receipts, sales and commercial invoices
    73. 73. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders • Sec.241 – Exhibition of Certificate of Registration at the place of business • Sec.264 – Penalties for failure or refusal to issue receipt, sales or commercial invoices and other violations • Sec.275 – Penalty for violation of other provisions of the tax code or rules or regulation, in general.
    74. 74. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders • RMO 33-2002: Policies, guidelines & procedures on the Sale/Disposal of acquired/ forfeited Real Properties transferred in the name of the RP pursuant to Section 216 of the Tax Code (having passed the 1 year redemption period shall be converted into cash within 3 years from date of acquisition/ forfeiture/seizure. Custodians of said properties are required to submit to the Collection Service or its equivalent office under EO 114- inventory list of said properties)
    75. 75. A Tax Compliant Checklist of Applicable Laws, Regulations & Memo Orders RR 4-2008 : Amending the venue for the payment of CGT, CWT & DST due on onerous transfers of real properties owned by TPs classified as LTs pursuant to RR 1-98, as amended, thereby amending for this purpose pertinent provisions of RR 8-98 RMC 72-2007 : Circularizing the full text of Admin Order No. 186, directing the City/Mun./Provl. Assessor, to annotate in all Tax Declaration the Serial Number of the CAR issued by the BIR
    76. 76. Decoupling of degree of tax compliance from visible sign of where tax money are going to. We pay our taxes because we love our country. As a citizen, we have two obligations (1) to pay our taxes, and (2) to make sure government spend it correctly. Commissioner Kim S. Jacinto-Henares 2011 SGATAR Joint Training Program October 11 - 13, 2011 Brisbane, Australia
    77. 77. SUMMARY AYANI at LAW ng EPUBLIKA
    78. 78. End of Presentation

    ×