Transcript File - Susan Dajao Tusoy

1
WELCOME
PARTICIPANTS TO THE
SEMINAR ON THE BASICS OF TAXATION
For TV/Radio Talents/Media Practitioners/Other TPs
BIR MULTI-PURPOSE HALL
MAY 22, 2014
2
BUREAU OF INTERNAL REVENUE
Tax Update Seminar with
Media Practitioners
Revenue Region 19-Davao City
May 21, 2014
Presented by:
SUSAN D. TUSOY, CPA, MPS
Asst. Chief, Assessment Division
3
4
Topic Outline
Registration, Invoicing and Bookkeeping Regulations
2. Applicable Tax Type
a. Registration Fee
b. Income Tax
c. Business Tax (VAT and Percentage)
d. Withholding Tax
1.
REGISTRATION
FEES
6
When to register
 On or before the commencement of
business
 Before payment of any tax due
 Upon filing of a return, statement or
declaration as required by the NIRC.
 Employee: within 10 days from date of
employment
7
BIR Registration Procedures
PRIMARY
REGISTRATION
STAGE 1
Application &
Issuance of TIN
SECONDARY
REGISTRATION
STAGE 2
Registration of
Business/Practice of
Profession/Employment
Registration of books,
Issuance of ATP, CAS
and Loose-leaf
On Registration
• Pay Annual Registration Fee of P500.00 upon
registration and every year thereafter on or
before Jan. 31
• for every separate or distinct establishment
or place of business, including facility types
where sales transactions occur
On Registration
•
(RR 4-2014)
Submit an affidavit indicating the rates,
manner of billings and the factors
considered in determining their service fees
on or before Jan. 31 every year
• Transition deadline: May 31, 2014 (RMC
32-2014)
10
INVOICING
REQUIREMENTS
11
Invoicing Requirements
• Issue sequentially Official Receipt (OR) for
fees received
• Each OR issued shall indicate the name and
address of the client, date of transaction,
nature of service rendered and the amount.
12
Invoicing Requirements
• The OR shall be accomplished at least in
duplicate
• The duplicate retained & preserved in place
of business for 10 years from close of
taxable year (RR 17-2013).
13
Invoicing Requirements (RR 4-2014)
• In cases no professional fees are charged by the
professional and paid by client, a BIR registered
receipt, duly acknowledged by the later, shall be
issued showing a discount of 100% as substantiation
of the “pro-bono” service.
13
Sample of Commercial Invoice – A Non-VAT Official Receipt
SAMPLE ONLY
15
Proper Invoicing and Receipting of Output Tax
Revenue Regulations 18-2011
• Reiterates Sec. 237 of the Tax Code that VAT-registered
taxpayers should separately bill the VAT.
• The amount shall be shown as a separate item in the
invoice or receipt
15
16
Proper Invoicing and Receipting of Output Tax
Ex: If the amount charged is P560.00, it shall be
presented in the following manner:
Professional Fee (P560.00/112%)
Add12% VAT (12% of P500.00)
Total Amount charged
P 500.00
60.00
P 560.00
16
17
Proper Invoicing and Receipting of Output Tax
SAMPLE ONLY
17
Principal Receipts/Invoices (RR 18-2012)
• A written account evidencing the
sale of goods and/or services issued
to customers in an ordinary course
of business
18
VAT Sales Invoice
A written account evidencing the sale of
goods and/or properties
issued whether cash sales or on
account
 Basis of the output tax liability of the
seller and the input tax claim of the
buyer
Includes Cash Sales Invoices & Charge
Sales Invoices
19
VAT Official Receipt
• A proof of sale of service and/or leasing of
properties
• Basis of the output tax liability of the seller
and the input tax claim of the buyer
20
Non-VAT Receipts/Invoices
• Non-Vat Sales Invoices
• A written account evidencing the sale of goods and/or
properties, whether cash sales or on account
• Basis of the Percentage Tax liability of the seller
• Non-Vat Official Receipts
• A proof of sale of service and/or leasing of properties
• Basis of the Percentage Tax liability of the seller
21
Supplementary Receipts/Invoices
• Also known as Commercial Invoices
• Documents evidencing delivery, agreement to
sell or transfer of goods and services
• Example
• Delivery Receipt
• Collection Receipt
22
Salient Features
• The approved ATP shall be valid only upon full
usage of the inclusive serial numbers of
principal and supplementary receipts/invoices
reflected in such ATP or five (5) years from
issuance of the same, whichever comes first.
23
Salient Features
• ONLY BIR ACCREDITED
PRINTERS shall have the
exclusive authority to print
principal and supplementary
receipts/invoices.
24
Transitory Provision
Expiring Authority to Print (ATP) for
invoices/receipts (principal and
supplementary) shall apply for a new ATP not
later than 60 days prior to actual expiry date
25
Expired Receipts/Invoices
• Those with ATP prior to Jan. 1, 2011 were valid only
until Aug. 30, 2013 while those with ATP dated Jan.
1, 2011 to Jan. 17, 2013 were valid only until Oct.
31, 2013.
• Issuance of receipts/invoices after its validity
constitute a violation of Sec. 264 of the NIRC of
1997
• It is considered as if no receipt/invoice was issued
Expired Receipts/Invoices
• No deduction from gross income shall be allowed using
these invoices/receipts as there are not valid proof of
substantiation
• In case of VAT-registered persons, no input tax may be
claimed using these receipts/invoices
On issuance of tax clearance
(RMC 52-2013)
• To fully implement the requirements under RR 18-2012, a
certified true copy of the ATP shall be included as
attachment
• No ATP shall be a ground for non-issuance of tax clearance
for whatever purposes
29
The importance of Asking for Receipts
• To support input tax claims
• Will facilitate audit trail
• To ascertain that sales transactions are properly
recorded
• Corresponding taxes are paid
• To support business purchases/expenses
29
BOOKKEEPING
REQUIREMENTS
30
31
BOOKKEEPING REQUIREMENTS
• Required to register books of accounts
• Journal
• Ledger
• Subsidiary Ledger
• Preserved within the prescriptive
period of 10 yrs
• Gross receipts exceeding P150,000 in any
given quarter must be audited by a CPA
32
BOOKKEEPING REQUIREMENTS
• Transactions for the day must be entered in
books on or before 12nn the following day.
Balances transferred to Ledger day following
end of month
• It’s not required to register new set of books
every year; only before the pages of current
book is almost used up.
33
For Medical/Dental Practitioners
PATIENTS’ LOG BOOK (A subsidiary book)
• Daily list of clients w/ the corresponding fees
including those free of charge, per branch
• Name and address
• Date
• Official receipt no.
• Amount charge
• Must be registered with the BIR
34
For Restaurants/Drugstores and the like
• Maintain subsidiary book
• For Senior Citizens Discount
• For Persons with Disability
35
For all professionals
Official Appointment Books (RR 4-2014)
• Shall be registered with the BIR
• Transition: not later than May 31, 2014 (RR 32-2014)
• Shall contain
• Names of the client
• Date/time of the meeting
36
Tax Compliance Verification Drive
(Tax mapping)
Original Certificate of Registration, Registration Fee and the
Ask for Receipt Notice must be conspicuously displayed in
the physician’s place of business and/or clinic
Income Tax
Sample Computation – Itemized Deduction
Gross Receipts
Less: Allowable Deductions (itemized)
Rent
Fuel and Oil
Communication
Supplies
Professional Fees
Net Income
Less: Personal Exemption
Additional Exemption (2 dep.)
Net Taxable Income
Tax Due
Tax Withheld (1st to 4th Qtr) Form 2307
Quarterly Income Tax Payment
Payable
P2,000,000
P 500,000
50,000
20,000
280,000
100,000
50,000
50,000
950,000
P1,050,000
100,000
P 950,000
P 269,000
212,500
50,000
262,500
P
6,500
INCOME TAX TABLE
OVER BUT NOT OVER AMOUNT RATE OF EXCESS OVER
Not over
10,000
30,000
70,000
140,000
250,000
500,000
10,0000
30,000
70,000
140,000
250,000
500,000
over
500 +
2,500 +
8,500 +
22,500 +
50,000 +
125,000 +
5%
10%
15%
20%
25%
30%
32%
10,000
30,000
70,000
140,000
250,000
500,000
Business Expenses:
• To be deductible, business expense must:
• constitute ordinary and necessary expense;
• to be paid or incurred during the taxable year in
carrying on or directly attributable to operation and/or
conduct of trade, business, or profession;
• be reasonable in amount;
• be sustained by adequate proof;
• not be against law or public policy
RR 12-2013 – Requirements for
Deductibility
• Any income payment allowable as deduction shall only be
allowed to be deducted if:
• The income tax required to be withheld has been paid to the BIR
• No deduction shall be allowed notwithstanding payments of WTAX
at the time of investigation
Sample Computation –
Optional Standard Deduction
Gross Receipts
Less: Optional Standard Deduction (40%)
P2,000,000
800,000
Net Income
Less: Personal Exemption
Additional Exemption (2 dep.)
Net Taxable Income
P 1,200,000
Tax Due
Tax Withheld (1st to 4th Qtr)
Quarterly Income Tax Payment
Payable
50,000
50,000
100,000
P 1,100,000
P
212,500
50,000
317,000
262,500
P
54,500
43
Advantages of using optional standard
deduction (for individual taxpayers)
• shall not be required to submit with his tax return such
financial statements otherwise required under the Code
• shall keep such records pertaining to his gross sales or
gross receipts,
Income Tax Due Dates
Income Tax Period
1st Quarter
2nd Quarter
3rd Quarter
Annual Return
Due Date
Individual
April 15
Aug. 15
Nov. 15
April 15
Value Added Tax/
Percentage Tax
46
VAT vs. NON-VAT
Value Added Tax (12%)
• Medical/dental services rendered by professionals whose gross
receipts exceed the threshold of P1,919,500
Non-VAT
• If gross receipts do not exceed the threshold
• Subject to 3% percentage tax
47
VAT defined
• It is a tax on the value added to the purchase
price or cost in the sale or lease of goods,
properties, or services in the course of trade
or business.
• Due Date
48
VAT Payable
Output Tax ( P100,000 x 12%)
-
P12,000.00
Less Input Tax (60,000 x 12%)
VAT payable
-
7,200.00
P 4,800.00
49
HOW TO COMPUTE VAT-gov’t transaction
Formula:
Output Tax (12% of Gross receipts )
Less Standard Input Tax (7% of gross receipts)
VAT Payable
Less 5% withholding tax
VAT Payable
P xxx
xxx
P xxx
xxx
P xxx
49
50
Sources of Input Tax
• Purchase of goods/services for which the VAT
was actually paid, like:
• Rentals on office
• Purchase of medical supplies
• Communication expenses
• Fuel
• Professional services
• etc
Submission of Summary List of
Sales and Purchases
 RR 1-2012
– Mandatory submission of Quarterly
Summary List of Sales and Purchases by all
VAT registered taxpayers effective Jan. 1,
2012
 Due Date:
On or before the 25th day of the month
following the close of the taxable
quarter.
Submission of SLS / SLP
SLS/SLP shall be submitted
in softcopy to the RDO having
jurisdiction of the taxpayer on
or before the 25th day of the
month following the close of
the taxable quarter
Percentage Tax
Percentage Tax
 Rate - 3% of gross revenue
 if gross revenue do not exceed P1.5M (now P1,919,500 pursuant
to RR 16-2011) otherwise subject to VAT
 Due Date – every 20th day of the following month
 Professional Fee – P 100,000 x 3%
= P3,000.00
Withholding Tax
56
Professionals as Withholding Agents (as payor)
Required to deduct Expanded Withholding Tax
• Rentals – 5%
• Contractors – 2%
• Professional fees -10% or 15%
• etc. (see BIR Form 1601E)
57
Professionals as W/holding Agents (as payor)
Example: Dr. A is renting a clinic space at P10,000/mo.*
Expanded Withholding Tax is P 10,000 x 5% = P500.00
Due date: Every 10th day of the following month except
for the month of Dec., which shall be due on
Jan. 15 of the ff year
*net of VAT
58
Professionals as Withholding Agents (As payor)
Consequence if not remitted on time:
Computation:
Basic Tax (P10,000 x 5%)
Add: 25% surcharge
20% interest per annum*
comp. pen for late payment
Total Payable
P
125.00
8.21
200.00
P
500.00
333.21
P
833.21
*assuming payment was delayed for 30 days (P500 x 20% x 30/365 days)
59
Professionals as Withholding Agents (as payor)
Withholding Tax on Wages
 Salary of employees, if paying more than the Minimum
Wage
60
Prof are Subject to Withholding Tax (as payee) on their
Professional Fees
Expanded Withholding Tax (EWT)
 creditable against Income Tax
 15% if exceeding P720T, 10% for less than
 Disclosure Requirement (RR 12-01)
Using the Notarized Sworn Declaration (Annex A of RR
12-01)
Submit to the Collection Division
Due on June 30 each year or within 15 days when the
income reaches P720,000 whichever comes first
61
Prof are Subject to Withholding Tax (as payee) on
their Professional Fees
On Government Money Payments
(Ex: Payments of PHIC to medical doctors)
5% of Gross Income if VAT Registered Taxpayer
(creditable against VAT liability)
3% of Gross Receipts for Non-VAT Taxpayer
(creditable against Percentage Tax liability)
duty and responsibility of the
hospitals, clinics, HMOs (RR 14-2013)
 To withhold and remit taxes due on the
professional fees of their respective
accredited medical practitioners, paid by
patients who were admitted and confined
to such hospitals and clinics
 Must ensure that correct taxes due on the
PF have been withheld and timely remitted
to the BIR
duty and responsibility of the hospitals, clinics,
HMOs
• Shall NOT allow their medical practitioners
to receive payment of professional fees
directly from patients who were admitted
and confined
• Must include the PF in the total medical
bill of the patient which shall be payable
directly to the hospital/clinic
Exception
• The wtax shall not apply whenever there is
no PF has in fact been charged
• There must be a sworn declaration jointly executed
by the medical practitioner and the patient
• The hospital administrator shall inform the RDO
having jurisdiction over such hospital or clinic if fails
or refuses to execute within 10 days from date of
occurrence.
(The doctor must still issue an OR indicating
100% discount – RR 4-2014)
Responsibility of Hosp./Clinics/HMOs
• Shall be responsible for the correct
computation and timely remittance of Wtax
• include in the 1604E
• Issue 2307 every 20th day ff the close of the
quarter or upon request of the payee
Responsibility of Hosp./Clinics/HMOs
• Shall submit a sworn statement executed by the
pres./managing partner as to the complete and
updated list of medical practitioners accredited with
them
• Where: Collection Div / LT-Coll Div / LTDO
• 2 copies for the BIR and 1 copy for the TP
Reports to be submitted by
Hospitals/Clinics
• Submit the names and addresses of medical
practitioners whose:
• PF was paid by the patients directly to the hospital/clinic
• Medical practitioners who did not charge any PF from their
patients
• every 15th day after the end of each calendar quarter
to the Collection Div.
74
The importance of Withholding Tax Certificates
(Form 2306/2307)
• To support tax credit claims per return
• No certificate, no tax credit allowed
• Serve as proof of transaction
Note: Be conscientious in gathering the
withholding tax certificates on time
74
75
Stop filer Cases
• Can be detected in our system
• Such stop-filer case shall remain open until the
corresponding return is duly filed and paid including
penalties.
96
On Marginal Income Earners (RMC 7-2014)
• MIE – shall refer to those individual whose
business do not realize gross sales or
receipts exceeding P100,000 in any 12month period
• Not deriving compensation
• Only self-employed with gross sales/receipts
not exceeding P100,000
97
On Marginal Income Earners (RMC 7-2014)
• Shall include but not limited to:
• Agricultural growers/producers (farmers/fishermen)
• Selling directly to ultimate consumers
• Small sari-sari stores
• Small carinderias or turo-turos
• Drivers/operators of a single unit tricycle
• Shall not include licensed professionals, consultants, artists, sales
agents, brokers and others similarly situated
98
On Marginal Income Earners (RMC 7-2014)
• Privileges/minimum requirements
• Registration
• Sworn Statement (Annex A)
• NSO certified /local civil registry birth certificate
• Exemption from ARF
• Registration of books (2 col journal or simplified books)
• Issuance of registered principal receipts/invoices
• Filing/payment of ITR
• Exemption from Percentage tax / VAT
www.them
egallery.c
om
Thank you!