Reminder to all online sellers! Pay your taxes! :-) RMC No. 55-2013

REVENUE MEMORANDUM CIRCULAR NO. 55-2013

REITERATING TAXPAYERS' OBLIGATIONS IN RELATION TO ONLINE BUSINESS TRANSACTIONS


What does it means?

It means online sellers, in however form should pay taxes says the BIR. :-)


BIR has classified online transaction as follows: Check which one you're classified with.

1. Business to Consumer ( "B2C")  - which involves online store selling gods and services to final consumers.

( You are included in this group if you have a website, online store, selling goods or services to your costumers/clients/consumers. )

2. Consumer to consumer ( "C2C') 

( You are included in this group if you sell online through www.facebook.com, www.sulit.com.ph, www.ayosdito.ph, www.ebay.com.ph, etc. as long as your are selling online whatever website you are coursing/using to sell your goods and services.)

3. Business to Business ( "B2B") which encompasses job recruitment, online advertising, credit, sales, market research, technical support, procurement, and different types of training.

( This includes companies who offers their goods and services to other companies. )


If you are classified in any of the above you are required to register your business with BIR and pay your taxes accordingly. :-)


How do you do it?

First: Register your business at the Revenue District Office ( RDO) having jurisdiction over the principal place of business/head office ( or residence in case of individuals).





 
Before you go to BIR to register your business,
You have to secure first the ff:

1. Go to your barangay hall for Barangay Clearance.

2. Then, register your business in Department of Trade and Industry (DTI) . www.dti.gov.ph
( Think of what you will name your business,  ex. Mabenta Online Enterprise but you have to check it first with DTI if the name is taken already so you need to prepare at least three names for your business just in case the other two have been taken already.)

3. Go to city hall for your business permit.

 Requirements for new business in Quezon city:

( Original & Photocopy)

1. Barangay Clearance
2. DTI for single proprietor, SEC with Articles for Corporation
3. Title or tax declaration ( if owned) Contract of lease ( if rented)
4. Location Clearance
5. Authorization letter & ID ( if representative)
6. Other documents required per nature of business.



Reminder: May bayad lahat ang pagkuha ng barangay clearance, DTI and business permit. :-)

Those are the requirements before when you register your business in BIR.
But someone told me last week ( October 2013) that you only need DTI to register in BIR in Makati. But last week October 2013,  our staff went to BIR - RDO 40 in Cubao, Quezon City to register and they are still asking for business permit. if you are in Makati area, you can check it first with them if you can register your business with DTI only, then you can go straight to BIR first, before you get your business permit from the city hall.


How do you register your business in BIR?

1. Accomplish BIR form 1901 ( for individual ) & 1903 ( for corporations or partnerships)
    With the ff:
     For individual: 1. birth certificate  2. mayor's permit  3. DTI

2. Pay registration fee to any bank ( AAB-Authorized Agent Bank) located within you RDO.
       ( Use BIR form 605 when you pay this in bank)

3. Then, the BIR will issue your Certificate of Registration
       ( this should  be displayed conspicuously in the business establishment for those in traditional/not online  business, since the BIR usually conduct tax mapping for these.)

  *** conspicuously meaning it should be where it can be seen clearly, or it should be in a noticeable place.


 What to do next?

1. Secure te required Authority to print (ATP) invoices/receipts and register books of accounts for use in business, which may either be:

A.) Manual books of accounts, booklets of invoices/receipts, accounting records or loose-leaf.
B.) Computrized Accounting System (CAS) and/or its components including e-Invoicing system under Revenue Memorandum order (RMO) No. 21-2000 as amended by RMO No. 29-02.


After you register your business and you have your books of account, what do you do now?

1. Issue registered invoice or receipt, either manually or electronically after every sale, barter, exchange, or lease of goods and properties as well as for every sale, barter, or exchange of service.

2. Withhold required creditable/ expanded withholding tax, final tax. tax on compensation of employees, and other withholding taxes. Remit the same to the BIR at the time/ times required, and issue to the concerned payees the necessary Certificate of Tax Withheld.

3. File applicable tax returns on or before the due dates, pay correct internal revenue taxes, and submit information returns and other tax compliance reports such as Summary of List of Sales/Purchases. ( SLS/P), Annual Apha List of Payees, etc. at the time or time required by existing rules and regulations.

( Check your Certificate of Registration, it is listed their the required tax return you need to file.
Ex. if you are VAT registered you need to file BIR form 2550M every month and 2550Q for the quarter or BIR form 2551M if you registered in percentage tax.)


4. Keep books of account and other business/accounting records with in time prescribed by the law, and such shall be made available anytime for inspection and verification by duly authorized Revenue Officer/s for the purpose of ascertaining compliance with tax rules and regulations.


For  "C2C' type, i think the above information is enough for you since mostly of C2C transact are on cash basis but the "B2C" and "B2B" i think they have their own accountant to take care of the withholding and other accounting stuff they need to accomplish. :-)

 

For comments, questions and suggestions, please email me at yourtaxmama@gmail.com or at ione.mejia@gmail.com

PICPA's 2013 National Accountancy Week

 

I am posting the PICPA's Schedule of  Activities for 2013 National Accountancy Week. I got this from PICPA Eastern Metro Manila Group in Facebook.

I will have to attend to this since i'm a member of  (ACPAPP) Association of CPA in Public Practice, although I have been inactive since my induction. Hehehe. I guess it's time for me to be active in the organization. :-)

 

BIR REVENUE REGULATION 1-2012-Mandatory Submission of Summary List of Sales & Purchases

Revenue Regulation 1-2012 : Requires the MANDATORY  submission of Quarterly Summary List of Sales and Purchases by all VAT registered taxpayers. - Issued February  20, 2012

I think a lot of taxpayers are still unaware of this revenue regulation, stating the mandatory submission of summary list of sales & summary list of purchases, even if this regulation has already been issued last year.

What it means to us? 

Answer: All VAT registered taxpayers, regardless of  total sales & purchases are required to submit the Quarterly Summary List of  Sales & Quarterly Summary List of Purchases.

When do we submit it?

Answer: We have to submit it on or before the twenty-fifth (25th) day of the month following the close of the taxable quarter (VAT quarter)-calendar quarter or fiscal quarter. However, taxpayers under the jurisdiction of the LTS, and those enrolled under the EFPS, shall, through electronic filing facility submit their  Summary List of Sales/Purchases to the RDO/LTDO/LTAD, on or before the thirtieth (30

For the calendar quarter these are the deadline:

1st quater covers  January to March           =  deadline is April 25

2nd quarter covers April to June                 = deadline is July 25

3rd quarter covers July to September         = deadline is October 25

4th quarter covers October to December    = deadline is January 25

Where to submit it?

We have to submit it to the Revenue District Office ( RDO), Large Taxpayer District Office ( LTDO) or Large Taxpayers Assistance Division (LTAD) whichever has jurisdiction over the taxpayer.

( For non large taxpayer; check your Certificate of Registration which RDO you belong.)

 

How to submit it?

Answer: Save it in Compact Disk Recordable (CDR) and bring it to BIR.

 

Things you need to know:

This is an amendment to Revenue Regulation 16-2005, which is called,  the Consolidated Value Added Tax (VAT) regulations of  2005

Which requires:

1. All VAT registered  taxpayers such as manufacturers, wholesalers, service-providers, among others, with quarterly total sales/receipts (net of VAT) exceeding Two Million Five Hundred Thousand Pesos

(P 2,500,000.00 to submit Summary List of Sales, NOW it has become MANDATORY to all VAT registered tax payers.

 

2. All VAT registered taxpayers such as manufacturers, service-providers, among others, with quarterly total purchases (net of VAT) exceeding One Million Pesos (P 1,000,000.00) are required to submit summary List of  Purchases, NOW regardless of  the total quarterly purchases, it's MANDATORY to all VAT registered taxpayers to submit the quarterly summary list of sales & purchases.

What do you mean  by mandatory?

Answer:

man•da•to•ry (ˈmæn dəˌtɔr i, -ˌtoʊr i)

adj., n., pl. -ries. adj.

1. authoritatively ordered; obligatory.

2. pertaining to, of the nature of, or containing a command.

3. having received a mandate, as a nation.

 man·da·to·ry  (mnd-tôr, -tr)

adj.

1. Required or commanded by authority; obligatory: Attendance at the meeting is mandatory.

2. Of, having the nature of, or containing a mandate.

3. Holding a League of Nations mandate over a territory.

n.pl.man·da·to·ries

mandatory

adjective compulsory, required, binding, obligatory, requisite Attendance is mandatory.
voluntary, unnecessary, optional, discretionary, nonbinding, noncompulsory, nonobligatory

For comments, questions and suggestions, please email me at yourtaxmama@gmail.com or at ione.mejia@gmail.com

SALES INVOICE VS OFFICIAL RECEIPT

Since i started writing about invoicing, i remember, I have been ask a few times, what's  the difference between sales invoice and official receipt. Also when to issued sales invoice or official receipt. Here it is.

What is Sales Invoice?

From Wikipedia:

An invoice or bill is a commercial document issued by a seller to a buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the sale transaction only. Payment terms are independent of the invoice and are negotiated by the buyer and the seller. Payment terms are usually included on the invoice. The buyer could have already paid for the products or services listed on the invoice. Buyer can also have a maximum number of days in which to pay for these goods and is sometimes offered a discount if paid before the due date.

In the rental industry, an invoice must include a specific reference to the duration of the time being billed, so in addition to quantity, price and discount the invoicing amount is also based on duration. Generally each line of a rental invoice will refer to the actual hours, days, weeks, months, etc., being billed.

From the point of view of a seller, an invoice is a sales invoice. From the point of view of a buyer, an invoice is a purchase invoice. The document indicates the buyer and seller, but the term invoice indicates money is owed or owing. In English, the context of the term invoice is usually used to clarify its meaning, such as "We sent them an invoice" (they owe us money) or "We received an invoice from them" (we owe them money).

 Simply means:

 SALES INVOICE is a document that records the sale of goods or services from a vendor to a customer.

What is an official receipt?

Yahoo Answer:

An official receipt is a written acknowledgment. It is a specified note that shows money which has been received as an exchange for products or services. The receipt aims to provide an assurance that the party has paid the expenses of the products which it has purchased. Official receipts can be printable or online and their format and pattern can vary depending upon the requirements of the company.
Basically, an official receipt proves how much you've paid for something

 Therefore:

 SALES INVOICE is a document that records the sale of goods or services from a vendor to a customer. While an OFFICIAL RECEIPT is a document which records the payment of sale of goods or services .

 As per BIR:

Sales Invoice is used if you are selling goods or properties  while Official Receipts is issued for services rendered.  

National Internal Revenue Code

SEC. 106. Value-Added Tax on Sale of Goods or Properties.

(1)  The term 'goods' or 'properties' shall mean all tangible and intangible objects which are capable of pecuniary estimation and shall include:
 
(a)  Real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business; (b)  The right or the privilege to use patent, copyright, design or model, plan, secret formula or process, goodwill, trademark, trade brand or other like property or right;
(c)  The right or the privilege to use in the Philippines of any industrial, commercial or scientific equipment;
(d)  The right or the privilege to use motion picture films, tapes and discs; and
(e)  Radio, television, satellite transmission and cable television time.

SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties.

The phrase 'sale or exchange of services' means the performance of all kinds or services in the Philippines for others for a fee, remuneration or consideration, including those performed or rendered by construction and service contractors; stock, real estate, commercial, customs and immigration brokers; lessors of property, whether personal or real; warehousing services; lessors or distributors of cinematographic films; persons engaged in milling processing, manufacturing or repacking goods for others; proprietors, operators or keepers of hotels, motels, resthouses, pension houses, inns, resorts; proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers; dealers in securities; lending investors; transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire another domestic common carriers by land, air and water relative to their transport of goods or cargoes; services of franchise grantees of telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Section 119 of this Code; services of banks, non-bank financial intermediaries and finance companies; and non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; and similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties. The phrase 'sale or exchange of services' shall likewise include:

(1) The lease or the use of or the right or privilege to use any copyright, patent, design or model, plan secret formula or process, goodwill, trademark, trade brand or other like property or right; (2) The lease of the use of, or the right to use of any industrial, commercial or scientific equipment;
(3) The supply of scientific, technical, industrial or commercial knowledge or information;
(4)  The supply of any assistance that is ancillary and subsidiary to and is furnished as a means of enabling the application or enjoyment of any such property, or right as is mentioned in subparagraph (2) or any such knowledge or information as is mentioned in subparagraph (3);
(5)  The supply of services by a nonresident person or his employee in connection with the use of property or rights belonging to, or the installation or operation of any brand, machinery or other apparatus purchased from such nonresident person.
(6)  The supply of technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme;
(7)  The lease of motion picture films, films, tapes and discs; and
(8)  The lease or the use of or the right to use radio, television, satellite transmission and cable television time.
Lease of properties shall be subject to the tax herein imposed irrespective of the place where the contract of lease or licensing agreement was executed if the property is leased or used in the Philippines.

( Above entry is to give you definition of what the term " goods or properties" & " services" means to BIR )

Question: Where do you record Sale Invoice & Official Receipts?

Answer: SALES INVOICE  is recorded in the Sales Book while OFFICIAL RECEIPT is recorded in Cash Receipt Book.

Lastly: Sales Invoice think of Account Receivable

             Official Receipt think of Cash

Check the REVENUE MEMORANDUM ORDER 12-2013 for the sample of the new official receipts and sales invoice. Go to www.bir.gov.ph or check the link below.

ftp://ftp.bir.gov.ph/webadmin1/pdf/70534RMO%2012-2013.pdf

For comments, questions, suggestions, email me at  yourtaxmama@gmail.com or at ione.mejia@gmail.com

THINGS YOU NEED TO KNOW ABOUT BIR'S NEW INVOICING REQUIREMENT - BIR RR 18-2012

Revenue Regulation No. 18-2012  - Prescribes the policies and guidelines in the processing of Authority to Print (ATP) Official Receipts, Sales Invoices and other Commercial Invoices using the online ATP System and provides for the additional requirements in the printing thereof.

*** RR = Revenue Regulation


Question:  What RR 18-2012 means to us?


Answer:  RR 18-2012 means persons whether private or government, who are engaged in business ( all business establishments )  are required to secure new Authority to Print  (ATP)  and print new invoice/receipt and all commercial documents being issued to customers,  your existing documents (old receipts and invoices)  printed before January 18, 2013 are only valid till August 30, 2013.

*** ATP - Authority to Print

 
What to do? 

Look or  go to your printer, which should be authorized/ accredited by the BIR. BIR has list of accredited printer, check if your printer is accredited by the BIR.



 
Things you need to need to know: 

1. Principal receipts/ invoices , supplementary receipts/ invoices and any other documents being used in the business and issued to custumer are required to be registered before printing.

2. Your existing documents (unused and unissued receipts and invoices)  printed before January 18, 2013 are valid only till August 30, 2013. The unused receipts and invoices shall be surrendered to BIR for destruction.

3. Approved ATP is valid upon full usage of the serial numbers of five ( 5 ) years from issuance, whichever comes first.

4. For newly registered taxpayers, the ATP shall be secured simultaneously with the Certificate of Registration ( COR).

5. A taxpayer with expiring ATP for its receipts/invoices ( principal and supplementary) shall apply for a new ATP not later than sixty ( 60) days prior to expiry date.

Example : 

Your ATP expiring on  December 31, 2013, you should apply for new ATP before October 31, 2013.
              
6. All unused/unissued principal/supplementary receipts/invoices shall be surrendered to the Revenue District Office (RDO) where the taxpayer is registered on of before the 10th day after the validity period of the expired receipts/invoices for destruction. An inventory listing of the same shall also be submitted.




What  are the  principal receipts/ invoice?

1. VAT Sales Invoice
2. Non VAT Sales Invoice
3. VAT Official Receipts
4. Non VAT Official Receipts

What are the supplementary receipts/invoices?
1.  Delivery Receipts
2. Order Slips
3. Debit/ Credit Memo
4. Purchase Order
5. Provisional/temporary Receipts
6. Acknowledgement Receipts
7. Collection Receipts
8. Cash Receipt
9. Bill of lading
10. Billing Statement
11. Statement of Account
12. Any other document used in business & issued to customer.

                                           AUTHORITY TO PRINT ( BIR Form 1921)



For comments, questions, suggestions, email me at  yourtaxmama@gmail.com or at ione.mejia@gmail.com

BIR - RMC 44-2013 - Unused OR, Invoices valid till August 30,2013

Hear ye! Hear ye! 

Bureau of Internal Revenue, Revenue Memorandum Circular No. 44-2013 dated June 11, 2013. =  Extending the validity of unused and unissued principal and supplementary receipts/invoices printed prior to January 18, 2013  and other Matters.

Question:  What it means to us?

Simply means,  you can still use your current official receipts, sales invoices, etc.  till August 30, 2013 without penalty. After August 30, 2013, ( starting August 31, 2013) all principal and supplementary receipts/invoices printed before January 18, 2013 shall no longer be valid.

However,  the deadline for filing of an application for the printing of new receipts to replace all unused/unissued principal supplementary receipts/invoices before  January 18, 2013 shall be the same,  April 30, 2013, therefore all applications received after April 30, 2031,  shall be considered late application and the penalties for late filing shall imposed..

Question: How much is  the penalty for late filing?

Answer: One thousand pesos ( P 1,000.00)

Question: What will happen if you use receipts/invoices (which is printed before January 18, 2013) on August  31, 2013?

Answer:  Issuance of the said receipts/invoices shall be deemed invalid , or deemed as if no receipts were issued and a violation of Sec. 264 of the National Internal Revenue Code. 

 Question:  What will happen if your issued receipts/invoices are deemed invalid or if it is deemed as if no receipts were issued ?

Answer: Transactions with the said receipts are deemed not properly substantiated and may not be allowed as a deduction.

Question:  What is Sec. 264 of the National Internal Revenue Code?

Sec. 264. Failure or refusal to Issue Receipts or Sales or Commercial Invoices, Violations related to the Printing of such Receipts or Invoices and Other Violations. -

(a) Any person who, being required under Section 237 to issue receipts or sales or commercial invoices, fails or refuses to issue such receipts of invoices, issues receipts or invoices that do not truly reflect and/or contain all the information required to be shown therein, or uses multiple or double receipts or invoices, shall, upon conviction for each act or omission, be punished by a fine of not less than One thousand pesos (P1,000) but not more than Fifty thousand pesos (P50,000) and suffer imprisonment of not less than two (2) years but not more than four (4) years.

(b) Any person who commits any of the acts enumerated hereunder shall be penalized in the same manner and to the same extent as provided for in this Section:

(1) Printing of receipts or sales or commercial invoices without authority from the Bureau of Internal Revenue; or(2) Printing of double or multiple sets of invoices or receipts; or
(3) Printing of unnumbered receipts or sales or commercial invoices, not bearing the name, business style, Taxpayer Identification Number, and business address of the person or entity.

For comments, questions, suggestions, email me at  yourtaxmama@gmail.com or at ione.mejia@gmail.com