today's lessons

I do business. Yes. But when it comes to requirements with the BIR, I let others do that for me. It's a shame to admit, though, that I know only little about what needs to be done. Every deadline (and boy there are a lot!), I just sign the forms, vouchers and checks...and I'm as good as done. Today, I'd say, is a humbling experience. I realized it takes effort to follow the law, by the book.

First, for the organization I belong to. And second, for Mhel's friends who know that I have close relations in the bureau. So I went to the office and asked questions and I was hyper when I left. You'll know why because the list below includes my learnings today:

Disclaimer: The following list may get too technical and may bore you. Read on but don't say I didn't warn :) These might help you in the future.

1. One entity must be registered with the BIR within one month from being registered with DTI or SEC. Failure to comply would mean P1,000 penalty.

2. If unregistered, Official Receipts may not be printed. Late request for printing merits P10,000 penalty! Some districts allow this amount to be waived if proven that there were no operations during the months the entity failed to register.

3. A minimum of ten booklets must be printed initially, even the entity is as small as our group.

4. Taxation is a tricky subject, believe me. Some items apply to some entities, some don't. To be able to figure out what needs to be done, all aspects must be examined closely.

5. There is a threshold for computing for VAT which is different now and different until the TRO on the new VAT is lifted. Even the rate of 10% now may be changed to 12% in 2006. If threshold isn't met, a 3% percentage tax is collected instead.

6. The Income tax is computed based on gross income and is computed using a table. It is due quarterly except for the last quarter of the taxable year which is consolidated in the annual return.

7. Expanded withholding tax is 10% of rental expense and is due to be filed monthly.

8. Withholding tax compensation of employees is based on a table and/or 10% if on Commission basis. Also filed monthly.

9. The VAT return is filed monthly except every third month which is consolidated into a quarterly return.

10. The registration fee is p500 annually.


Hey! Still there? I sound so scholarly, hehe. For once.