Because of the increasing numbers of Filipinos in Manila working as self-employed and/or opening up their own business for the first time, more and more questions are raised about income tax return. Most don’t have the slightest idea on how to file and what the forms are for. So to keep it simple and understandable, we’ve laid out some of the frequently asked questions on income tax return in the Philippines.
What exactly is income tax return?
The definition of tax return is the tax form or forms used to file income taxes with the Bureau of Internal Revenue (BIR). Tax returns often are set up in a worksheet format, where the income figures used to calculate the tax liability are written into the documents themselves.
When do you need to file for the ITR?
For businesses with a Calendar year end, deadline for the filing of income tax is on or before the 15th of April every year. Failure to submit your ITR on or before the deadline will cost you fines and penalties. Before the given date, make sure the forms and needed attached documents along with your financial statements are in one place.
Who are required to file for ITR?
If you belong to this list then you need to file for ITR:
· Employed by two or more employers
· Self-employed (professional or entrepreneur)
· Minimum wage earner who is exempt from income tax
· Corporations
· Foundations
What are needed to file for an ITR?
You need to have the proper documents, forms and financial statements. Do not forget to ask for official receipts to reduce your taxable income on allowable expenses. Financial statements must be attached to your ITR upon submission. If you don’t have any idea on how to do your financial statement, it would be best to consult Siargao Accountant.
Is an auditor needed to sign financial statements?
It depends upon your earnings. If your gross quarterly revenue is over P150,000 for any given quarter, or annual income above P600,000 then yes. Take note that not ALL CPAs can do the audit and sign the audit report on the financial statements. A certified public accountant should be accredited by Board of Accountancy (BOA) and Bureau of Internal Revenue (BIR) for him/her to sign the audit report. In certain cases, he/she should also be accredited by the Securities and Exchange Commission (SEC) and Banko Sentral ng Pilipinas (BSP). If the audited financial statements is signed by a non-accredited CPA, the taxpayer will be penalized and the CPA may be reprimanded, or worst, licensed could be revoked.
Are there deductions and exemptions?
Of course. If you are not sure what yours cover, consult Manila Accountant.