Lower your taxes (or maybe pay NO TAX at all), LEGALLY!

What if we tell you can pay a lower tax or NO TAX (as in ZERO) at all, would you believe us? No this is no scam and it is perfectly legal it is through a scheme called TAX AVOIDANCE. What is tax avoidance and Why is it legal? Tax avoidance is the use by the taxpayer of legally permissible alternative tax rates or methods of assessing taxable property or income in order to avoid or reduce tax liability. CIR vs. Estate of Benigno Toda, G.R. 147188, Sept. 14, 2004 So basically in tax avoidance you are just using the…

Know Your Taxes! Overview of Philippine Taxation(Simplified, well we tried).

Are you a newly registered business/professional/freelancer with the BIR? Were you surprised that you now have to file your own taxes. Didn’t know what taxes needs to be filed, when and how it to file and pay them? Well don’t worry, we have your back. Here’s a list of videos that could help you understand your tax obligations. Income Tax 8% Tax Rate Withholding Tax on Compensation and Expanded Withholding Tax Business Taxes

Can the BIR look into your bank account/s?

One of the frequently asked question that we get is this: Pwede po ba silipin ni BIR yung bank accounts namin? (Can the BIR look into our bank accounts?) -Anonymous Unregistered Business Owner (but will register later on…) The answer to that is a big resounding Yes! But on certain instances only. Let us get into the details. Power of the Commissioner Section 6(F) of the National Internal Revenue Code (NIRC/Tax Code), gives the Commissioner the “Authority of the Commissioner to Inquire into Bank Deposit Accounts and Other Related information held by Financial Institutions.“ Summarily stated the Commissioner is ONLY allowed to…

FIST Act (RA 11523) has been passed into law and we should be happy about it. But why?

The fist as far as we know is how we show our support to the current administration. But now the “fist” takes a new and more welcoming meaning which is Financial Institutions Strategic Transfer Act – Republic Act 11523 (FIST Act) an act sought to help out banks and financial institutions which will in turn help stimulate the economy. But how? Effects of Covid -19 on Financial Institutions To understand how the new FIST Act will benefit you, we must first review how banks and other financial institutions work. Financial institutions which include banks (FIs ) earn from INTEREST (and…

100% Tax Compliant -Part 1

After soul searching, listing down pros and cons you have decided and took action to register your business with the Department of Trade and Industry (DTI) – if you are a sole proprietor, or with the Securities and Exchange Commission (SEC) if you established a partnership/corporation, then after registered it the Bureau of Internal Revenues (BIR) and with the City Hall having jurisdiction over your business. So you happily look at your permits thinking that you are now a responsible entrepreneur. Good for you! However, soon after you are now informed that you have to be tax compliant. But does…

Taxes, How Do I File (and Pay) Thee? -RMC 4-2021

Congratulations! You registered your business with the BIR ! But then moments after you get your Certificate of Registration (BIR Form 2303) , you are then filed with confusion as you are now informed that you are now REQUIRED (yes, IT IS A MUST) to file and if applicable pay your taxes. So how? Well, let us help you on what, how and when to pay taxes. First, what taxes do you need to file and pay? So before you get sleepless nights on figuring out on how to file, it is first important to know what kind of taxes…

FAQs in Business Registration- Part 2-DTI registration: What is in a name?

As the great William Shakespeare once asked “what is in a name” in his play Romeo and Juliet. For Juliet it does not mean a thing to her as long as he loves Romeo. However, in business it really means a lot! When your register your business name with the Department of Trade and Industry (DTI) there are certain rules you need to follow. The Don’ts in Business Names: It is the applicant’s responsibility to ensure that the proposed business name is: not and will not be used for a business that is illegal, offensive, scandalous, or contrary to propriety (Pop’s…

The Founder : Business 101

If you want to rest but can’t get that hustle mentality out of your system why not try watching The Founder (just cancel out the greedy stuff Ray Kroc did) and you might find these few business lessons in between just like we did. (Warning: Spoilers ahead) Be a GAME CHANGER! In the movie, it showed how most of the drive ins restaurants fell short of standards and customer satisfaction because of the long wait and below average customer service. Dic and Mac acknowledged this and went ahead with a differentiated themselves by knowing what the competition lacked and what…

Ano bang bago dito (CREATE BILL)? -Part 2 – Reduced Minimum Corporate Income Tax Rate

So this is part 2 of our CREATE BILL mini series. If you are reading this let me congratulate you for being interested on the fate of your business (or study if you are a student). (Missed the part 1 read it here: Ano bang bago dito part 1) For part two let us discuss another major amendment : the reduction of the Minimum Corporate Income Tax (MCIT). But what is Minimum Corporate Income Tax (MCIT) in the first place? Minimum Corporate Tax is a tax on the corporation’s TOTAL GROSS INCOME which is currently at 2%. Ano! You mean…

FAQs in Business Registration- Part 1-Sole Prop vs. Corporation?.

So you are decided, you will go legit and to save on cost you decide to do it on your own (hmm sure ka baka magsisi ka pero sige). Naturally your first question would be: You yourself must first ask this very important question. Sole proprietorship or Corporation which will you choose? We say that this is the most important question in business registration because your answer to this will greatly affect how you will go through the next steps of registration and of course the tax implications.- To help you with this question we lay out differences between the…

Ano bang bago dito (CREATE BILL)? -Part 1 – Reduced Corporate Income Tax Rates

I know it is still too early to discuss given that the House and Senate might need to reconcile the two versions (Read: How do laws become laws)  however it is not bad to give you an idea of what is in store for us. So here is our short (but extensive) series on CREATE BILL which will tackle the big changes and salient features of the CREATE BILL as per Senate Bill (SB) 1357. Part 1 – Lowered Corporate Income Tax Rates (Sec. 6 amending Sec. 27 (A) of the National Internal Revenue Code (NIRC) of 1997) Our country…

Demystifying Barangay Micro Business Enterprise (BMBE)

You might have heard of it, may even have applied for it but what is it really and how does it work? What is Barangay Micro Business Enterprise (BMBE)? A BMBE is defined as any business enterprise engaged in production, processing, or manufacturing of products, including agro-processing, as well as trading and services, with total assets of not more than P3 million. Such assets shall include those arising from loans but not the land on which the plant and equipment are located. What incentives can you get when you are registered as a BMBE? Income tax exemption from income arising…

Bills, bills, bills…

Judith and her twin sister Jona is waving at you. Kidding aside, business owners or even anyone who handles the household’s finance should be well aware about the bills coming their way. But we should not worry ,the government, service providers, banks and credit card companies made sure that you bills would not pile all on you at the same time. Here, we summarize the extensions on payment made to your monthly dues: Rent: Basis: Department of Trade and Industry Memorandum Circular 20 -12 Extension provided: 30 day grace period for rent due falling within the ECQ period without incurring…

A guide to the “New Normal”

As many of us are counting down the days until the lock down is lifted, let us not forget to take note of the fact that everything wouldn’t be as us they use to be. Businesses that would be allowed to resume should do their part in making sure that guidelines are in place and strictly enforced to make sure that a second wave won’t occur. But how should the guidelines look like? What should be in it? We have enumerated a few but important things to consider in crafting it: Health & Safety is #1 The Department of Trade…

Let us not forget paying our taxes.

Revenue Regulation (R.R.) 11 -2020. Extension on the statutory deadlines and timelines for the filing and submission of any document and payment of taxes pursuant to Section 4 (z) of Republic Act No. 111460 otherwise known as “Bayanihan to Heal As One Act”. As we prepare to go back to what they say the “New NORMAL”, let us not forget to take note of the tax returns that we still have to file and pay (yes, even if you were not able to get any sort of relief). Below are the summarized new deadlines of some of the tax returns…