TRAIN: Tax Tables & Income Tax Rates

Posted on by bongcorpuz

Please take note that there are two sets of income tax tables under TRAIN:

(1) Income Tax Tables to be implemented for the years 2018 to 2022; and

(2) Income Tax Tables which will be applicable from the year 2023 on wards.

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Noticeably, the minimum wage earners (MWEs) and employees earning Php20,000.00 (and below) per month are exempted from Income Tax or Compensation Tax under the New TRAIN Law of 2018.

It is also crystal clear in the TRAIN Law that high income earners falls on the high tax range rates as shown in the table above.

However, the tax rates will be reduced beginning year 2023 and on wards, if not superseded by a new law before its implementation,  as shown in the table below.

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Do I need to enroll in the BIR’s eFPS?

Posted on by bongcorpuz

BPI_C0057_BPI EOL Infographics-23 Transfer to Enrolled Accounts_BIR eFPS or Electronic Filing and Payment System is a facility provided by the Bureau of Internal Revenue for a fast, convenient and paperless tax filing and payment using web browser and internet connection.

But who are required to enroll in the eFPS facility? Not all are required, only those the are listed below are the mandatory to enroll in the eFPS.

Large Taxpayers (RR#2-2002);

  • Top 10,000 Corporations (RR#5-2004);
  • Top 20,000 Corporations (RR#3-2009);
  • Insurance Companies and Stockbrokers (RMC#71-2004);
  • Corporations with paid-up capital stock of 10 Million and above (RR# 10-2007);
  • Corporations with complete computerized system (RR#10-2007);
  • All Government Bidders pursuant to EO 398 as implemented by (RR# 3-2005);
  • Top 5,000 Individual Taxpayer (RMC# 69-2009);
  • Philippine Economic Zone Authority (PEZA) (RR 1-2010);
  • Licensed Local contractors  (RR 10-2012);
  • National Government Agencies  mandatorily required to use the Electronic Tax Remittance Advice (RR 1-2013);
  • Taxpayer Account Management Program (TAMP) and accredited importers, including prospective importers required to secure the Importer Clearance Certificates (ICCs) and Customs Broker Clearance Certificates (BCCs) (RR 10-2014); and
  • Those required to secure the BIR-ICC and BIR-BCC (RMO 10-2014)

However, if you are not one of those identified but have the intention of using eFPS, you can submit a Letter of Intent addressed to the Revenue District Office (RDO) where you are registered, for proper evaluation and approval.  You can only enroll and eventually log on to the eFPS website upon approval of your application. Please coordinate with the Taxpayer Service Section (TSS) of your RDO.

Here are the requisites for the availment of the eFPS system:

  • Taxpayer Identification Number (TIN) should be registered in our BIR Integrated Tax System;
  • Certification authorizing any of the two (2) officers designated to file the return under Section 52 (A) of the Tax Code (President or other principal officer, and Treasurer or Assistant Treasurer of the Corporation) who shall enroll for the system usage;
  • Enrollment to eFPS;
  • Enrollment to eFPS Authorized Agent Bank (AAB);

Here are the steps in enrolling to EFPS:

Step 1:  Access BIR website at www.bir.gov.ph, using your internet browser.

Step 2: Click on “eFPS” icon to go the the eFPS home page.

Step 3: From the eFPS Login page, click on “Enroll to eFPS” link.

Step 4: The eFPS enrollment form appears. Complete the required fields on the Enrollment Form page. Then, click on the “Submit” button.

Afterwards, the system will inform you that your enrollment has been successfully received. Then you have to wait for an e-mail message from BIR informing you of the status of your enrollment – whether approved or disapproved.  Once your account has been activated, you are ready to e-file and e-pay, and perform all the functions within eFPS.

It is important, however, for you to remember your username and password, as well as the answer to the challenge question.  Keep the answer to yourself.  Do not make it easy to guess, nor write it down.

HAVE YOU LOST YOUR BIR CERTIFICATE OF REGISTRATION?

Posted on by bongcorpuz

lostDid you lose your original BIR form 2303 or the Certificate of Registration (COR)? That you already exerted effort but you can’t find it.   Or your company’s BIR 2303 was caught by fire, flood or natural disaster?  Well, don’t worry, you can always replace the BIR Form 2303 or the BIR Certificate of Registration (COR) by doing the following:

  1. Get a copy of BIR form 1905 (Application for Registration Information Update) and fill out properly.
  2. Prepare a notarized Affidavit (e.g. Affidavit of Loss, if lost).  Much better if you have a photocopy of the BIR Form 2303.  Much much way better if you have the old original certificate for replacement.
  3. Then go to your Revenue District Office (RDO) where your business is registered and submit the accomplished BIR Form 1905 together with the required attachment/s. Please take note that the BIR is already implementing the queuing system.  Thus, get a number and check window / table number for the submission of your application.
  4. The BIR RDO personnel who is assigned for the receiving will advise you to pay the necessary certification fee and documentary stamp tax. This is the time to get and accomplish copy of BIR Form 0605 (Payment Form).
  5. After which, you will be advised to pay the required amount to the any BIR accredited bank/s and the date when the new Certificate of Registration will be released.
  6. Bring the proof of payment or submit before the issuance of the new Certificate of Registration.  But for some RDO, the proof of payment is required prior to accepting the BIR 1905 and Affidavit.  Either way, you should get a receiving copy of your application and the specific date of release of your new BIR Form 2303.

There. Easy.

De Minimis Benefits Values

Posted on by bongcorpuz

deminimis 2De Minimis Benefits are tax exempt.  These benefits were outlined and defined by the Bureau of Internal Revenue (BIR) in the issuance of Revenue Regulation No. 3-98 and several amendments since its adoption such as RR No 8-2000, RR No. 15-2011, RR No. 8-2012, RR No. 1-2015 and the latest issuance as of this writing is RR No. 3-2015.

There are several sites discussing the topic and even the BIR per se. But how much really is the maximum amount of the benefits if we convert these into peso amount  on a monthly or yearly basis?

The table below will give you a guide on the peso amount assuming a Minimum Wage Earner located in NCR or a daily wage of P454.00.deminimis

But then gain in the application of de minimis benefits, its important to note the stated limits.  Further, it is also important to consider policies created by the company such as (1) Sick & Vacation Leave (SLVL) and  (2) Health policy covered by an HMO.  Lastly, it is important as well to finally consider if a company is under a CBA agreement.

Bottom line, De Minimis Benefits were created as employees privileges and these are relatively small in value and non-taxable.

Business Retirement

Posted on by bongcorpuz

Small-Business-retirementPlanning to retire your business?  Well, I know its not just as easy as one, two, three.  Yes, it seems like retiring your  business is somewhat require a great deal of effort just like the time you started to open it. But, is it complex and difficult? Nope, and you can do it yourself, in fact, if you  are diligent enough preparing your documentation and the process.

Anyhow, the first step is to apply retirement via your Local Government Unit (City Hall / Municipal Hall) under the Office of City Treasurer.  Here are the requirements for your easy reference.

  1. Duly accomplished retirement application form.  You can secure this from the Office of the City Treasurer Examination Division.  The form must be originally signed by the owner/President or Vice President with Location Map.
  2. Original Tax Bill and Official Receipts  (3 years).
  3. Original Business Permit (latest)
  4. Original Affidavit of Closure with exact effectivity date of closure for Single Proprietorship.  Original Partnership Dissolution with exact effectivity date of closure original signed by all Partners for Partnership.  And for Corporation, original Secretary’s Cerfiticate or Board Resolution on closure of business with exact effectivity date of closure.
  5. Valid ID
  6. Original Barangay Certificatewith exact effectivity date of closure.
  7. BIR Certificate of Registration (Original to be presented & photocopy to be submitted)
  8. Original Certified Breakdown of Sales.
  9. Proof of business payment (Original to be presented & photocopy to be submitted).
  10. Latest Income Tax Return (ITR) with Audited Financial Statements (AFS) on or before closure from the last payment of business operations (Original to be presented & photocopy to be submitted).
  11. VAT / Percentage Tax Returns (Original to be presented & photocopy to be submitted).
  12. Books of Accounts (to be presented upon evaluation /actual inspection and examination).

So there, the complete requirements.