Attention Corporation: Risk of paying not less than Php10,000.00 penalty on 1702Q

1702QATTENTION CORPORATION: There is a potentially expensive sting in the tail for pay and file taxpayers who have not yet paid & filed their 2014 second quarter corporate income tax (1702Q). Second quarter covers April, May & June 2014 and the deadline for filing is on the 28th of August or on or before 60 days following the close of each of the quarters.  Anyhow, for corporate taxpayers, the 2014 income tax return will trigger a penalty not less than Php10,000, if not filed. Therefore, it is important, however, to note that the penalty is calculated on your income tax liability, and that this penalty is in addition to the tax liability. Oh yes! aside from the tax payable you will be charged for additional penalty.  You don’t want that do you?  Well of course, the BIR issued a table of compromise penalty depending on the amount of tax involved.   But that is not he point.  Because additional penalties may also apply for non-compliance with filing obligations and worst you will be monitored already.

Thus, if you want to avoid any penalty then make sure you have filed and paid your 1702Q ON OR BEFORE THE DEADLINE.

 

Advertisements

CORPORATION : BOARD OF DIRECTORS/TRUSTEES/OFFICERS

Corporate Code of the Philippines [Sec. 23-35]

TITLE III : BOARD OF DIRECTORS/TRUSTEES/OFFICERS

Sec. 23. The board of directors or trustees. – Unless otherwise provided in this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees to be elected from among the holders of stocks, or where there is no stock, from among the members of the corporation, who shall hold office for one (1) year until their successors are elected and qualified.

Every director must own at least one (1) share of the capital stock of the corporation of which he is a director, which share shall stand in his name on the books of the corporation. Any director who ceases to be the owner of at least one (1) share of the capital stock of the corporation of which he is a director shall thereby cease to be a director. Trustees of non-stock corporations must be members thereof. a majority of the directors or trustees of all corporations organized under this Code must be residents of the Philippines.

How to register a NON-Stock, NON-Profit CORPORATION with the Philippines SEC

This blog is having a lot of queries on how to register a non-stock and non-profit corporation. Thus, I thought that it’s about time to write one for all the readers and by passer out there. Anyhow, I tried to run a query via google search engine, and some relevant sites came up with the same answers. Next, I checked out SEC and to my surprise the procedures still are the same. So, for the benefits of those who are surfing, reading, visiting and passing by my blog, here are the steps to be followed:

1. Verify and reserve the proposed corporate name. You could do this the hard way, at the SEC Verification Unit, located at the SEC Building, EDSA, Greenhills, Mandaluyong City (right across the Philippine Overseas Employment Administration [POEA] and the EDSA Shrine). If you want to make your life a bit easier, you could do the verification and registration online, through the SEC-iRegister, a 24-7 portal.  After paying the reservation fee, you will get a Name Verification Slip, which is submitted together with the other requirements.

2. Prepare the Articles of Incorporation and By-laws. Blank forms are also available from the Company Registration and Monitoring Department (CRMD). The drafting of the Articles of Incorporation and the By-laws, as well as the other requirements, could also be done by your lawyer.

HOWEVER, in lieu of the authorized capital stock requiring 25% subscriptions of the authorized capital stocks and the attestation in the Treasurer’s affidavit that at least 25% of the subscribed stocks had been paid, for non-stock/non-profit corporation, it only requires the corporation to state the amount of capital or money contributed or donated by specified persons.

So there…

Ah, plus the names, nationalities, and residences of the contributors or donors as well as the respective amounts given by each.  And remember it must be on an itemized presentation.  Take note also, and this is a major major requirement, the majority of members should be a resident of the Philippines.  With this provision, a foreigner can put up 100% foreign owned non-stock, non-profit corporation. Why, because the “code” only requires that the majority of its members should have Philippine residency.

3. Last step is the submission of a Bank Certificate of Paid In Capital or Working Capital to Philippine Securities and Exchange Commission.

ANYHOW, for Foundation —

(a) a notarized Certificate of Bank Deposit of the contribution of not less than P1,000,000.00 ; and

(b) a statement of willingness to allow the Commission to conduct an audit.

RR 15 of 2010

Last January 21st, I posted a topic about Revenue Regualtions number 15 of 2010 (BIR RR 15-2010). Now, I would like to share a copy of the regulation for your reference.

RR-15 of 2010 is all about an additional procedure and/or documentary requirements in submitting financial statements to the BIR.  For example, in addition to disclosure mandated by the PFRS, the notes to financial statements shall now include information on taxes, duties and license fees paid or accrued during the taxable year.

So, therefore, aside from the tax returns that we are normally doing, per this regulation, the notes to FS should include the amount of VAT output tax declared and input tax claimed during the year.  The landed cost of imports and the amount of custom duties, including tariff fees paid or accrued. The amount of excise taxes paid locally or otherwise if its applicable to your organization. Documentary Stamp Tax (DST) on loan instruments and/or other transactions subject to DST.  And all other taxes, including real estate tax, withholding tax, final withholding tax, deficiency tax assessments, protested or not and tax cases plus the amount involved under preliminary investigation, litigation and all those in courts already.

Wow!  If you analyze it, this is really a good move for the BIR.  Why, because it’s all in there already, a food on the table, no more worries. If you are an examiner all have to do is eat, este, I mean read and analyse the financial statements’.  Well, perhaps this move is also a patch for the minimal number of examiners.  Truly, the ratio of BIR manpower to the number of companies be it corporation or otherwise is quite a stretch.  I hope the SEC will come up with a regulation too?  Anyhow, this is an additional work for all practicing CPAs but think of it as an assistance na lang to the BIR.  Okay?

You can read the regulations here (RR 15-2010). Save it!