Philippines Accounting and Tax Services
Many international clients engage Tetra Consultants for Philippines accounting and tax services after Philippines company registration. Tetra Consultants will timely complete your firm’s financial statements, corporate tax returns and manage auditors on your behalf and without the need to travel. It is important to meet the deadlines stipulated by the Bureau of Internal Revenue (BIR). Failure to comply will result in late penalties and fines. Contact us now for a free consultation. Our team of experts will revert within the next 24 hours.
By outsourcing accounting and tax obligations to Tetra Consultants, you can reduce overhead costs while being ensured of timely reporting and filings. Our accounting team will provide you with an explanation of all the required deadlines and expectations before the start of the engagement.
Thereafter, our team will prepare the required fillings in advance to ensure we meet all stipulated deadlines. Tetra Consultants will send you a weekly or bi-weekly update, ensuring that you are aware of upcoming deadlines.
Annual Reporting Requirements
- In accordance with the Philippine Bureau of Internal Revenue, it is mandatory for business owners partaking in business operations in the Philippines to file annual income tax returns before the 15th day of the fourth month following the close of the taxable fiscal year.
- Apart from an annual filing requirement, domestic or foreign corporate entities are required to file the company’s cumulative income tax returns on a quarterly basis. The quarterly filing must be completed within 60 days from the closing date of each of the first three-quarters of its taxable period.
- Corporate entities can file their annual income tax returns electronically under the Bureau of Internal Revenue’s Electronic Filing and Payment System (eFPS). Alternatively, corporate taxpayers excluded under the eFPS can file tax returns through Electronic BIR Forms (eBIRForms).
- Corporations who failed to meet the stipulated deadline will be subjected to a late filing penalty on the tax due. A penalty of PHP1,000 per return and civil penalties amounting to an additional 25% on tax payable will be applicable for corporate taxpayers who failed to adhere to filing requirements.
- Taxpayers who were unable to resolve outstanding tax payments in due time will be subjected to penalties as well depending on the degree of non-compliance.
Philippines Corporate Income Tax
- Resident companies in the Philippines are generally subjected to a Corporate Income Tax Rate of 30%. Non-stock and non-profit organisations are exempted from paying corporate income taxes. Furthermore, foreign corporations engaging in business operations in the Philippines through a branch office are taxed in the same manner as domestic corporate entities.
- Furthermore, as part of the government’s incentive to attract foreign direct investments, business entities under the Philippines’ Free Trade Zones are exempted from Corporate Income Tax duties for up to 6 years, subjected to approval.
- Thereafter, beyond the duration of the granted tax holiday, business entities are subjected to a Special Tax of 5% on Gross Income and granted exemption from all national and local taxes.
Audit requirements
- According to the Bureau of Internal Revenue (BIR), a mandatory annual statutory audit is necessary for corporate entities with paid-up capital exceeding PHP50,000, inclusive of branch offices of foreign corporations. Additionally, the annual statutory audit applies to companies with gross annual sales and earnings exceeding PHP3,000,000.
Philippines Value Added Tax (VAT)
- Philippines’ Value Added Tax has a standard rate of 12%. It is applicable to sales of services and imports. VAT is also applicable to the exchange of goods and both tangible and intangible properties. Furthermore, transactions in connection with exports are zero-rated and exempted from Value Added Tax.
Philippines Withholding tax
- According to the Philippines’ Tax rules and regulations, registered business entities are obligated to withhold a percentage of certain payments made to non-residents. The withholding tax compliance falls under the responsibility of the Philippine’s business entity.
- Generally, dividends paid by a Philippines corporation to a non-resident shareholder are subjected to a 30% withholding tax rate, unless otherwise stated under an applicable tax agreement. The withholding tax does not apply to dividends paid to resident shareholders.
- Royalties paid by a Philippines corporation to a non-resident are subjected to a 30% withholding tax rate. Furthermore, a 20% withholding tax rate is applicable when royalties are paid to domestic or resident foreign corporations.
- Interest paid by a resident Philippines company to a non-resident is subjected to a 20% withholding tax rate unless otherwise stated under an applicable tax agreement. The submission of a Certificate of Residence form to the Bureau of Internal Revenue (BIR) is necessary for tax relief.
Contact us now to find out more about Tetra Consultants’ Philippines accounting and tax services. Our team of experts will revert within the next 24 hours.
