1 bookkeeping, invoicing and registration requirements presented by: romano e. apura, cpa revenue...

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Bookkeeping, Invoicing and Registration Requirements

Presented by:

ROMANO E. APURA, CPARevenue Officer

Revenue Region 19-Davao City

Check your compliance

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1. On registration w/ the BIR.2. On issuance of authorized ORs/INVOICES 3. On keeping and maintaining of Books of Accounts.4. On withholding & remittance of w/holding taxes, if applicable.5. On filing of required tax returns and payment of taxes due thereon.6. On submission of required information & returns to the BIR.

ON REGISTRATION

REQUIREMENTS

R.A. 8424Section 236 of NIRC

RR 11-2008 dated Aug. 15, 2008

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Process Flow for RegistrationPrimary Stage Second Stage

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Apply for TIN

TIN Application Form

Documentary Requirements

Submit to TSS

Accomplish Registration

Form

Complete?

Issue TIN

Registration Form

Documentary Requirements

Submit to appropriate RDO

Reject Application

Issue COR

Persons who may secure

TIN

Second Stage of Primary Registration• Except for employees and facilities, it is the stage where

the registrants are required to:

1. pay registration fee, if applicable;

2. secure Certificate of Registration;

3. get “Ask for Receipt” notice, if applicable;

4. attend the taxpayer’s initial briefing to be conducted by the BIR

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Who are required to proceed to the second stage of the registration process?

a. Employees

b. Self-employed individuals, professionals, estates

and trusts, their branches or facilities

c. Corporations, partnerships, cooperatives,

associations, their branches or facilities

d. GAIs, GOCCs, LGUs, their branches or facilities

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When to Proceed the Second StageTAXPAYER TIME FRAME

EMPLOYEES Within 10 days from date of employment

Self-Employed Individuals, Professionals, Estates and Trusts, their branches

within thirty (30) working days from the day the corresponding Mayor’s Permit/PTR is issued to the taxpayer

Corporations (Taxable or Non-taxable) before payment of any tax due

Partnerships, Associations, Cooperatives, GAIs and Instrumentalities

before or upon filing of any applicable tax return, statement or declaration

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Where to File Registration Form

• Registration Form shall be filed with the same RDO where TIN was obtained.

• If individual applies for business and principal place of business is under the jurisdiction of an RDO different from the RDO that issued his TIN, said TIN shall be transferred to the new RDO.

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Annual Registration Fee• An annual Registration Fee (RF) in the amount of

P500.00 for every separate or distinct establishment or place of business shall be paid upon registration and every year thereafter on or before January 31 by every person subject to any internal revenue tax.

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Exempt from Payment of Annual Registration Fee

1. Cooperatives duly registered with the CDA;

2. Individuals earning purely compensation

income whether locally or abroad;

3. Overseas workers;

4. GAIs, in the discharge of governmental

functions;

5. Marginal Income Earners;

6. LGUs;

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Annual Registration Fee

7. Tax exempt persons enumerated under

Section 30 of the Code, as amended;

8. Non-stock/non-profit organizations

not engaged in business;

9. Persons subject to tax under one-time

transactions; and

10. Facility/ies where no sales transaction

occur.

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Where to pay the Registration Fee

• To an Authorized Agent Bank (AAB) located with the RDO, or to the Revenue Collection Officer (RCO), or duly authorized Treasurer of the city or municipality where each place of business or branch is registered, subject to the EFPS rules and regulations.

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Rules on Registration of Tax TypeTAX TYPE WHERE TO REGISTER

Income Tax Head Office (HO) Only

VAT HO Only

Percentage Tax HO only or with each branch at the option of the taxpayer

Withholding Tax HO only or with each branch at the option of the taxpayer

Documentary Stamp Tax HO only or with each branch at the option of the taxpayer

Excise Tax HO only or with each branch at the option of the taxpayer

Registration Fee In the Head Office and in all branches/facilities

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UPDATE REGISTRATION DATA

Accomplish Form 1905 and submit to your home RDO for:

• Change of registered address • Change of registered activity• Change of tax types (cancellation or addition)

• Additional personal exemption

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Venue for TIN ApplicationTAXPAYER WHERE TO SECURE TIN

Individual/Non-individual RDO having juridiction of the HO or branch

For Roving Stores, Mobile Store Operators, Privilege Store Owners and the like

RDO having jurisdiction over the place of residence of seller

For Employees place of office of the employer where such employee is expected to report for work

For Employees of Employers under TAMP

employers shall be responsible for securing TIN through the e-TIN/e-Reg facility.

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Venue for TIN ApplicationTAXPAYER WHERE TO SECURE TIN

Employees with Multiple Employers RDO having jurisdiction over his principal/main employer.

Estate residence of the decedent

Donation Residence of the donor

Sale of Real Property RDO having jurisdiction over the real property

Sale of shares of stock address of the seller for shares of stock not traded in the stock exchange. For listed shares, place where the Local stock Exchange is located.

Other Applicants (EO 98) residence of the applicant

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Your Unique Identifier: TIN

• Only one TIN for life

• Multiple TIN is punishable by law.

• Professionals may electronically secure TIN through e-REG system

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Taxpayers are also required to register and pay the corresponding

Registration Fee for each separate or distinct establishment.

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REGISTRATION OF BRANCH

Your Usual Tax Types

• Registration Fee (RF)• Income Tax• Business Tax

–VAT – 12% if gross annual fees exceed 1.5M or if opted to register as VAT Taxpayer

–Percentage tax – 3% on the gross, if gross annual income is below 1.5M

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Your Usual Tax Types

• Withholding Taxes - withholding tax on compensation income paid - expanded withholding tax on income

payments made

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BOOKKEEPING REQUIREMENTS

Sections 232 to 235 of the 1997 Tax Code

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Who are required to keep books of accounts?

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All corporations, companies, partnerships or persons required by law to pay internal revenue taxes.

Books of Accounts to be kept

• Simplified set of books – if quarterly sales, earnings or receipts, or output do not exceed P50,000.

• Audited Financial Statements – if gross quarterly sales, earnings or receipts or output exceeds P150,000.

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Books of Accounts (RR No. V-1)

• Journal (Sales Journal, Purchase Journal, Cash Book);• Ledger;• Subsidiary books;• Electronic Records (RR 9-2009) – if a taxpayer maintains

electronic and hard copy formats, the TP shall make the records available to the Bureau in electronic format upon request of the commissioner or its authorized representative.

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Registration of Manual Books of Accounts (RMC 82-2008)

Registration Procedures:

1.Manual books of accounts previously registered • whose pages are not yet fully exhausted can still be used in

the succeeding years without the need of re-registering or re-stamping

• the portions pertaining to a particular year should be properly labelled or marked by the taxpayer.

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Registration of Manual Books of Accounts (RMC 82-2008) cont...

2. The registration of a new set of manual books of accounts shall only be at the time when the pages of the previously registered books have all been already exhausted.

• Not necessary to register new set of manual books of accounts each and every year.

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Registration of Manual Books of Accounts (RMC 82-2008) cont...

3. Other Deadlines

• Jan. 30 of the ff year (RMO 29-2002) applies only to

computerized books of accounts and not to manual books of accounts

• The “15 days after the end of the calendar year” (RMC 13-82) refers to loose-leaf books of accounts and not to manual books of accounts

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Registration of Manual Books of Accounts (RMC 82-2008) cont...

4. Newly registered taxpayers shall present the Manual Books of Accounts before use to the RDOs where the place of business is located or concerned office under the Large Taxpayer Service for approval and registration.

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Registration of Manual Books of Accounts (RMC 82-2008) cont...

5. Subsidiary manual books of accounts to be used by taxpayers, in addition to the manual books of accounts, shall be registered before use, following the same rules.

6. TSS personnel has no authority to examine whether the previously registered books are complete and/or updated prior to its approval.

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On CAS – (RMO 29-2002)

The requirement of binding and stamping of computerized books of accounts and/or receipts and invoices are no longer necessary, provided that:

1. Soft copy of the CAS in text file format

shall be made available in the ff mode:• In CD-ROM (read only) properly labelled• Electronically archived information

In case the TP has no capability to submit in CD-ROM form, procedures under the manual system shall prevail.

•

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On CAS – (RMO 29-2002)

2. A duly notarized certification in the form of an affidavit ascertaining/attesting the accuracy of the ff shall be submitted to the RDO within 30 days from the close of the taxable year:

• The number of receipts and invoice used during the year; and

• Soft copy in CD-ROM duly stamped “registered” and signed by authorized official or the archived books of accounts.

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On Loose Leaf - (RMC 13-82)

• TP should be required to bind the loose leaf forms within 15 days after the end of the taxable year.

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INVOICING REQUIREMENTS

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Invoicing Requirements

• Issue sequentially Official Receipt (OR) for fees received • Sales Invoice for sale of goods (medicines).

• Each OR issued shall indicate the name and address of the client, date of transaction, nature of service rendered and the amount.

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Invoicing Requirements

• The OR shall be accomplished at least in duplicate

• The duplicate retained & preserved in place of business for 3 years from close of taxable year.

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Sample of Commercial Invoice – A Non-VAT Official Receipt

SAMPLE ONLY

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Proper Invoicing and Receipting of Output Tax

Revenue Regulations 18-2011

• Reiterates Sec. 237 of the Tax Code that VAT-registered taxpayers should separately bill the VAT.

• The amount shall be shown as a separate item in the invoice or receipt

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Proper Invoicing and Receipting of Output Tax

Ex: If the amount charged is P560.00, it shall be presented in the following manner:

Sales (P560.00/112%) P 500.00

Add12% VAT (12% of P500.00) 60.00

Total Amount charged P 560.00

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Proper Invoicing and Receipting of Output Tax

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SAMPLE ONLY

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Proper Invoicing and Receipting of Output Tax

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Particulars

Service Fee P1,124.10

12% VAT 134.90

Total P1,259.00

SAMPLE ONLY

VAT should be billed separately

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Proper Invoicing and Receipting of Output Tax

Penalty

• for each act or omission, be punished by a fine of not less than P1,000.00 but not more than P50,000.00 and

• suffer imprisonment of not less than two (2) years but not more than four (4) years.

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The importance of Asking for Receipts

• To support input tax claims• Will facilitate audit trail

• To ascertain that sales transactions are properly recorded

• Corresponding taxes are paid

• To support business purchases/expenses

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INVOICING REQUIREMENTS (Sec. 237)

All persons subject to internal revenue tax shall:

•For each sale of P25 or more;• Issue duly registered receipts or sales or commercial invoices;

•Prepared at least in duplicate.

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Invoicing Requirements (Sec. 237)

Required information:•Date of transaction•Quantity•Unit Cost•Description of merchandise or nature of the service

•TIN of purchaser if VAT-registered

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Invoicing Requirements (Sec. 237)

Required information:Name, business style and address of the purchaser shall be indicated in the ff cases –

• Amount exceeds P100; • Seller and buyer are VAT-subject persons; • Receipt covers rentals, commission, compensation or fees.

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Invoicing Requirements (Sec. 237)

Disposition of the receipts/invoices•Original -> purchaser•Duplicate -> retained by issuer

Copies of receipts/invoices should be preserved in the place of business for a period of 3 years, if engaged in business.

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Invoicing Requirements (Sec. 237)

(continued)

BIR Printed Receipts (RMO 13-2003)

All registered taxpayers who are required by law under Section 237 of the Tax Code to issue duly registered receipts or sales and/or commercial invoices may, at their option use the BPR provided these taxpayers have -

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Invoicing Requirements (Sec. 237) BIR Printed Receipts (BPR)

Business transactions that will require the use of not more than one booklet of 50 pages in one taxable period (of no less than 12 months).

However, the use of BPR is mandatory for taxpayers who were found during the TCVD to have committed for the first time any of the following violations:

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Invoicing Requirements (Sec. 237)

BIR Printed Receipts

1. Failure to register with BIR under Sec. 236 of the Tax Code but has commenced business and failure to issue duly registered receipts or invoices;

2. Registered with BIR but without required receipts or invoices;

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Invoicing Requirements (Sec. 237)

BIR Printed Receipts

3. Possession of any of the following:

a. Unregistered and/or fake receipts/

invoices;

b. Multiple or double sets of receipts/

invoices;

c. Unregistered cash register

machines, POS or similar devices.

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Printing of Receipts (Sec. 238)

Information required:1. Serial number (separate series for

HO and branch2. Name3. Business style4. TIN and Branch Code (if applicable)5. Business Address (exact) of user

(HO or branch)

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Printing of Receipts (RMO 28-2002))

Centralized issuance of ATPs – At the RDO of the HO Separate application and permit for

each establishment to be filed at RDO of the HO

Signed by official of the HO

Register the receipts with RDO of the user (HO or branch).

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Printing of Receipts (RMO 28-2002))

Users of registered Computerized Accounting Systems (CAS) – are also be required to secure ATP for manual receipts and invoices to be issued in case of system unavailability or if the CAS does not generate pre-numbered receipts/invoices.

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BOOKKEEPING REQUIREMENTS

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BOOKKEEPING REQUIREMENTS

• Cash or accrual

• Preserved within the prescriptive period of 3yrs

• Gross receipts exceeding P150,000 in any given quarter must be audited by a CPA

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BOOKKEEPING REQUIREMENTS

• Transactions for the day must be entered in books on or before 12nn the following day. Balances transferred to Ledger day following end of month

• It’s not required to register new set of books every year; only before the pages of current book is almost used up.

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Original Certificate of Registration, Registration Fee and the Ask for Receipt Notice must be conspicuously displayed in the physician’s place of business and/or clinic

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Tax Compliance Verification Drive (Tax mapping)

Posting Requirement

Display “Ask For Receipt Poster” which shall be issued upon release of COR

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Posting Requirement:

Display Certificate of Registration (COR) at the establishment (BIR Form 1556)

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Posting Requirement (RR 4-2000)

At the place of businessIn an area conspicuous to the publicAt all times

Penalty: P1,000 and/or imprisonment of not more than 6 months.

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VIOLATIONS CHECKLIST

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On Registration Requirements

Failure to Register

If located in the

Cities P20,000

1st Class Municipality

10,000

2nd Class Municipality

5,000

3rd Class Municipality

2,000

Penalties provided are inclusive of all other violations

Failure to Pay Annual Registration Fee P1,000

Failure to Display Annual Registration Fee

No Original Certificate of Registration Displayed P1,000

Failure to display the poster “Ask for Receipt” P1,000

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VIOLATIONS CHECKLIST

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On Invoicing Requirements 1st Offense 2nd Offense

Failure to issue receipts/invoices P10,000 P20,000

Refusal to issue receipts/invoices 25,000 50,000

Duplicate Copy of the receipts/invoices is blank but the accomplished original is detached

20,000 50,000

Use of unregistered receipts/invoices 20,000 50,000

Incomplete information in the receipts/invoices 5,000 10,000

If the information missing is the correct amount of the transaction

20,000 50,000

Possession or use of multiple or double receipts or invoices

Not qualified for compromise

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VIOLATIONS CHECKLIST

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ExceedsBut Does Not

Exceed Compromise

P P 10,000 P 20010,000 20,000 400 20,000 30,000 600 30,000 50,000 1,000 50,000 75,000 1,600 75,000 100,000 2,000

100,000 250,000 3,000 250,000 500,000 5,000 500,000 1,000,000 7,500

1,000,000 5,000,000 10,000 5,000,000 10,000,000 15,000

10,000,000 20,000,000 20,000 20,000,000 50,000,000 30,000 50,000,000 x x x 50,000

If the gross annual sales, earnings or receipts

Failure to register Books of Accounts/Cash Register Machine's Sales books

Failure to keep Books of Accounts at the place of business

Failure to make entries in the registered Books of Accounts

On Bookkeeping Requirements

Thank you!

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