A Complete Checklist of Year-End Tax Compliance for Corporations in the Philippines
Every end of the year, organizations must file and submit their tax compliance requirements to the Bureau of Internal Revenue (BIR) to ensure their business is allowed to operate the next year.
It is imperative for entrepreneurs and accountants to be aware of such compliance requirements as the process can be exhaustive. To help you prepare, we provide a checklist of the necessary documents you need to secure to comply with year-end tax compliance in the Philippines.
#1: Submission of Books of Accounts
There are three types of books of accounts you can register with the BIR, which could depend on factors such as company size and financial capacity.
Depending on your company’s registered books of account, your annual compliance to be submitted to BIR is as follows:
- Manual Books of Accounts. Under Revenue Memorandum Circular (RMC) No. 82-2008, taxpayers who are maintaining manual books of account must register new books when the pages of the previously registered books have already been exhausted. Although manual books are not required to be submitted annually, the BIR may need you to present them upon audit or tax mapping.
- Loose-Leaf Books of Accounts. Businesses maintaining loose-leaf books must submit the bounded books of accounts for the taxable year on or before January 15. An affidavit must also be submitted confirming the type of books, number of pages, and volume number of books submitted.
- Computerized Books of Accounts. Taxpayers must submit their computerized books in CD-R, DVD-R, or other optical media for the taxable year on or before January 30.
Sorting out your books of accounts in advance can help ensure that you will not encounter any tax-related problems during the holidays.
#2: Submission of BIR Form 1604CF and BIR Form 1604E
You must file the following information to the BIR in the form of an alphabetical list, namely:
- BIR Form 1604CF or the Annual Information Return of Income Taxes Withheld on Compensation. This form consists of the summary of withholding tax on compensation (BIR Form 1601C) and the summary list of employees, existing and resigned, during the taxable year. The form must be submitted on or before January 31.
- BIR Form 1604E or the Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax. This consists of the summary of the withholding tax expanded (BIR 1601E), paid, and filed, and the summary list of income payees during the taxable year. This form must be submitted on or before March 1.
#3: Submission of BIR Form 2316
The BIR Form 2316 is a return that details an employee’s income earned, with the corresponding tax withheld and remitted to BIR. Such is due for distribution and filing of the current and existing employee on or before January 31. Additionally, employers are required to submit copies of such documents on or before February 28.
#4: Annual Income Tax Returns and Audited Financial Statements
Companies and taxpayers engaged in business are required to submit a copy of their Annual Income Tax Return (BIR Form 1701 or 1702) and Audited Financial Statements (AFS) to BIR and the Securities and Exchange Commission (SEC) on or before April 15.
#5: Inventory List and Other Reportorial Requirements
RMC No. 57-2015 requires taxpayers to submit a list of inventory such as finished goods, work in progress, raw materials, supplies, and stock-in-trade. You must also include other tangible asset-rich balance sheets such as accounts receivable and submit them on or before January 30.
#6: Summary List of Tenants and Other Requirements
According to Revenue Regulation (RR) No. 12-2011, taxpayers engaging in the leasing or renting of property for commercial activities must submit the following:
- The layout of the leased property
- A certified true copy of lease agreement per tenant
- Latest lessee information sheet (as of December 31)
Due dates may vary depending on which semester the list belongs to. If the list belongs to the second semester (July-December of the previous year), such must be filed by January 31. If the list belongs to the first semester (January-June of the current year), such must be filed by July 31.
#7: Summary List of Regular Suppliers
Under RR No. 14-2008, taxpayers determined by the BIR to belong in the Top 5,000 Individual or Top 20,000 Private Corporations must submit a summary list of its regular suppliers of goods and services to the Large Taxpayers Assistance Division or Large Taxpayer District Office. The list must be made on a semestral basis and submitted on January 31 (for the second semester) and July 31 (for the first semester).
Secure Your Year-End Tax Compliance On Time
Sorting out your taxes at the end of the year requires a large amount of effort. Having a checklist can help you avoid overlooking several requirements and deadlines, keeping your company safe from any unwanted penalties as the year ends.
If the process becomes too confusing, you can always reach out to accounting, bookkeeping, and tax services providers to guide you through your company’s year-end tax compliance with BIR.
Submit Your Year-End Tax Compliance With Ease
Sorting out your taxes can be an exhausting process. With our large pool of experienced accountants, AHC can help secure your year-end compliance requirements on time and without any hassle.