It’s 2023! A new year has come. Do you run a business? If you do, then you are aware that a new year comes with many compliance requirements. This isn’t only for large corporations, but even micro, small, and medium enterprises or MSMEs have to abide by government mandates.
If you own a business that you just registered, this may be something new to you. Besides the regular monthly and quarterly requirements, there are other requirements you need to comply with yearly. This article will provide you with a rough checklist of the annual requirements you must comply with.
Register the MSME
According to the most recent directives, all businesses in the Philippines regardless of size must register with the BIR. The first step is to register with the Department of Trade and Industry (for sole proprietorships) or the Securities and Exchange Commission (for partnerships and larger corporations). If you already have existing registrations, you have to renew them this New Year.
Renew your LGU Registration
Pay the necessary fees to renew your local government unit registration on or before the 20th of January at the Barangay and City Hall. Depending on the nature of your business and the LGU requirements, you must secure necessary permits before being issued a Barangay Clearance and Mayor’s Permit. Examples of these requirements are sanitary permits, fire permits, local business tax, barangay clearance, zoning clearance, etc.
Submit your Books of Accounts
For loose-leaf books, you must submit printed books on or before January 17. For computerized books, you should submit printed books on or before January 31. For the manual books, you must submit only when you need new books. Your books of accounts must be submitted at the Revenue District Office.
Pay the BIR Registration Fee
The BIR registration fee (P500) is an annual fee you need to pay to the BIR on or before the 31st of January. Tax services in Manila state that you can go to the RDO or file through the eBIR or through the e-filing and payment system or an accredited bank and online wallet.
Submit your annual Income Tax Return and Annual Financial Statements to BIR
There are businesses that have accounting periods that end on December 31. Those businesses need to submit their annual income tax return and their annual financial statements on or before the 15th of April. You can file your income tax return through the eBIR or the eFPS. You may pay virtually through banks, paymaya, gcash, etc. For the annual financial statement, submit it through eAFS. Noteworthy, MSMEs do not need to submit audited financial statements checked by a certified public accountant.
Submit the AFS to the SEC
If your medium scale company is registered with the SEC, the Annual Financial Statement and BIR documents should also be sent to them. In general, businesses who are registered sole proprietors are exempt from this.
Submit your Inventory List (for trading and manufacturing businesses)
You must submit your inventory list on or before January 31 at the BIR RDO or Revenue District Office with a notary fee of 100 PHP to 300 PHP. Accounting services in the Philippines say this only applies to businesses that trade and manufacture goods and have stock-in-trade, raw material, in-process, and other goods in their inventory. Make sure that the amount on the list can be readily reconciled with the amount on your annual income tax return and financial statements.
Distribute the BIR Form 2316 to your Employees
Prepare and provide your employees with the BIR Form 2316 or the employee withholding tax statement. Regardless of size, businesses in the country must comply with this as long as they have an employee. Give it to your employees on or before January 31 to have them receive and sign it. Tax and audit services in the Philippines say you must submit this form on or before February 28 at the Revenue District Order with a notary fee of around 100 PHP to 300 PHP.
File the BIR Form 1604C and the BIR Form 1604E
You must file the BIR Form 1604C on or before January 31 and the BIR Form 1604E on or before March 1. The former is the annual information return for income taxes withheld from compensation. It should be submitted with the employee AlphaList or other people who received income payments from you throughout the year. The latter is the Creditable Income Taxes Withheld (Expanded) and Income Payments Exempt from Withholding Tax Annual Information Return.
If you have already accomplished all the annual requirements, the following checklist may help you be more ready to take on and face the new year. Aside from the annual compliance requirements, it’s also important to take note of the following:
- Go Digital
-Create and set up a social media account (Facebook and/or Instagram)
-Set up an online store
- Take good care of your employees
- Maintain good customer service
- Keep your cash flow positive
- Build a network
Consider the checklists we have provided for you and be prepared for what’s to come this new year. If you need assistance, do not hesitate to get in touch with our accounting services in Pasig, Metro Manila.