December is considered to be the wonderful time of the year. It’s the time when we decorate our houses with mistletoe, hang some Christmas lights, and set up our Christmas tree. We get to celebrate and have Christmas parties with our friends and co-workers. The atmosphere is festive. Not to mention we also receive our Christmas bonuses and/or 13th-month pay.  Indeed, it’s the season to be jolly.

However, not to spoil the fun, we must keep in mind that the end of the year is not all about merry-making. We should not forget the year-end responsibilities that we should perform in compliance with the different government regulations.

 

Tax compliance requirements

Business owners must observe the tax compliance requirements for them to continue their operation the following year. To help organizations with this annual activity, we provide the following checklist of BIR forms and taxes that they should pay.

1. Renewal of Registration Fee

The annual business registration is processed on or before January 31, 2022. Business owners are required to pay P500.00 for business registration using BIR Form 0605.

 

2. Submission of Books of Accounts

If you are using loose leaf or computerized (uses an accounting software) books of accounts, the deadline for submitting the hard copies of your financial documents to BIR is January 15 and January 30, 2022, respectively.

Users of manual books of accounts are exempted from this process. They will register a new set of books when their existing ones are fully used up.

 

3. Submission of Inventory List

Taxpayers who are engaged in trading or buying and selling of goods, restaurants that maintain inventories and raw materials for supplies, construction companies, real estate businesses that sell houses and lots, and other similar businesses are required to prepare and submit the annual Inventory List on or before January 30, 2022.

You may refer to RMC 57-2015 for the guidelines and format of the report.

 

4. Submission of the Leasee Information Sheet (LIS)

Taxpayers engaged in real property rental are required to submit the LIS. Submission of the form is on or before January 31, 2022, in compliance with the provisions of RR 12-2011.

 

5. Submission of BIR Form 1604C (Annual Information Return of Income Taxes Withheld on Compensation), BIR Form 1604F (Annual Information Return of Income Tax Payment Subjected to Final Withholding Tax), and BIR Form 1604E (Annual Information Return of Income Taxes Withheld) on or before January 31, 2022.

 

Last year, BIR extended the deadline of filing and submission of BIR Form 1604C and BIR Form 1604F to February 28, 2021 (RMO 17-2021).

 

6. Submission and distribution of BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld for Compensation Payment With or Without Tax Withheld)

 

Employers must accomplish BIR Form 2316, which summarizes their employees’ total compensation and taxes withheld for 2021. The accomplished form should be issued to the employees and submitted to BIR on or before January 31, 2022.

 

Employees not qualified for substituted filing should attach the form to their Annual Income Tax Return.

 

7. Payment of Year-end taxes

 

7.1. Percentage Tax

Non-VAT taxpayers should pay their tax dues and file the BIR Form 2551Q for the 4th quarter of 2021, not later than January 25, 2022. Moreover, VAT taxpayers are required to remit their taxes using BIR Form 2550Q.

 

7.2. Withholding Tax

There are three types of withholding tax – compensation, expanded, and final taxes. Please refer to the table for the deadline of payment and filing of tax returns.

 

Type of Withholding TaxBIR FormTaxable Month/QuarterDeadline of Payment and Filing
Compensation Income1601CDec 2021Jan 15, 2022
Expanded Withholding Tax1601EQ4th Quarter of 2021January 31, 2022

 

*Last year, BIR extended the filing and submission to Feb 28, 2021

(RMC 17-2021)

Final Income1601FQ4th Quarter of 2021January 31, 2022

 

*Last year, BIR extended the filing and submission to Feb 28, 2021

(RMC 17-2021)

 

 

Payment of Annual Income Tax

 

Nature of Income/TaxpayerBIR FormTaxable YearDeadline of Payment and Filing
Compensation IncomeBIR 17002021April 15, 2022
Self-employed or mixed-incomeBIR 17012021April 15, 2022
Non-individual taxpayersBIR 17022021April 15, 2022

 

We believe that we can enjoy the celebrations more when we know that our statutory obligations are properly done and accomplished. Thus, let’s end the year right and face the new year bright and positive.

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Do you need help with your business renewal? DJKA Business Services can help you. Just email us at info@djkaaccounting.com.

About Divina Joy Ayungo-Martinez, CPA

Divina Joy Ayungo-Martinez, has 10 years of accumulated working experience with a vigorous background in general accounting, financial statements and management reports preparation. In 2014, she started her service-based business to help various small businesses here in the Philippines with their business registration, accounting, and tax compliance needs. Throughout her journey, she dealt with clients in a variety of industries including startups, small and medium-sized enterprises, manufacturing, and trading by providing tailored business solutions for their company needs. Divina wakes up each morning to serve businesses with their non-core business processes to help them stick to the things they are really passionate at.