Five (5) Tax Compliance Hacks for Start-ups After Business Registration
Starting a new business is a big undertaking, and it’s important to ensure that you have all your ducks in a row when it comes to tax compliance. Failing to properly handle your taxes can lead to significant fines and penalties, and it can even put your business at risk of closure.
As a start-up in the Philippines, it’s necessary to be aware of the tax laws and regulations that apply to your business. Here are five important tax compliance hacks that can help you stay on top of your tax obligations:
1. Maintain current financial records
Keep accurate and up-to-date records. It’s important to keep accurate and complete records of all your business transactions, including invoices, receipts, and any other documents related to your income and expenses.
This will not only help you stay organized and on top of your tax obligations, but it will also make it easier to prepare and file your tax returns.
2. Understand your tax obligations.
As a start-up, you’ll need to register for various taxes, including value-added tax (VAT), income tax, and local business taxes. It’s important to understand the tax laws and regulations that apply to your business, so you can properly calculate and pay the correct amount of tax.
File your tax returns on time. Filing your tax returns late can result in significant fines and penalties, so it’s important to make sure you file your returns on time. If you’re not sure when your tax returns are due, you can check with the Philippine Bureau of Internal Revenue (BIR) website for more information.
3. Display your Certificates from DTI, SEC, BIR, or LGU, if applicable
You must prominently display certain certificates at your business location, including your DTI Certificate, BIR Certificate of Registration, and local government permits. It is also required to have an “Ask for Receipt” sign displayed.
Failing to do so can result in penalties, and it is common for government agencies to conduct spot checks to ensure compliance. In addition to fulfilling legal requirements, displaying these documents can help to establish credibility with clients and stakeholders.
You should keep multiple copies of your business permits, and certificates, both physical and digital, for easy access if the original documents are lost or need to be presented.
4. Provide Official Receipts or Sales Invoice
It is advisable to always provide a BIR-registered receipt or sales invoice for all transactions, even if the customer does not request one.
Receipts and sales invoices serve as documentation of sales transactions and should be kept on file at your registered business address along with financial records. These documents may be required as supporting evidence for tax deductions in the future.
5. Seek professional advice.
If you’re not sure how to handle your tax obligations as a start-up, it can be helpful to seek professional advice from a tax accountant or lawyer. They can help you understand your tax obligations and ensure that you’re compliant with all the relevant laws and regulations.
If you’re having trouble understanding your tax obligations or are facing a tax issue, don’t be afraid to ask for help. Just send us a message at info@djkaaccounting.com.
Tax compliance is an important aspect of running a start-up in the Philippines. By following these five tax compliance hacks, you can ensure that your business is in good standing with the government and avoid any possible exposures.
