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Post tax-filing reminders

Post tax-filing reminders

by: SHIRLEY S. GO

By this time, businesses following the calendar year as their taxable year had just completed another round of tax preparation process, which, for most, started as early as December last year and culminated with the filing of their Annual Income Tax Return for 2005. I would like to believe that all taxpayers aspire to file their tax returns early. For who would want to join the long queue of taxpayers lined up in accredited banks and BIR offices yesterday just to beat the deadline?

So, if you were one of the early-birds, congratulations!

However, after filing your income tax return, are you really done with your compliance for 2005? Are there any other requirements that you still need to comply with?
 
A taxpayer who filed its annual income tax return through the Electronic Filing and Payment System (EFPS), is required to submit to the BIR office where it is registered within 15 days from date of e-filing its return, a manual return (Form 1702) with the tax due correctly computed together with the Filing Reference Number Page.  This is because the EFPS form is not programmed to adopt the transition rules on the increase in income tax rate to 35%.  Together with the return, the taxpayer must also file its audited financial statements, copies of creditable withholding taxes (Form 2307) supporting the creditable taxes claimed in the return, and other required attachments. Those who are required to file through the EFPS are taxpayers classified by the BIR as Large Taxpayers, Top 10,000 taxpayers, stockbrokers, insurance companies, government agencies, government contractors/suppliers and non-large taxpayers who volunteered to be covered by the system.

Corporations registered with the Philippine Economic Zone Authority (PEZA) and the Board of Investments (BOI) must also comply with certain requirements to avail of the tax incentives granted to them under RA 7916 and EO 226, respectively.

In the case of BOI-registered firms under income tax holiday (ITH), they must file an application for ITH on or before a month after the filing of their final ITR with the BIR. Late filing of such application shall attract penalties. The application must be duly notarized and must be submitted together with the required documents, which include, among others, the completed Income Tax Return together with computation of taxable income per ITR/application in case there is no detail of the reconciling items; gross interest income subjected to final tax for purposes of computing non-deductible interest expense; breakdown of miscellaneous income, if any. Likewise required to be submitted are the Audited Financial Statements; audited segregated income statement of registered and non-registered activity; in case of multi-registered activities, segregated audited income statement for each of the registered activity; breakdown of miscellaneous/ other/various income, if different in amount per ITR; details of scrap sales, if any, and summary sales.  In case the company is availing of the ITH for the first time, it must also submit a Sworn Statement as to the actual start of commercial operation of registered activity to be signed by authorized representative; and BOI Certificate of Registration showing ITH entitlement per Specific Terms and Conditions.

PEZA enterprises, on the other hand, must submit to PEZA copies of their Annual Income Tax Return (BIR Form 1702) within 15 days from filing with BIR and their Audited Financial Statements within 30 days after filing with the BIR.

Corporations, in addition to their obligations as taxpayers, should also take note of their compliance requirements with the Securities and Exchange Commission. Corporations are required to submit their AFS duly stamped “Received” by the Bureau of Internal Revenue and General Form of Financial Statements (GFFS) on or before May 2, 2006, if they adopted the calendar year as their fiscal year.  For this year, the May 2 deadline (instead of April 17) sh all apply even for corporations whose securities are registered with the SRC.  The requirement for file the GFFS in electronic format been extended to corporations with  gross sales or revenue of at least P5,000,000  pursuant to SEC Memorandum Circular No. 6 series of 2006.  This used to apply only to those with gross sales or revenue of P10,000,000.  The due date is 30 days from the due date of the AFS.  Also required to comply with this requirements are investment companies and publicly-held companies enumerated in Section 17.2 of the Securities Regulation Code, investment houses or underwriters of securities, pre-need companies, brokers/dealers in securities, financing companies, investment company advisers, government eligible securities dealers, transfer agents and all other market and self-regulatory organizations, such as exchanges, alternative trading systems and clearing houses.

All these reports are important and must be diligently be prepared. Failure to submit the reports, or delay in the submission thereof, would certainly attract penalties from the regulatory company, or more stringent penalties in the case of habitual offenders. Due attention and care must also be exerted in ensuring that the reports are complete and accurate since these are used to generate reports or data that are useful in  analyzing the performance of the Philippine corporate sector for policy making  purposes. For one, these reports may also be used by the BIR as external sources of relevant information during tax examinations. Since these are public documents, there is a presumption that the information contained in these reports are true and correct.

So, are you done with these reports too? If you are, a much deserved pat on the back is due you. Congratulations!

(The author is a tax manager at Punongbayan & Araullo, a member of Grant Thornton International.  For comments and inquiries, please e-mail the author or call 886-5511.)