Apart from the usual income tax, if you are selling taxable products and services, then you have to be concerned with value-added tax (VAT). Others that who are VAT exempt will have to pay what is known as a percentage tax. If you own a business property, you also pay real estate tax. How can you possibly remember everything?
Avoid a Complex Audit
Whether you are a business neophyte or even if you have been dabbling in business for many years, you must be updated about what taxes you have to pay. Late payments, mistakes, and wrong computations will result in hefty penalties and surcharges. Worse of all, you can face a complex audit from the BIR. Any entrepreneur who has undergone one will tell you it is very stressful because you have to dig through your records, statements, invoices, and inventory lists. It is very much a nightmare to pay arrears!
To help you avoid an audit, here are the most common baseline taxes for business people. Your business may need to pay additional ones depending on your industry. It would be best to consult a professional to ascertain which amongst the complex tax codes are applicable for your company. But do note that as a business, whether sole proprietor, professional or corporation, the common tax types are the following. Let’s take a quick look!
Mandatory National Taxes
Here are the taxes you have to pay to the national government. Though it may seem a lot, it is vital to remember that your taxes are used to finance basic social services that every citizen benefit from. Taxes are also crucial for economic growth.
Required Local Taxes
Local taxes are assessments made by your LGU. It is also used to fund public services in your locality from local road maintenance to garbage collection. Take a look at the most common taxes you’ll pay to your LGU.
Watch this video on Common Taxes You Should File as a Business Owner.
Dealing with your taxes in the Philippines can be quite complex. You can file your taxes in 3 ways: eFPS, eBIR Forms, and Manual Filing by going to a BIR regional office. Payment of taxes can be also done through eFPS and other payment partners like Landbank, UnionBank, GCash and PayMaya. You must understand which filing system will work best for your business as each has its own requirements. Advice from a reliable professional is recommended if you don’t want to encounter any problems.