By Globe myBusiness
Every entrepreneur should be familiar with the process of filing tax returns and should be following its rules so as not to acquire penalties. We sat down with online tax assistance platform Taxumo to ask about the policies and practices many business owners don’t know, and how they might benefit from these.
From addressing common mistakes to offering smart alternatives, here are their top five tips and reminders:
1. You still need to file taxes even if it amounts to zero.
This is a common mistake most entrepreneurs make, so be careful. Remember that even though your paperwork says zero at the bottom, it still needs to be filed because owing taxes and filing returns are two separate things.
2. If you qualify for Percentage Tax, consider converting it to Value-Added Tax (VAT).
According to Taxumo, the interesting thing about Percentage Tax is that it changes. Right now, the rule is that if your business’ income is 1.9 million or below, you are qualified for Percentage Tax. But with factors like inflation, that number may change in a few years. If you fit the requirements, consider switching to Percentage Tax – it’s a smart way of saving.
3. If you’re after longevity, eventually you’ll come back to VAT.
As mentioned, everything above 1.9M income is no longer qualified for Percentage Tax, which means once you go over that bar — which as a successful business, you likely will — you’ll have to switch back to VAT.
4. Don’t hesitate to ask questions.
A common practice of Filipino entrepreneurs is that they ask their accountant friends for help or guidance when it comes to almost anything related to money. While that’s well and good, don’t forget that some of the best resources available are just a phone call away. You can contact the BIR (Bureau of Internal Revenue) to make sure the information you get is up-to-date and accurate, and they can even advise you regarding payment and processing.
5. Having arrears shouldn’t stop you from paying current taxes.
Sadly, many business owners who have arrears don’t file their current taxes because they’re afraid to get caught. The bad thing about this habit is that the longer you take to file, the bigger your penalty becomes. Still, the best option is to file current tax returns even while you’re fixing your arrears, so the penalty isn’t constantly increasing.
Finally, make sure you have everything in order. Keep yourself updated on the processes, developments and even alternatives for you to make the most out of your taxes. Remember to double-check your form entries and get to the BIR on time. Good luck!
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of The After Six Club.
Edits: Kath C. Eustaquio-Derla
About GLOBE myBusiness
Globe Telecom has a very established history in telecommunications for both consumers and businesses. A pioneer in mobile telecommunications, Globe Telecom seeks to create and deliver products and services that bring customers closer to their aspirations and connect them with the people and events that matter to them the most.
At Globe Business, our prime motivation is to provide your business with empowering solutions that help you maximize profits, minimize costs, and stay connected with your staff and your clients. For solutions that fit, get in touch with Globe myBusiness today.