Taxes To Be Paid By I-Café Owners To BIR
After registering the business with the Bureau of Internal Revenue (BIR), an owner of a self-run i-café must file the following BIR Forms and pay the corresponding taxes. You can see E.A. Buck Accounting & Tax Services for the procedures. I breakdown the information into periods (annual, quarterly and monthly) and indicated the deadlines or filing dates together with the description of the forms to be used and taxes to be paid as follows:
A. Annual:
- BIR Form 0605 – Payment Form – This form is to be filed and paid during registration of the business and the renewal of its registration. The Registration Fee of P500 is paid upon registration of a new business and its renewal every year. Deadline is January 31 for the renewal but the fee is normally paid during stamping of books of accounts in December of each year.
- BIR Form 1701 – Annual Income Tax Return for Self-Employed, Professionals, Estates, and Trusts – This return is filed annually by the following for business income derived during the calendar year regardless of amount of gross income. Deadline is April 15 of each year and amount of income tax to be paid varies from 5 to 32% of net taxable income less quarterly income tax payments.
B. Quarterly:
- BIR Form 1701Q – Quarterly Income Tax Return for Self-Employed, Professionals, Estates, and Trusts Including Those with both Business and Compensation Income – An income tax return filed quarterly by all Self-employed taxpayers, Professionals, Estates and Trusts engaged in trade/ business including those with both business and compensation income. Filing Dates: Quarter/(Months Covered) Due Date 1st (Jan-March) on or before April 15 2nd (April-June) on or before August 15 3rd (July-Sept) on or before November 15. Amount of income tax to be paid varies from 5 to 32% of net taxable income.
- BIR Form 2307 – Certificate of Creditable Tax Withheld at Source – A Certificate to be accomplished and issued to recipients of rental payments subject to expanded withholding tax paid by a café owner showing therein the monthly breakdown of the total income payments made and the total taxes withheld and remitted during the quarter. Filing Date – to be issued to Lessor on or before the 20th day of the month following the close of the taxable quarter. Upon request of the Lessor, however, the café owner must furnish such statement to the Lessor simultaneously with the income payment.
C. Monthly:
- BIR Form 1601E – Monthly Remittance Return of Creditable Income Taxes Withheld (Expanded) – This return is filed by every café owner who rents his place of business, who is either an individual or non-individual, required to deduct and withhold taxes on rental payments subject to Expanded / Creditable Withholding Taxes. Filing Dates: On or before the tenth (10th) day of the month following the month in which withholding was made except for taxes withheld for the month of December which shall be filed on or before January 15 of the succeeding year. Amount of tax to be withheld and paid to BIR is 5% of the rental payment.
- BIR Form 2551M – Monthly Percentage Tax Return – This return shall be filed in triplicate by the lanshop owner whose gross annual sales and/or receipt do not exceed P1,500,000 and who are not VAT-registered persons. Filing Dates: Not later than the 20th day following the end of each month. Percentage tax to be paid is 3% of gross income.
NOTES:
a) The above-described forms, payments and deadlines are for i-café owners who do not withhold income taxes from their employees. In legal terms, the above are applicable to self-employed i-café owners who personally do the tending of their shops. BIR Forms 1601C, 2306 and 2316 are used by those who withhold monthly income taxes from their employees.
b) For details and other matters about taxes to be paid to BIR, please go to www.bir.gov.ph
in connection with stamping of Manual Books of Accounts, here is an update (see RMC 82-2008 at BIR website)
Ed Zafra: @almond – Thank you for the information. I looked at the document and it says that the taxpayer does not need to have new Manual Books of Accounts stamped every year. They must only have new books stamped after the curent ones are totally consumed.
We at Caloocan RDO are required to have our accounting books stamped every year even if we haven’t consumed all of it. I think it is a way for them to monitor their tax payers if we are really filing the required documents. We have to pass a clearance form from the accounting office (i think). From there they will issue a list of open cases (forms that you have not filed or you may have filed them but the accounting office did not receive any copy). You must have the copy of this filed forms to clear yourself from open cases and then have your accounting books re-stamped.
Revenue Memorandum Circular No. 82-2008 was issued December 23, 2008 and this date is rather late to get implemented for last year’s stamping of manual books of accounts. Open cases are tracked by the RDO’s computer system not by examining the taxpayer’s books of accounts.
By the way, RMC No. 82-2008 now prohibits the inspection of entries on old books of accounts by the Taxpayer’s Services Section which is tasked to stamp new books. You just have to present new books for stamping when the old ones are fully consimed.