Mixed-Income Earner Taxpayer

Mixed-Income Earner Taxpayer is employed and at the same time earning from his/her practice of profession or business.

They must register with the BIR by accomplishing BIR Form 1901. And, must indicate or declare that they are earning from practice of profession or business and employment.

Once a Taxpayer ceased to be Mixed-Income Earner, s/he must update his/her registration with the BIR by accomplishing BIR Form 1905.

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When and where must a Practitioner of Profession or Independent Individual register to BIR

Before operating a business or commencing a practice of profession, an individual or self-employed professional practitioner must apply and register to the Revenue District Office (RDO) having jurisdiction over his/her head office or branch or facility or residence.

Employed vs Self-Employed Individuals

What is the difference between Employed and Self-Employed Individuals?

Employed Individuals

• Employed individuals are bound by employer-employee relationship and agreement. 
• They received salaries and wages which is subject to withholding tax on compensation.
• The employer withhold a tax on compensation (wht) and complies with the applicable tax requirements.
• The employer deducts WHT from employee's salaries and wages (if applicable) and remit to BIR by filing BIR form 1601-C and paying it to accredited bank or RDO collection office, if no AAB. 

Self-Employed Individuals

• Self-Employed Professionals or Individuals who received income or fees from customers, clients or patients. They have no employer-employee relationship.
• The customers, clients or patients withhold a tax (ewt/cwt) from the income payment from the Self-Employed Professionals or Individuals. 
• The customers, clients or patients must be registered with the BIR before they can withhold a certain amount of income payment. 
• Customers, clients or patients are called the Income Payor or Withholding Agents (WA). While, the Self-Employed Professionals or Individuals are called Income Payee. 

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How to have a TIN

Tax Identification Number or TIN may be acquired by applying and accomplishing BIR form 1901 and submit requirements needed.

See also : BIR Registration Requirements

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BIR Form 1901

BIR Form 1901 page 1 and 2

Bir Form 1901 by Ella Simone on Scribd

BIR Form 1901 Pg2 by Ella Simone on Scribd

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BIR Form 0605 Sample for Annual Registration Fee

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BIR Registration Requirements

Following are the BIR Registration requirements: 

1. Duly accomplished BIR Form 1901
2. Valid Identification issued by authorized government agencies which shows complete name, address and birthdate of the applicant
3. Photocopy of Mayor's Permit, Professional Tax Receipt or DTI Certificate
4. New sets of manual bound Books of Accounts
5. Proof of payment of Annual Registration Fee
6. Duly accomplished BIR Form 1906
7. Final and clear sample/layout of Official Receipts and/or Sales Invoice

Additional documents, if applicable:

1. Franchise documents (for Common Carrier)
2. Photocopy of the Trust Agreement (for Trust)
3. Photocopy of Death Certificate (for Estate under judicial settlement)
4. Certificate of Authority (for BMBE-registered entity)
5. Proof of Registration/Permit to Operate BOI / BOI-ARMM, PEZA, BCDA and SBMA

General Professional Partnership (GPP):

1. Copy of Certificate of Registration with the SEC and Articles of Partnership
2. Copy of Business/Mayor's Permit or, if still in process, duly received Application for Business Permit

Corporations and Partnerships:

1. Copy of Registration with the SEC
2. Copy of Business/Mayor's Permit or, if still in process, duly received Application for Business Permit
3. Articles of Incorporation or Articles of Partnership 

Registration of Branch / Facility:

1. Duly accomplished BIR Form 1901
2. Valid Identification issued by authorized government agencies which shows complete name, address and birthdate of the applicant
3. Photocopy of Mayor's Permit, Professional Tax Receipt or DTI Certificate
4. New sets of manual bound Books of Accounts
5. Proof of payment of Annual Registration Fee
6. Duly accomplished BIR Form 1906
7. Final and clear sample/layout of Official Receipts and/or Sales Invoice

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Are PRC-Regulated Professionals required to register with SEC, DTI, LGU and BIR

Are PRC-Regulated Professionals required to register with SEC, DTI, LGU and BIR?


Registration with Securities and Exchange Commission (SEC), Department of Trade and Industry (DTI), and Local Government Unit (LGU) depends with the nature or source of income a PRC-Regulated Professional would enter to.

If mere practice of profession only, PRC-Regulated Professionals are NOT required to register with SEC, DTI and LGU but they are required to register with Bureau of Internal Revenue (BIR) and comply with Tax laws, rules and regulations.



When are the registrations to SEC, DTI and LGU required for Self-Employed Professionals (SEP)?

• When a SEP set-up an office in a commercial or address separate from his/her residence.  The LGU may require the SEP pay permits and other licenses. 

• When group of SEPS set-up a partnership or corporation. If this is the situation, they must register with SEC, LGU and other government agencies like SSS, PHIC and HDMF.

• When a SEP set-up a business other than his/her profession. This requires DTI and LGU registration. 

Note: Above are registration basics. Check with your LGUs and BIR RDOs. They may still asks for other requirements.

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Medical Practitioners

Who are the Medical Practitioners?


They are the following:

• Doctors
• Dentists
• Other medical professionals
• Medical technologist
• Allied health workers*
• Other medical practitioners who are not under employer-employee relationship

*Allied health workers

• Occupational therapists
• Physical therapists
• Speech therapists
• Nurses
• Etc

Professional Practitioner

Who are Self-Employed Professionals?


Professional, classified as self-employed - refers to an individual or a group, practicing his or their profession or calling, with or without a license under a regulatory board or body. 

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Tax Guide for Self-Employed/Professional Individuals

Source: http://www.easantoscpa.com/

https://academy.lezlearnonline.com/

SSS Maternity Benefit Computation Guide

Here's the guide on How to Compute for SSS Maternity Benefit :

2016 SSS Guidebook Maternity by Ella Simone on Scribd

RR 2-98 Mother RR for Withholding Taxes

Most of what we read regarding withholding taxes, most of the time they refer to RR 2-98.

Before we read further readings on Withholding Taxes, it is better to read the Mother RR which gave birth to it.

RR 2-98 Withholding Tax (Mother RR) by Ella Simone on Scribd

Guidelines in Determining Whether a Capital Asset or Ordinary Asset

RR No. 7-2003

Provides guidelines in determining whether a particular real property is a capital asset or an ordinary asset for purposes of imposing Capital Gains Tax, or the ordinary Income Tax, or the Minimum Corporate Income Tax (MCIT) (published in Manila Bulltein on Feb. 13, 2003)Digest | Full Text

February 11, 2003

Click link and read further BIR issuance re Guidelines in Determining Capital Asset or Ordinary Asset:

RR 7-03 Guidelines in Determining Capital Asset or Ordinary Asset

RR 07-03 Guidelines in Determining Capital or Ordinary Asset by Ella Simone on Scribd

Mother BIR Revenue Regulations (RR), as amended

Below are the Mother Revenue Regulations (RR), as amended:

From the Mother RRs stem various amendments.

Taxation Overview : Taxation Guide

Taxation Overview : Taxation Guide

BIR Tax Deadlines

BIR Tax Deadlines

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BIR Process Flow Chart for Inventory Taking

BIR Process Flow Chart for Inventory Taking

ctto / courtesy to: https://taxationprofessionaluniversity.com/

BIR Process Flow Chart for Oplan Kandado

BIR Process Flow Chart for Oplan Kandado

ctto / courtesy to: https://taxationprofessionaluniversity.com/

BIR Process Flow Chart for Tax Mapping

BIR Process Flow Chart for Tax Mapping

ctto / courtesy to: https://taxationprofessionaluniversity.com/

BIR Process Flow Chart for Letter Notice

BIR Process Flow Chart for Letter Notice

ctto / courtesy to: https://taxationprofessionaluniversity.com/

BIR Process Flow Chart for Electronic Letter of Authority (ELA) or Letter Of Authority (LOA)

BIR Process Flow Chart for Electronic Letter of Authority (ELA) or Letter Of Authority (LOA)

ctto / courtesy to: https://taxationprofessionaluniversity.com/

Proper Recording for Sales and Receipts Entries

For easier determination, reporting and schedules preparation of sales or receipts, it is better to use the titles listed in BIR Form 2550Q, to wit:

• Vatable Sales - Private
• Sale to Government
• Zero-Rated Sales
• Exempt Sales

In actual practice, usually, the entries made is as follows:

dr   Cash or Receivables    xxx

cr            Sales                            xxx

cr            Output Tax                    xxx

Why not segregate them right away, so it is easy to extract and breakdown what type of sales/receipts are made. Your entries may be broken down as follows:

a. For Sales to Private Entities

     dr   Cash or Receivables               xxx

     cr            Vatable Sales - Private           xxx

     cr            Output Tax                              xxx

b. For Sale to Government 

     dr   Cash or Receivables              xxx

     cr            Sale to Government                xxx

     cr            Output Tax                              xxx

c. For Zero-Rated Sales

     dr   Cash or Receivables              xxx

     cr            Zero-Rated Sales                   xxx

d. For Exempt Sales

     dr   Cash or Receivables             xxx

     cr            Exempt Sales                       xxx

Visit and learn from :

https://academy.lezlearnonline.com/

http://www.easantoscpa.com/

Income Tax Return amounts LIFTED from Certified FS and BOA

According to Sec 232 of National Internal Revenue Code, the numbers, figures or amounts in your Income Tax Returns (ITR) and Annual Information Form (AIF) are copied from or lifted from your Certified Financial Statements like Balance Sheets, Profit and Loss Statements or Income Statements, and related schedules. 

In your Statement of Management Responsibility (SMR) for BIR, the Management (you, the Taxpayer) affirms that what you inscribed or entered as entries in your Books Of Accounts which are the basis or foundation of your Financial Statements which later you copied, transferred or lifted to Tax Returns are True, Correct and Complete.

Illustration :

Watch SSS Step by Step Guide for Real Time Processing of Contribution RTP or Payment Reference Number PRN

How To Create SSS PRN

Related Articles:

http://www.sssguides.com/employers-guide-creating-electronic-contribution-collection-list-e-ccl-sss/


http://www.sssguides.com/get-sss-payment-reference-number-prn/


https://sssinquiries.com/contributions/get-payment-reference-numberprn-voluntary-paying-sss-members/

How To Create, Generate and Print PhilHealth SPA

How To Create, Generate and Print PhilHealth SPA 

Permit to use loose-leaf books of accounts

ALL persons engaged in trade or business, or in the practice of profession registered with the Bureau of Internal Revenue (BIR) are required to maintain books of accounts. The registered taxpayer determines which type to adopt as allowed by BIR – (1) manual books of accounts, (2) computerized books of accounts/computerized accounting systems (CAS), or (3) loose-leaf books of accounts. Should the taxpayer opt to use either the computerized or loose-leaf books of accounts, he must file an application for permit to use (PTU) with the BIR.

Recently, it has been observed that there is a confusion on the venue for filing the application for PTU loose-leaf books of accounts due to the transfer of venue for filing PTU for CAS to the National Accreditation Board (NAB.)

The loose-leaf books of accounts is a recording of transactions through encoding of details in the computer and generating copies by printing this out using the approved loose-leaf format to be bound as the bookkeeping record of the taxpayer. Revenue Memorandum Circular (RMC) No. 68-2017 clarified that although the use of loose-leaf books is computer-aided, this is considered manual recording, hence its PTU should not be filed with the NAB.

Currently, the application for PTU loose-leaf books of accounts is within the jurisdiction of the regional director through its legal division, pursuant to RMC No. 13-82. In line with BIR’s aim to promote ease of doing business, the processing of application and issuance of the PTU loose-leaf books of accounts will now be done by the concerned revenue district office (RDO), considering the geographical location of the regional offices (RO) compared to the RDO.

The requirements for evaluation and approval of the application remain the same as follows:

1. Duly accomplished BIR Form No. 1900;

2. Sample format and printout to be used;

3. In lieu of the investigation pursuant to RMC No. 13-82, a sworn statement specifying: (1) the books to be used, invoices/receipts and other accounting records together with the serial numbers of principal and supplementary invoices/receipts to be printed; and (2) commitment to permanently bind the loose-leaf forms within 15 days after the end of each taxable year or upon the termination of its use.

The PTU loose-leaf books issued to the taxpayer’s head office (HO) will cover all registered branches at the time of issuance. Updating of PTU will be required for subsequent additional branches. A certified true copy of the PTU issued by the RDO of the HO must be furnished to each branch authorized to use the approved loose-leaf books.

Source : http://www.grantthornton.com.ph/insights/articles-and-updates1/tax-notes/permit-to-use-loose-leaf-books-of-accounts/