2 Tips & Tricks For MSMEs Tax Compliance Handouts PDF

Tips and Tricks for MSMEs
Easy Tax Compliance

(Including Guide on How to Do Online Tax Filing and Payment)
Katherine Uy Sobremonte, CPA, CMA, MBA, REB

Partner and Chief Operating Officer
Torre, Sobremonte & Associates Company
1
All rights reserved 2020 KUS
Outline
• Overview of Basic Tax Compliance for MSMEs
• Common Errors Committed by Taxpayers
• Updates on Tax Deadlines applicable to MSMEs
because of ECQ
• How to use BIR online filing system
• How to pay tax returns online (Using Landbank,
Gcash) within your comfort zone
2
Overview of Basic Tax Compliance for MSMEs
1.Registration of Business
2.Invoicing Requirements
3.Keeping Books of Accounts
4.Filing and Payment of Tax Returns
3
1. REGISTRATION
REQUIREMENTS
❑ Fill up 1901 (for Single Prop); 1903 (for Corporation)
1. Taxpayer’s name
2. Business Name/ Business Style
3. PSIC Code (Industry Code)
4. Place of residence/business address
5. Business and such other information as may be required by
the Commissioner
❑ Attach Xerox DTI/SEC Registration Papers
❑ Mayor’s Permit Application Form with stamp received by BPLO
❑ Professional Tax Receipts if Self Employed Professional
❑ Contract of Engagement if Consultant
❑ Pay Php 500 Registration Fee
❑ Contract of Lease
❑ Pay Documentary Stamp Tax on Rent/Lease if any 4
1. REGISTRATION
Use Tax Type per your

BIR Registration
Certificate as a guide on
what returns to file
5
USUAL TAXES TYPE FOR MSMEs
Tax Type BIR Form
RF Registration Fee 0605
IT Income Tax 1701/1701A;
1702RT/MX/EX
PT Percentage Tax 2551Q
VT Value Added Tax 2550M/2550Q
WT Withholding Tax on Compensation 1601C
EWT Expanded Withholding Tax 0619E/1601EQ
FT Final Withholding Tax 0619F/1601FQ
6
Who can Avail 8% Option Tax
1. Individuals (Single Proprietor or Professional or Mixed Income
Earner) earning from self-employment and/or practice of
profession
2. Taxpayers whose gross sales/receipts and other non-operating
income did not exceed the P3,000,000 VAT threshold during the
taxable year
3. Taxpayers registered and subject only to percentage tax under
Section 116 of the NIRC, as amended; or taxpayers exempt from
VAT or other percentage taxes; and
To avail, you must update your BIR Registration (2303)

And signify your intention to elect the 8% income tax rate in 1701Q
1st Quarter
7
How to Avail 8% Option Tax
Under RMO 23-2018 Section III. A.2 Self-Employed
Individual Availing of 8% Income Tax Rate needs to submit
application for registration information update (BIR Form 1905).
Take Note: The updating or replacement of the COR is only for the first
time availment of the 8% income tax rate. There is no need to replace
the COR in the succeeding years.)
Moreover, COR will be printed with “PT” (Percentage Tax) on the face
of the 2303 but will have reminder that
“If qualified and opted to avail of the 8% income tax rate, the
filing of quarterly percentage tax return is not required for the
current taxable year the option was made”
8
Not allowed to avail 8% Option Tax
a. Purely Compensation Income Earners
b. VAT-registered taxpayers, regardless of the amount of gross sales or
receipts and other non-operating income
c. Taxpayers exempt from VAT or other percentage taxes whose gross
sales/receipts and other non-operating income exceeded the
P3,000,000 VAT threshold during the taxable year
d. Taxpayers who are subject to Other Percentage Taxes under Title V of
the Tax Code, as amended, except those subject under Section 116 of
the same Title
e. Partners of a General Professional Partnership (GPP)
f. Individuals enjoying income tax exemption
g. Those under Barangay Micro Business Enterprises (BMBE) RA # 9178
9
Barangay Micro Business
Enterprises (BMBE)
10
R.A. No. 9178 “Barangay Micro Business
Enterprises (BMBEs) Act of 2002
• Can be sole proprietorship or a corporation, partnership,
cooperative or association
(a) engaged in the production, processing or manufacturing of

products or commodities, including agro-processing, trading and
services, and which activities are barangay-based and micro-
business in nature and scope
(b) whose total assets, real or personal, inclusive of those arising from
loans but exclusive of the land on which the particular business
entity’s office, plant and equipment are situated, shall not be more
than PhP3,000,000.00.
11
R.A. No. 9178 “Barangay Micro Business
Enterprises (BMBEs) Act of 2002
• BMBE application for registration (BMBE Form 01)
• File BMBE Form 01 with the Office of the City or Municipal
Treasurer where the principal place of business of the BMBE is
located
• Application should be processed within fifteen (15) working days
upon submission of complete documents, otherwise, the BMBE
shall be deemed registered.
• If eligible, a Certificate of Authority (CA) will be issued by Cityhall
• Effective for a period of two (2) years, and renewable for a period
of two (2) years for every renewal.
• The Office of the Treasurer shall issue the CA promptly and free of
charge, unless a fee, not exceeding P1,000.00
12
2. INVOICING REQUIREMENTS
❑ Within 30 days of release of 2303, secure Authority to Print
(BIR 1906)
❑ Ask Printer to Print
Supplier of Goods Sales Invoice *Principal

Supplier of Services Official Receipts Receipts
Supplier of Goods Collection Receipts;
Delivery Receipts;
Purchase Order *Supplemental
Supplier of Services Statement of Account/ Receipts
Billing Statement
* RR 18-2012
13
2. INVOICING REQUIREMENTS
❑ Required to issue duly registered receipts for each sale and transfer of
merchandise or services rendered valued at Php 100 or more.
❑ The following DETAILS are required to be shown IN THE INVOICE OR
OFFICIAL RECEIPT: a) Date of transaction
b) Quantity
c) Unit Cost
d) Description of Merchandise or Nature of Service
e) Name of Buyer
f) Business Style, if any
g) Address of the purchaser, customer or client
h) TIN or Tax Identification Number, if purchaser is a
VAT registered taxpayer
14
AMOUNT OF COMPROMISE PENALTY
First Offense Second Offense
For failure to issue receipts or sales or commercial invoices P10,000 P20,000
For refusal to issue receipts or sales or commercial invoices 25,000 50,000
For issuance of receipts that do not truly reflect and/or contain all
1,000 2,500
the information required to be shown therein
If the information missing is the correct amount of the transaction 2,000 5,000
If the duplicate copy of the invoices is blank but the original copy
10,000 20,000
thereof is detached from the booklet
For possession or use of unregistered receipts or invoices 10,000 20,000
For use of unregistered cash register machines in lieu of invoices
25,000 50,000
or receipts
For possession or use of multiple or double receipts or invoices Not subject to Compromise
For printing or causing, aiding or abetting the printing of:
a) Receipts or invoices without authority from the BIR 10,000 20,000
b) Double or multiple sets of receipts or invoices Not subject to Compromise
c) Receipts or invoices not bearing any of the following: 5,000 10,000
Consecutive numbers
· Name of Taxpayer
· Business Style
· Business address of the person or entity to use the same
· Taxpayer Account No.
· Name, address, date, authority no. of the printer and inclusive
serial numbers of the batch or receipts printed
· VAT No., if taxpayer is VAT-registered
For failure of the printer to submit the required quarterly report 15
1,000 3,000
under Sec. 238 of the Tax Code as amended
3. BOOKS OF ACCOUNTS
SALE OF GOODS SERVICE
Sales Journal Cash Receipts Book
Purchase Journal Cash Disbursement Book
Cash Receipts Journal General Journal
Cash Disbursement Journal General Ledger
General Journal
General Ledger
16
KEEPING BOOKS OF ACCOUNTS
❑ Basis for preparation of monthly, quarterly and annual tax returns
❑ Audited financial statements is required for corporations,

companies, partnerships or persons whose gross annual sales,
earnings, receipts or output exceed Php 3,000,000.
❑ Certified Balance Sheet and Income Statement for those with less
than Php 3,000,000 Gross Annual Sales.
❑ For corporation with Php 600,000 or more Total Assets or Total
Liabilities, SEC mandates filing of financial statements duly audited
by independent certified public accountant (CPA) registered with the
Board of Accountancy.
(Based on SEC Notice issued on March 18,2019)
17
FILING & PAYMENT OF TAX RETURNS
18
Common Error
of Taxpayers
19
Error 1: Failure to Register your Business
Error 2: Failure to issue BIR registered Invoices/Receipts
Error 3: Incomplete Details in the Invoice
Error 4: Duplicate Copy is Blank
Error 5: Removing all copies of bound invoice

Error 6: Duplicate Typewritten, Triplicate Hand Written
Error 7: Failure to display basic BIR registration
Error 8: Failure to keep records, invoices

Error 9: Ignore Notices from BIR especially Letter of Authority
(LOA)
20
Error 10: Irk BIR Examiners
Error 11: Late Payment of Returns
Error 12: Wrong Mode of Filing or Wrong Venue
Error 13: Non-Submission of Reportorial Requirements
Error 14: Inconsistencies in the declaration

Error 15: Improperly Accumulated Retained Earnings for
Corporation
Error 16: Multiple TIN
Error 17: Retirement of Business Without Proper Closure

with BIR
Error 18: Flaunting your Assets
21
Updates on Tax Deadlines
applicable to MSMEs because
of ECQ
Use RR 11-2020 as Guide
22
23
24
TAKE NOTE
A. For EFPS filers, the system automatically computes for the
penalty. Disregard the amount of penalties computed and
ONLY PAY THE BASIC AMOUNT DUE. All AABs during ECQ
period can accept over the counter filing and payment of
returns of EFPS filers even without the printed copy of the
pop-up message screenshot as proof of unsuccessful
eFiling during ECQ (Bank Bulletin # 2020-04)
B. For non-EFPS filers, you may file your returns through

eBIRForms facility and submit your forms online.
25
TAKE NOTE
C. Payment of eBIRForms can be made manually or
electronically.
1. If you will pay manually, you can pay at ANY
Accredited Authorized Bank (AAB) per BIR RMC 48-
2020 issued on May 22, 2020 or through Revenue
Collection Officers (RCOs) in areas with no AABs for
payment not to exceed Php 20,000 while check
payment payable to Bureau of Internal Revenue has
no limit.
26
TAKE NOTE
C. Payment of eBIRForms can be made manually or
electronically.
2. If you will pay electronically, you can use the following

online payment:
C.2.1. Land Bank of the Philippines {LBP) Link.biz Portal –
for those with ATM account with LBP and/or holders of
Bancnet ATM/Debit/Prepaid Card
C.2.2. Development Bank of the Philippines (DBP) Pay Tax Online
C.2.3. Union Bank Online Web and Mobilie Facility for those with
Union Bank Account
C.2.4. Mobile Payment such as Gcash and Paymaya
27
How to file Tax Returns Online
28

29

30

31

Individual Taxpayer earning income PURELY
from Business/Profession
1. Availing of 8% Option Tax
2. Opted to use Optional Deduction
32
1. Mixed Income Earner
2. Individual Taxpayer
who opted to use
Itemized Deduction
3. Estates and Trusts
33
Steps for Online Submission
• Fill Up
• Validate
• Save
• Click Submit (it will automatically email the save file
to bir)
• Wait for your email e-BIR confirmation reply
34
Steps for Online Submission
35
FILING OF ITR AND ATTACHMENT LIKE
AUDITED FS
Prepare 3 sets for Individual Taxpayer; 4 sets for Corporation
➢1701v2018 form (individual); 1702RT/MX/EX for corporation or
partnership
➢Attach SAWT
➢Attach 2307 Certificates
➢e-BIR email confirmation reply
➢Attach proof of payment (if through online payment facility)
➢Audited Financial Statements if Gross sales is Php 3 Million or
more
➢Financial Statements Certified by Treasurer if less than Php 3
million Gross Sales
36
37
38
Tax Return Inquiry
Select the Form and Period
See Payment Details or

Pay the returns 39
How to use BIR Alpha for SAWT
(2307 Certificates)
40
41
42
Desktop 43
44
45
46
47
Email zip file to
esubmission@bir.gov.ph
48
HOW TO ENROLL IN
LANDBANK FOR
ONLINE TAX PAYMENT
49
Step 1: Go to Landbank Branch and
Open an ATM Personal Account
a. Go to any Landbank branch

b. Open an ATM Personal Account (You cannot open Joint Account
or Corporate Account)
c. Prepare at least Two (2) Valid IDs
d. Prepare Proof of Billing
e. Fill Up online the Landbank Application form
f. Landbank has a Business Center inside its premise with free use
of laptop
g. The New Accounts officer will help you open the website
https://dobs.landbank.com/DOBS/home/applyNow
h. Inform New Accounts Officer you want to use this ATM account
for Online Banking and payment of Taxes
50
51
Step 2. Click Personal Account and
Terms and Conditions
52
Step 3. Fill Up Information
53
Information Needed
a. First Name, Middle Name, Last Name
b. Registered Address with Barangay Number
c. Telephone Number, Cellphone Number
d. Email Address
e. Employer’ Name & Details; If Self-Employed, your business name
or Profession
f. TIN
g. Sources of Income, Estimated Monthly Gross Income
h. ID Number of ID presented, Proof of Billing
i. Proposed Account ID, Security Questions and Answers
j. Estimated Monthly Deposit and Frequency of Deposit
54
Step 4. Take Photo on the
Spot
*Photo credit to Google
Photo
Step 5. Account Officer will Print Online Application

Form, get your proof of billing and photocopy your IDs
Step 6. Sign the Printed

Application form and Specimen
Signature Sheet
55
Step 7. Deposit Cash
Step 8. Get your ATM
Step 9. Activate your ATM

through Landbank ATM Machine
Step 10. Wait for your Email Link

for Online Activation *Photo credit to Google Photo
56
Step 11. Check your Email
Email
from
Landbank
57
Step 12. Click the link and you will be
directed to Landbank (lbpiaccess.com)
Encode the Account ID

you inputed in the Online Activation Code
Application Form from Email
58
Step 14. Click Submit and Answer Security
Questions
Encode New Password
SUCCESS !!!
Go to BIR Website and click ePay,
you can now start paying your tax returns
59
All rights reserved TSAC 2020
HOW TO PAY TAXES ONLINE
THROUGH LANDBANK
ONLINE
60
Step 1: Go to BIR Website (www.bir.gov.ph)
61
Step 2. Click Land Bank
62
Step 3. Click Pay Now
63
Step 4. Choose Bureau of Internal Revenue
64
Step 5. Click Tax Payment
65
Step 6. Fill Up Information
66
Step 6. Fill Up Information (continuation)
67
Step 7. Authenticate payment by entering
OTP sent from Registered Cellphone #
68
Step 8. Authenticate payment by entering
ATM PIN
69
Step 9. Print your Payment Confirmation Receipt
70
All rights reserved TSAC 2020
HOW TO PAY TAX USING
GCASH
71
Step 1: Download Gcash
App in your Android or
IOS
Step 2: Register your
Cellphone number and create
your MPIN
Step 3: Open Gcash App and

Enter your MPIN
72
Step 5: Choose Pay
Government
Step 4: Choose Pay

Bills in User Menu
73
Step 6: Choose Form
Series
74
Step 7: Enter the
following data:
a. Return Period
b. Type the TIN
c. Branch Code must be
5 digit (0000)
d. Amount of Tax to be
paid
e. Email address where
the payment
confirmation receipt
will be emailed
75
CONFIRM
Step 8: Check if the

details are correct
before clicking
confirm
76
Step 9: Print or
Download Tax
Confirmation Page
S
U
C
C
E
S
S
77
Step 10: You will receive Text Notification and
Email about your Payment
TIN
TIN
Reference No. & Email
78
Thank You
79

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2 Tips & Tricks For MSMEs Tax Compliance Handouts PDF

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Tips and Tricks for MSMEs

Easy Tax Compliance

Katherine Uy Sobremonte, CPA, CMA, MBA, REB

3.Keeping Books of Accounts

4.Filing and Payment of Tax Returns

Use Tax Type per your

To avail, you must update your BIR Registration (2303)

(a) engaged in the production, processing or manufacturing of

Supplier of Goods Sales Invoice *Principal

❑ Audited financial statements is required for corporations,

Error 2: Failure to issue BIR registered Invoices/Receipts

Error 3: Incomplete Details in the Invoice

Error 4: Duplicate Copy is Blank

Error 5: Removing all copies of bound invoice

Error 7: Failure to display basic BIR registration

Error 8: Failure to keep records, invoices

Error 14: Inconsistencies in the declaration

Error 17: Retirement of Business Without Proper Closure

Use RR 11-2020 as Guide

B. For non-EFPS filers, you may file your returns through

2. If you will pay electronically, you can use the following

All rights reserved 2020 KUS

All rights reserved 2020 KUS

All rights reserved 2020 KUS

All rights reserved 2020 KUS

2. Opted to use Optional Deduction

3. Estates and Trusts

Select the Form and Period

See Payment Details or

a. Go to any Landbank branch

Step 5. Account Officer will Print Online Application

Step 6. Sign the Printed

Step 8. Get your ATM

Step 9. Activate your ATM

Step 10. Wait for your Email Link

Encode the Account ID

Step 3: Open Gcash App and

Step 4: Choose Pay

Step 8: Check if the

Reference No. & Email

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