It's a NEW YEAR! If you're a business owner whose been through years in your operations, this may not be new to you, but if you're a newly registered business, this may come to you as a surprise -- A new year comes with a full load of compliance requirements!
Aside from the regular monthly and quarterly requirements that you're complying with, there are additional requirements that a business must comply with annually.
We've summarized here a checklist of the 9 annual compliance requirements common for MSMEs.
Check below for the details of each requirement. Updated as of February 8, 2024.
1. Renew LGU (Local Government Unit) Registration
What? This consists but not limited to payment of barangay clearance, local business tax, sanitary permit and other fees.
When? Pay on or before January 20
Where? Barangay and/or Municipal/City Hall
How much?
Barangay Clearance - roughly P500 to P1,000
Municipal/City Hall Permits/Licenses - Local business tax equivalent to 1% of prior year revenue plus other LGU fees (depends on LGU)
Tip that Matters:
You have the option to pay the local business tax quarterly due 20 days after close of each quarter.
Due to COVID-19, some LGUs have online renewal options and some have extended the deadlines. Check with your respective LGUs.
2. Submit Inventory List
What? This is applicable for trading and manufacturing companies with inventory of stock-in-trade, raw materials, goods in process and other goods
When? Submit on or before January 31
Where? BIR Revenue District Office (RDO)
How much?
No BIR-imposed fees but you will incur notary fee around P100 to P300
Tip that Matters:
Ensure that the amount declared in the list can be reconciled with the amount to be reported in your financial statements and annual income tax return.
Download Inventory List form here.
Download Sworn Declaration here.
3. Submit Books of Accounts
What? Submission depends on your registration whether:
> Loose-leaf books - submit printed books
> Computerized books - submit printed books
> Manual books - submit new manual books for stamping if the old books are already full
When?
> Loose-leaf books - Submit on or before January 15
> Computerized books - Submit on or before January 31
> Manual books - Submit when you need new books
Where? BIR Online Registration and Update System (ORUS)
How much? None
Tip that Matters:
View our article about Books of Accounts here to know more.
4. Submit General Information Sheet (GIS)
What? If no stockholders meeting was held in the previous year, the GIS has to be submitted on or before January 30 of the following year. Should an annual stockholders' meeting be held thereafter, a new GIS shall be submitted/filed.
When? Submit on or before January 30
How much? Notary fee around P100 to P300
Tip that Matters:
Download the GIS template here.
5. Provide BIR Form 2316
What? This is the employee's withholding statement that should be provided to your employees for information and for their signature. The signed forms should then be submitted by the employer to the BIR.
When?
Distribute to employees on or before January 31
Submit to the BIR on or before February 28
Where? BIR RDO
How much? Notary fee around P100 to P300
Tip that Matters:
Download Form 2316 template here.
6. File BIR Form 1604C
What? This is the Annual information return of income taxes withheld on compensation (Summary of 1601C). The employee AlphaList should be submitted together with this form.
When? File on or before January 31
Where? File return via eBIR and submit AlphaList via eSubmission (email) OR via EFPS
How much? None
7. File BIR Form 1604E
What? This is the Annual Information return of Creditable Income Taxes Withheld (Expanded) and Income Payments Exempt from Withholding Tax. The AlphaList of income payees during the year should be attached.
When? File on or before March 1
Where? File return via eBIR and submit AlphaList via eSubmission (email) OR via EFPS
How much? None
8. Submit Annual Income Tax Return (ITR / BIR Form 1702) and Annual Financial Statements (AFS) to the BIR
What? This is for companies whose accounting period ends on December 31. The AFS should be attached to the ITR.
When? File and pay on or before April 15
Where?
File ITR via eBIR or EFPS
Pay online via banks, gcash, paymaya, etc.
Submit AFS via eAFS
How much?
Auditor's Fee (if needed) - around P5,000 and above (depending on the size of your company)
Tip that Matters:
Ensure that you have completed your Books of Accounts for ease in the preparation of your FS.
9. Submit AFS to the SEC
What? The BIR-received AFS in #8 should be submitted to the SEC. This is not applicable for sole proprietors and BIR-registered professionals.
When?
Deadlines start from April 29 to July; Deadline depends on the last digit of your SEC Registration Number
Submission before April 29 is allowed
How much? Notary fee around P100 to P300
Some of these may not be applicable to your business. Also, larger or specialized organizations may need to submit additional requirements aside from these. Always check with the regulatory agencies that you're registered with.
Each of the requirement, if not submitted or if submitted late, will bring penalty to your business. So, conserve your limited resources by ensuring you never miss any of these!
Happy New Year!
If you need assistance in any of the above, contact us.
Disclaimer: Numbers that Matter Inc. aims to curate topics that are simplified and easily digestible for micro, small and medium enterprises, by balancing our technical know-hows as accounting professionals and the practical experiences of our team working on ground with our clients. There may be technicalities intentionally omitted from our content to preserve its simplicity. Any practical tip is purely the opinion of the team and is merely informal advice, and thus, should not be taken as a definitive rule. Should you have any specific questions, feel free to message the team at consult@numbersthatmatterph.com and we’d be happy to discuss with you further.
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