In the business lifecycle, recurring accounting and taxation events are critical for compliance and financial health. Here’s a summary of key recurring events:
1. Daily/Weekly Events
- Recording Transactions:
- Documentation and journalizing of daily financial transactions like sales, purchases, and expenses.
- Use of accounting systems (manual or software) to ensure real-time updates.
- Cash Flow Monitoring:
- Tracking inflows and outflows to maintain liquidity and operational efficiency.
2. Monthly Events
- Payroll Processing:
- Calculation of employee salaries, withholding taxes, and contributions (SSS, PhilHealth, Pag-IBIG).
- Filing and payment of withholding taxes using BIR Form 1601C.
- Reconciliation:
- Bank reconciliations to ensure records match bank statements.
- Reconciling accounts receivable and payable.
- Preparation of Monthly VAT or Percentage Tax Returns:
- Filing BIR Form 2550M for VAT. This is now optional.
3. Quarterly Events
- Income Tax Returns (ITR):
- Filing BIR Form 1701Q or 1702Q for quarterly income tax.
- Submission of VAT Returns:
- Filing BIR Form 2550Q for VAT taxpayers or BIR Form 2551Q for percentage tax
- Financial Statements Preparation:
- Interim statements for management decisions and tax compliance.
- Alphalist Submission:
- Quarterly alphalist of payees subject to withholding tax (BIR requirement).
4. Annual Events
- Annual Income Tax Returns (ITR):
- Filing BIR Form 1701 (for individuals) or BIR Form 1702 (for corporations).
- Deadline: April 15 for individuals or 15th day of the 4th month following the fiscal year for corporations.
- Audited Financial Statements (AFS):
- Submission to BIR and Securities and Exchange Commission (SEC) for corporations and partnerships.
- Year-End Payroll Compliance:
- Preparation and issuance of BIR Form 2316 to employees.
- Renewal of Business Permits:
- Renewal of Mayor’s permits and other local business licenses in January.
- Inventory Count:
- Conducting physical inventory to reconcile with accounting records.
- Transfer Pricing Documentation:
- Submission, if required, for related-party transactions.
5. Occasional Events
- Tax Audits and Assessments:
- Responding to BIR’s Letter of Authority (LOA) and other tax audit notices. Usually a company received a separate LOA for VAT and LOA for All Other Taxes except VAT.
- Amendments and Adjustments:
- Addressing changes in tax laws and regulatory updates.
- Asset Disposal or Acquisition:
- Recording of gain or loss on asset disposal. Likewise update also the lapsing schedule.
- Corporate Changes:
- Reporting changes in ownership, capitalization, or structure to BIR and SEC.