The Bureau of Internal Revenue (BIR) has been inspecting business establishments across the country in surprise, to verify compliance with registration, invoicing and bookkeeping requirements provided for under existing internal revenue laws, rules and regulations. It’s also commonly known as “Tax Mapping”.
What every business establishment needs to do to avoid penalties from surprise visit of the BIR?
- Register your business to the BIR and pay the Annual Registration Fee on or before January 31 of each year.
- Display your BIR From 2303, Certificate of Registration, the poster ‘Notice to the Public’ (“This establishment MUST issue RECETPT/INVOICES”) and the Registration Fee for the current year in the visible area of the business premises.
- Register your receipt/invoices.
- Issue the registered receipt/invoices for all transaction. If receipt/invoices are cancelled or in blank, the original copy of receipt/invoices must be attached.
- For Cash Register Machine (CRM) and/or Point of Sales Machine (POS) user, the machine must be registered and the original sticker must be paste in the machine authorizing the use of the CRM/POS. The permit issued by the BIR must be displayed.
- In case of defective or out for repair machine, prior to the transfer to other machine, the BIR must be notify.
- Register and maintain Books of Account in the business premises. The books must be updated.
- Withhold taxes on compensation of employees, and on payments subject to final and expanded withholding tax and remit the correct tax as withheld.
- File the necessary returns and pay the corresponding correct taxes at the time/s required by law.
According to the BIR, Tens of thousands establishments have already been apprehended in their program. Some of these apprehensions stemmed from violations such as failure of these businesses to register with BIR, failure to issue duly registered receipts/invoices, use of unregistered receipts/invoices and unauthorized cash register and point-of-sale machines. Said violations carry sanctions which include confiscation of unauthorized cash register and point-of-sale (POS) machines, unregistered invoices/receipts and related business tools, as well as payment of possible deficiency taxes including increments of 25%/50% surcharge, 12% interest and compromise penalty, which ranges from ₱1,000 to ₱50,000 depending on the nature and frequency of the violation, and even imprisonment, for offenses that are subject to criminal prosecution (National Internal Revenue Code Section 253-268).
Tax mapping is coming at an hour you do not expect. Stay awake by investing in tax compliances. Don’t let your hard-earned money turn into penalties.