Did you know that simple tax mistakes can lead to hefty fines or even business closure?
Here are 5 critical BIR violations every business owner must avoid:
1. Late or Non-Filing of Tax Returns
Filing your tax returns on time is one of the most basic obligations of any registered taxpayer. Failing to file — or filing late — triggers penalties including a 25% surcharge, 12% annual interest, and compromise penalties under RMO 7-2015.
2. Underdeclaring Income (Tax Evasion)
Deliberately reporting less income than what you actually earned is considered tax evasion. The BIR has sophisticated tools to cross-check your declarations against third-party data, bank records, and industry benchmarks.
3. Not Issuing Official Receipts or Invoices
Per Revenue Regulation 10-2019, sellers must issue BIR-accredited receipts for transactions of PHP 100 and above. Failure to issue proper documentation can result in penalties and even business closure.
4. Failing to Withhold and Remit Taxes
If your business is required to withhold taxes on compensation or expanded withholding tax on certain payments, you must remit these to the BIR on time. Non-remittance is treated seriously and can lead to criminal prosecution.
5. Operating Without Proper BIR Registration
Every business operating in the Philippines must be registered with the BIR. Operating without registration — or without the required permits, books of accounts, and receipts — exposes you to penalties and potential closure.
Stay Compliant
Stressed about tax compliance? We can help keep your finances in order and your business BIR-compliant. Message us for hassle-free accounting and tax services!