It’s only natural for small business owners to want to take care of their taxes themselves. It is, after all, a huge responsibility that not everyone has the time or knowledge to deal with. But it’s important for any small business owner who wants to be successful in the long run to know what they are doing when it comes to tax law. Taxes are an integral part of running a successful company, and making sure you comply can save you from penalties later on down the line. Tax lawyers such as Atty Gilbert Aslor from the Philippines are excellent resources for small business owners who are seeking advice on how to take care of their business taxes.
This article will cover five things every small business owner should know about tax law in the Philippines, so read on!
Taxes are necessary whether you’re an entrepreneur or not
It’s important to keep in mind that even if your company is small, it still needs to pay taxes. This is something that many small business owners tend to forget, but your company needs to pay taxes. You may think of them as annoying fees you don’t want to deal with, but the truth is they are necessary since they help fund government operations and programs, which in turn make up a large part of our economy.
Register with the Bureau of Internal Revenue (BIR)
You must register with the Bureau of Internal Revenue (BIR) before starting a business, including corporations, non-stock associations, single proprietorships, partnerships, and trusts. You can file for your BIR registration before you even start your business. Still, it’s important to note that once you have paid taxes on an income in a particular year, if the amount received is more than what was previously reported during the filing of the said company or individual, then there are penalties.
Be Aware Of The Different Kinds Of Taxes And Their Rates
You should be aware of the different kinds of taxes and their rates so you can better plan your business’ finances for future growth. Here are some examples: sales tax, income tax, percentage tax, and documentary stamp tax (DTST). The DTST is a tax that is paid when you purchase or sell real property in the Philippines. This includes deeds, mortgages, transfers of titles, and other instruments.
Hire a professional
It’s important to hire a good accounting firm or a business lawyer in the Philippines to help you with your bookkeeping and tax returns. For one thing, it can be hard for most people to stay on top of all the different rules governing taxes in the Philippines since they change frequently. You also need someone who knows what they are doing when preparing your paperwork because there’s no point in filing incorrectly if you get penalized later down the line. Please make sure they are reputable since this is someone who can give you advice on how best to run and grow your business, so take the time to do some research before hiring an accountant for your company.
Understand Tax Deductions
You should also understand that there are certain deductions you can take advantage of when it comes to tax law service in the Philippines. For example, if someone claims they work at home for their company, they may deduct the costs associated with running this office space, such as electricity and internet bills. You can also deduct the cost of your commute to and from work. A tax lawyer can explain more about these deductions if you are eligible to take advantage of them.
Keep Track Of All The Tax Forms And Receipts
Keep track of all the tax forms and receipts, as well as any other documents that have to do with taxes, then store them in a safe place for at least five years after filing or paying your returns. It’s better not to throw anything out! Doing this will make things easier for you in case the BIR ever decides to conduct an audit. Your lawyer or accountant will also be able to go over your tax returns with you if needed.
Hopefully, after reading this article, you feel more confident about taxes and how to file them in the Philippines. Remember that knowing your way around tax law can help you save money, which is always a good thing!