This article will contain five things that small business owners in the Philippines should know about tax law. Knowing what you need to do when it comes to taxes can save you time and money in the long run. It’s only natural for small business owners to want to take care of their taxes themselves, but sometimes, they need help with all the details.
The first thing is understanding your industry. If you’re in manufacturing or wholesale trade (or any other trade), then this article would be really useful for you! Certain industries are exempt from paying income tax like agricultural trades. If you’re not in one of these industries, it may be time to speak to a CPA about setting up an appropriate business structure. A business lawyer in the Philippines would help you with business structures so that you can be sure you’re doing things right. Another thing to know is that a business structure may not protect your assets, so it’s important to speak with a lawyer about the best way for your situation.
The second thing is understanding the difference between taxing things in the Philippines compared to other countries. You need to be aware of what kinds of taxes you’ll have to pay- which will depend on your business model, location, and the number of employees- because there might be some tax rates that you haven’t heard about yet. For example, if you’re a freelancer or contractor working with digital products in the Philippines, it’s important to be aware of taxes on income from digital transactions.
Third of all, you need to know which business expenses are tax-deductible and how much they can be deducted. For example, suppose your business is an online retail store that has a warehouse in Manila. In that case, the cost for renting this space will most likely be considered as a business expense- but only when it’s used exclusively for business purposes. Consult with your tax lawyer that offers business tax advice in Metro Manila, Philippines about what expenses are deductible for your business.
The fourth thing business owners need to know is that business permits and licenses are different from taxes, but they may also come with tax implications. For example, if you’re a freelancer, the government requires you to pay self-employment tax on all of your earnings. The good news is that there may be tax incentives for getting a business license, depending on your industry. A tax lawyer will help you find out what kinds of licenses are available to your industry and will be able to help you with the application process.
Lastly, it’s important to remember that not knowi0ng the tax laws in the Philippines can have serious consequences. Suppose you’re not aware of what business structure to use or which business expenses are deductible. In that case, your business could be subject to audits by the BIR- so please don’t ignore this important topic! The Bureau of Internal Revenue is a Philippine government agency that collects taxes and customs duties for the national government. To be compliant with tax laws in the Philippines, you’ll have to meet certain obligations such as filing annual income tax returns by April 15th of each year- so don’t forget about these dates!
In conclusion, there are many things that small business owners in the Philippines should know about tax law. I hope this article has helped you figure out how to manage your taxes and provided some insight about things like business structures, tax laws for freelancers, deductible expenses, and more! It’s important to consult first with a professional to avoid any problems with the BIR, so don’t hesitate to ask questions or schedule an appointment with a tax lawyer.