10 Tax Tips Every Aspiring Entrepreneur Needs to Know
Not all businesses—especially those that have just undergone— have the capability of putting up their own tax-crunching department. This is especially true for younger businesses that have yet to expand enough to accommodate their own accounting team. However, whether you’re a small or a big business, your tax numbers should be in order. Here are some must-know tips:
- Get help from a tax expert.
Taxation is tricky business but one that is necessary to know. Without your own in-house tax unit, you may seek help from professional tax consultants that can give you an overview of your business’ tax requirements.
- Keep a close eye on the numbers.
The knowledge you get from a tax expert will be rendered moot if you don’t have knowledge of the actual numbers—the expenses, the profits, the revenues—flowing through your business. Be diligent enough to know these data.
- Ensure that you have completed .
Complete your requirements at DTI, SEC, the Mayor’s Office, BIR and all these other relevant government units to avoid potential penalties.
- Continue to expand your taxation knowledge.
By attending business, tax and accounting seminars or by joining business groups, you can arm yourself with tax know-how that you may use to your business’ advantage. You’ll never know tax exemptions or surprising penalties if you don’t regularly update yourself with valuable information.
- Register. Register. Register.
The registration with government units is just the start. You also have to register your ledger and books of accounts along with receipts and invoices. Only when they are registered will the BIR recognize these documents come tax-collection time.
- Your registration certificate must be displayed at all times.
Not placing your BIR Certificate of Registration, the “Ask For A Receipt Notice,” and other similar documents in a spot visible to people could net you a penalty from the government.
- Be aware of the deadlines.
Compute your tax responsibilities early and file them early so you can avoid long queues during the tax-filing season. This also affords you time to correct tax mistakes or gather the necessary money to pay of the taxes.
- Double check your tax documents.
Before submitting your BIR forms, make sure that your requirements are complete to make it easier to claim creditable taxes. Likewise, if your calculations are incorrect, the BIR will subject you to further examination. Avoid that pitfall. Your filings should always match the ones in your personal record of accounts.
- Don’t lie about your income.
This will inevitably lead to a numbers-discrepancy somewhere in your documents and one that might cause the BIR to file tax evasion cases on you.
- Stay one step ahead.
Along with separating business and personal expenses, issuing invoices properly and recording your transactions in your books of accounts—all of which are simply best practices—make sure that you’re constantly on the lookout for taxation, compliance accounting and bookkeeping laws in the Philippines. BIR.gov.ph is a good resource for keeping track of possible developments.
Danella Yaptinchay is the managing director of Full Suite, a service company providing back end support to small businesses. She is a cofounder of Co.lab, a coworking space, and of the media company Homegrown. In constant pursuit of balance and self-development, she tries to apply the practices of yoga to her daily life.