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A Comprehensive Guide on Filing Quarterly Percentage Tax Return

A Comprehensive Guide on Filing Quarterly Percentage Tax (BIR Form No. 2551Q)

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What do you need to know about filing BIR Form No. 2551Q or Quarterly Percentage Tax?

  1. Who needs to file BIR Form No. 2551Q?
  2. When and where you can you file?
  3. How can payments be made?
  4. What penalties will be imposed upon failure of filing?

 

Taxation in the Philippines has undergone major transformations and new laws were implemented at the beginning of the fiscal year 2018. For those that use an online tax calculator in the Philippines, don’t be too alarmed. We’re sure companies will learn to adapt and change their algorithm appropriately.

That said, even if you do use online tax calculators or don’t handle your own taxes, you still have to remain informed. The TRAIN law changed a lot of things regarding tax computations and filing. One change in particular and the one we’ll be discussing today is the revised BIR Form No. 2551Q or the quarterly percentage tax return.

The BIR recently released this form on April 25, 2018 – the last day of filing quarterly percentage tax return – and many were left confused. If you’re one of those people, then we’ll help you out. Below is a simplified yet comprehensive version of the guidelines and instruction that the BIR released.  Hopefully, this helps you understand everything about BIR Form No. 2551Q.

Who Can File BIR Form

Who Can File BIR Form No. 2551Q?

BIR Form No. 2551Q should be filed in triplicate by:

  • Non-VAT taxpayers with gross annual revenues not exceeding P3M
  • Domestic and international carriers except those who use bancas and animal-drawn vehicles
  • Franchisees of  the either of the following: gas or water utilities;  radio and/or TV broadcasting companies whose gross annual revenues do not exceed P10M; services that send overseas dispatch, messages, or conversations from the Philippines
  • Proprietors, lessees, or operators of cockpits, cabarets, racetracks, night or day clubs, professional basketball games, etc.
  • Banks, non-bank financial intermediaries and finance companies
  • Life insurance companies and agents of foreign insurance companies

 

When and Where You Can You File?

BIR Form No. 2551Q shall be filed and the tax shall be paid within twenty-five days after the end of each taxable quarter. So, from the 15th of April, July, and October, the deadline has been moved to the 25th of the same months.

You shall do this with any Authorized Agent Banks (AAB) of the Revenue District Office (RDO) where you are registered or are conducting business. In case there are no AABs, then this form shall be filed with the Revenue Collection Officer (RCO) of your RDO.

If you’re the owner of a franchise, you can file a separate return for your head office and for each branch or you can file a consolidated return for the head office and included branches.

 

How Can Payment Be Made?

Payment can be made manually or electronically. If you’re opting for manual payment, you can do what was mentioned above.  Head to the AAB located in your area that is within the jurisdiction of the RDO or file your return with the RCO.

Online payment, on the other hand, can be accomplished using GCash Mobile Payment, Landbank’s Linkbiz Portal or DBP’s Tax Online. Note that you would still have to manually calculate your corresponding tax dues, as these channels require you to already enter said tax due amount. If you prefer to skip the manual calculations, you can try out Taxumo, a local web-based tax app, that auto-calculates your tax dues, auto-fills your tax forms and lets you file online with just a click of a button.

 

Penalties

What Penalties Will Be Imposed Upon Failure of Filing?

The taxpayer will incur a surcharge of 25% in cases where he/she:

  • Failed to file and pay their quarterly percentage tax return on or before the deadline
  • Filed a return with the wrong person or officer
  • Failed to pay the full or part of the amount of tax due; or
  • Failed to pay deficiency tax

The taxpayer will incur a surcharge of 25% in cases where he/she:

  • Willfully neglected to file the quarterly percentage tax within the prescribed period; or
  • Willfully made a false and fraudulent return

 

Key Takeaway

Outside of the math and computations, that’s practically everything you need to know about BIR Form No. 2551Q. Whether or not you use an online tax calculator in the Philippines, it is important that you are aware of the changes made in how we file our taxes.

The BIR has yet to iron out other processes, so more changes are sure to come over the year. If you don’t stay on top of things, then you might find yourself struggling with the transition. And always remember that one misstep can land you in a lot of trouble, so stay informed and updated!

 

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You may also want to check out our other articles below:

5 Bookkeeping Tips for Those who are Self-Employed

5 Bookkeeping Tips for Those who are Self-Employed

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What are the best bookkeeping tips for self-employed individuals?

  1. Keep logs of your  income & expenses.
  2. Hold on to all financial documents.
  3. Separate professional and personal assets.
  4. Educate yourself in finance and taxation.
  5. Make use of available tools available to simplify the process.

 

One of the biggest walls that self-employed individuals often run into is handling their finances. It’s more than just filing and paying their taxes – because those in the Philippines can use an online tax calculator for that – but the entirety of managing their money.

Handling your own finances is one of the many responsibilities that come with being self-employed and also one that not many are ready for. It is not a skill that can be learned overnight, which makes it even harder to develop. It takes weeks, months, maybe even years to be able to do it properly.

However, if you have enough drive and determination, then you’ll be able to learn how to do it in the nick of time. We’ve even left some bookkeeping tips for the self-employed and all you have to do is to scroll down:

Keeping track of expenses

Keep Logs of Your Income & Expenses

One of the best ways to stay on top of your financial situation is to keep detailed logs of your income and expenses. Sure, online and mobile banking has given us the ability to check our balance at any moment, but do not be satisfied with this. Although you know how much you have, it doesn’t exactly tell you when and where your money is coming and going.

Having actual logs of your expenses will allow you to check your spending habits and adjust accordingly. It will also make budgeting easier since you’ll be able to see where you can cut down costs. Plus, this is another great way to keep track of your cash inflow vs. outflow. And that’s how you’ll know if you are making profit or not with your business.

 

Hold on to All Financial Documents

On the off chance that you or your business gets audited or investigated, you are going to be asked to present several documents like invoices and bank statements. If you can’t provide any, then you’ll be put under a bad and may get into some trouble.

Besides this fact, financial documents can also help lessen your tax. If you provide proof that a purchase or transaction was made for the purpose of your business, then you can immediately deduct it from your total tax due.

Moreover, it makes tracking your expenses a lot easier if you hold on to the documents. But don’t just chuck them in your desk drawer. File your receipts, statements, and other documents in chronological order so you can easily access them at any time.

Assets

Separate Professional and Personal Assets

It’s hard to separate your professional and personal assets when you’re working for yourself. The line between the two is often blurred since work is so heavily integrated into your daily life. However, you need to make the effort to clear the line between them, and you can do this by opening up separate accounts for your business transactions.

There are many benefits that come with doing this and one is that it allows you to see just exactly how much money is tied up in your business. It also prevents you from getting into financial trouble because budgeting and costing are made simpler. By the end of every year, you’ll find it easier to track your business activity because your personal expenses have already been separated from your business ones.

Educate Yourself in Finance and Taxation

Knowledge and information is the best thing to have when it comes to managing your finances, especially for self-employed individuals who are aiming to build their brand. You’ll be surprised at how quickly freelancers and start-up businesses lose their money because of lack of knowledge on the matter.

This doesn’t mean, however, that you have to get some type of formal education on finance and taxation. There’re lots to learn when it comes to bookkeeping like effective and plausible ways on how to cut back, save, and make money, and you can learn all of them through online resources or by asking the right people.

 

Make Use of Technology to Simplify the Bookkeeping Process

For many of us, as much as we’d like to diligently keep our books, we may not have the time to do it ourselves, nor the budget to hire a bookkeeper for us. That’s where technology comes in. There are online apps you could use such as Taxumo, that allows freelancers and SMEs  to simplify the bookkeeping process, by auto-generating journal entries, which you can download, paste / transfer to your Manual Books of Accounts. 

 

Key Takeaway

It’s hard to be self-employed and manage all your finances and taxes on top of your workload. Thankfully, those in the Philippines can use an online tax calculator to lessen the difficulty of filing and computing taxes, but what about the rest of the money stuff? How do you make bookkeeping easier?

Well, it starts by developing the right habits and obtaining the right information. If you just follow the tips listed above, you’ll be able to properly handle your finances like the true boss that you are!

 

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