12 Tax Filing Facts Every Business Should Know for January 2016

January 2016 will roll out in less than a month and we all know what that means—it’s time to map out your goals and business strategies! This, of course, will likely begin with taking care of a crucial aspect of your business: renewing your business permits and license. With the deadline set on or before January 20, 2016, the renewal of business permit must be done ahead of time should you wish to avoid the hassle of falling in line with other tax payers. Not only will you get penalties if you fail to renew, your business will also be prohibited from operating in your local government unit.

Don’t risk paying surcharges. Here are tax facts to emphasize how inherently important tax filing is in every business transaction:

1. Take note that application for SSS, PAG-IBIG and PhilHealth clearances is necessary if your business has 5 or more employees.

2. It is a must for freelancers to register and renew their business permits since they are considered sole proprietors. Freelancers like small business owners must file an Income Tax Return (ITR) declaring mixed income. To kick off the process, a freelancer must first declare that he or she is a Mixed Income Earner (MIE), which is how to tell the Bureau of Internal Revenue (BIR) that he or she has several sources of income aside from the compensation obtained from an employer as salaried worker.

3. Requirements and procedures are different for each local government unit (LGU). The steps you are required to accomplish when renewing a business permit in Makati City may be different from the steps in Quezon City. It is thus a must to research and educate yourself with the steps in the LGU your business will operate in prior to renewing your permit.

4. A business has to register and renew its head office and other branches. If you still haven’t started operating yet, you are still required to pay an annual registration fee of P500—regardless of being a head office or a branch. Failing to pay the annual registration fee has a corresponding penalty of P5,000 to P20,000.

5. Every business in the Philippines is required to pay a community tax certificate or cedula including businesses owned by non-Philippine residents. The community tax will be paid in the business owner’s place of residence or the jurisdiction of the business.

6. It doesn’t matter when during the previous year you registered your business. For instance, paying in December 2015 means you’re still required to renew your business permit on or before January 20, 2016.

7. It is unfortunate that government transactions in the Philippines are slow and inconvenient. Apart from preparing your requirements ahead of time, it is best to clear out your schedule for the day to accomplish renewing your business permit.

8. See to it that your business permit is up-to-date and current. Make sure to keep track of the administration work which is mainly duties related to paying taxes. Ensure that receipts are issued properly because without receipts, you can’t support claims on your income which can lead to issues during filing.

9. Entrepreneurs cannot offset their taxable income with their business loss. This is due to the fact that business tax must be differentiated from income taxes. Business taxes are composed of a percentage of tax on sales, receipts, and Value Added Tax (VAT) while income tax is derived from your annual income as an employee or your personal income.

10. It is important for business owners to itemize all income sources and include all the income received from different sources when filing taxes. Every single detail must be included and accounted for as much as possible.

11. Take note if you’re qualified for exemptions which means your total taxable income can be reduced. When filling out Form 1701, you need to include all of the gross income you received from various sources. You must note down the income you received from your business/freelancing work, as well as income from compensation as an employee. The total income can be qualified for exemptions, which are composed of Personal Exemptions and Business Expenses. Your taxable income will be the basis of your income tax. This is to avoid double taxation in your case when your employer has already paid and filed taxes on your behalf as a salaried employee.

12. Make sure to attach all requirements to the ITR. These may include a summary of taxes, duties, and licenses. For instance, BIR Form 2316 (Certificate of Compensation Payment or Income Tax Withheld) must be attached to the Annual Income Tax Return or BIR Form 1701, which is used for individuals with mixed income. Form 2316 is accomplished and issued yearly by the employer and given to employees whose income is subjected to final tax declaration. The form must indicate the total amount that was paid to the employee, as well as the corresponding taxes withheld during the calendar year.

Keeping track and filing your taxes can be a tedious, time-consuming task but it is your basic obligation as a citizen. Of course, you can opt to hire an accountant to help you properly fill out your paperwork and make sure you get the task done flawlessly. You can also opt to outsource these administrative tasks and have experts handle business related concerns like the renewal of business permits. This way, you can focus on being an excellent employee in your day job while making a great business for your freelance work as well.

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Moving Forward: The Philippine Real Estate Market Game

The emerging real estate industry is the forerunner in Philippines’ movement towards urban revolution. And in support to its urbanization efforts are the country’s firm economic background, the compelling demand for business process outsourcing (BPO) services, an increased rate in consumer spending, and the thriving spate of remittances from the overseas Filipino workers.

As these developments continue to steer the economy with impressive results, this lead most economic experts to believe that 2015 is the perfect time for property investors in the Philippines. Some of the big leaders in the market today such as Vista Land, Megaworld, Ayala Land, and Century Properties are among the long-time honchos who’ve committed their investments in the country.

As these companies managed to grow for the past years, they proved that the property market encourages metropolitan development in the country.

Increased Demand

According to Century Properties’ Managing Director, Robbie Antonio, the demand for new homes is strong.

2011 was the year where the real estate market truly escalated in the Philippines, as the economy inflated a 7% raise, which was the highest compared to the past years. This also included a 7% increase of remittances inflow from over 10 million overseas Filipinos.

In Antonio’s experience, the biggest risk and obstacle in the industry is overspending and being too ambitious when the market is not as hot contrary to what one may think.

Gearing up for the Years Ahead

The market can change in a heartbeat. Some may presume that with the recent successes of the real estate market in the Philippines, it will soon be enclosed in a real estate bubble—a known distressful game changer when it comes to the local or global real estate market turf, as it occurs periodically, particularly following a land upturn.

In preparation for this economic turn, most analysts believe that the Philippines’ resilient economy can burst this bubble, as the government focuses its efforts on fixing critical aspects such as updating public infrastructure, political stability, inflation control, and maintaining low interests.

Urban developments have also implemented plans of relocation outside the capital city. Most of these investments can be seen on the nether part of Manila such as Cebu, Iloilo, and Tagaytay. These cities are believed to be where the next wave of suburban and economic growth will transpire.

Aside from these relocations, the Philippines also has its own share of tourism and hospitality treasures that were recently discovered and immediately appealed to a number of investors. For instance, PAGCOR’s Entertainment City in Parañaque, the City of Dreams, Bloomberry Corp.’s Solaire Resorts & Casino, and the Okada Group’s Manila Bay Resorts, which will be launched in the coming years.

According to PAGCOR, these entertainment properties were anticipated to attain $7 billion of gaming revenue by 2019. With a lot of these varying properties in store, more foreigners have become interested in buying these investments to set up different businesses such as manufacturing and automotive.

The country is favored by some foreign buyers to do business in for the strong macroeconomic indicators, competitive working resources, and a stable climate. The Philippines is also a welcoming place for foreigners to study, work, play, and live to their accord.

Without a doubt, the multiple foreign investments and the government’s efforts had played a huge role in the country’s urbanization. But looking at the larger picture, the private sector was the first to lead the endeavors in the advancement of constant urban revolution.

Lots of overseas Filipino workers and BPOs have bought properties to become their office and residence. These properties have provided the groundwork for most Filipinos to adapt to a new paradigm shift, a new lifestyle, and standards for living.

For these people, settling for less is not an option. Ensuring that their hard-earned money will go only to the best property investments is their best foot forward, especially in this year of 2015 where the Philippines is proven to be a huge refuge for property trades and investments.

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5 Myths About Data and Analytics That Business Owners Shouldn’t Believe

Most companies nowadays understand how important it is to collect data from a variety of sources. They know that valuable insights can be harnessed from these information that can potentially help managers and business owners to make the best decisions for their company.

However, there are also those who are wary about analyzing data because of the many misleading information about what it involves. If you are one of those who are still on the fence about data analytics, read on and see if any of the 5 myths below is what’s holding you back.

Data analytics is only for the big boys.

Many mistakenly believe that data analytics are just for enterprises and the small businesses will not benefit from it. Some small business owners also get intimidated about it because they lack the knowledge on how to do it or think that they don’t have enough data in their company to analyze. This is simply just not true.

Companies big and small need to collect and analyze data in order to grow. Even as a start-up company, you must already think about the types of data you need to collect and from which channels. Do not automatically think that you don’t have enough of it. Most companies these days record transactions in a database or an accounting system, in-house or outsourced data entry services. These data can already be interpreted and give you the results that you need.

Data analytics is only for complicated problems.

Data analytics can give your company answers to a wide variety of questions, whether they’re complicated or not. While it is true that there are many powerful analytics tools that can do more in-depth analysis, such as fraud analysis, it doesn’t mean that it can’t be used to gain insights on less complicated questions.

 

What really matters with data analytics is being able to have a good business question and have the data, the tools and the technique that will help answer the question.

Analytics takes up too much time.

Data analytics doesn’t have to take all of your time. Some marketers think it does because they think that they have to report on every single metric. However, this doesn’t have to be the case.

Before conducting the analysis, you must already set the questions you want answered. Then decide on which metrics are necessary to measure in order to get the answers that you need. Finally, figure out how to track them in your software. Knowing exactly what you need will significantly cut down the time you spend on analyzing.

You must have a mathematical background to get the job done.

Many business owners automatically think that analysis needs an extensive background in math, which immediately puts off those who don’t. While it’s true that a mathematical background would be helpful, you don’t have to be a math whiz to conduct data analytics successfully.

There are many different sources of information, such as classes or even articles online, especially geared towards beginners that can teach you the essential things you need to know. Aside from that, there are many different data analytics software available in the market these days that are easy to understand and to use. Take this visualized data for example: a UK contact lens distributor created a well-designed infographic on road safety that used relevant data for their target market.

You need to have expensive tools to conduct analysis.

This might be true for huge companies that have massive amounts of data and complicated problems to solve. However, a lot of businesses don’t really have a need for those powerful, expensive software.

The truth is, more than the software, the most important is the technique if you already have simple tools in your disposal. As long as you have data recorded in a database or a spreadsheet, a tool that can create charts and graphs is all you need assuming you already have a working knowledge of the techniques you can utilize to solve the problem.

Don’t immediately be scared by everything you hear about data analytics. Some of them, such as these myths presented above, are simply just not true. Do your research thoroughly first before you say no.

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