Normally, people celebrate the New Year with new year’s resolutions and (hopefully) adhering to them. For us accountants, flipping the calendar means we start with a fresh set of books and accounting records, a new year of targets, quotas, and goals, and most of all, four months of duels with various deadlines to beat.
January – Closing the Past and Starting Anew
As the new year opens, the books are closed. Year-end accruals and adjustments are done, annualizations are completed, and we are getting ready to wave goodbye to the year that was and for auditors to look at the fairness of our financial records.
After closing the books, they now must be submitted to the Bureau of Internal Revenue (BIR). The deadline of submission depends on the type of books.
Further, as provided under Revenue Memorandum Circular (RMC) No. 3-2023, all books of accounts shall be registered online with the Online Registration and Update System (ORUS), a system that will allow taxpayers to register, update, and complete registration-related transactions online. Hence, taxpayers are required to update their records with the BIR and set up an ORUS account.
January is also the month where the past and the present meet because on top of closing the books, we must pay our annual dues to both the BIR and the Local Government Unit (LGU) that have jurisdiction over us. For the BIR, taxpayers must pay P500 per branch on or before January 31, while for LGUs, generally, application and payment of business permits are done on or before January 20.
However, in the City of Davao, the processing of business permits is extended until January 31 without the imposition of penalties and interest. Another obligation with the LGU is the payment of Real Property Tax which is also generally due on or before January 31.
Taxpayers who are maintaining inventory of stock-in-trade, raw materials, goods in process, supplies – those generally involved in manufacturing, wholesaling, distributing/retailing sectors – and those service companies (e.g., construction companies) are required to submit their annual inventory list on or before January 30. RMC No. 8-2023 provides that these inventory lists should be submitted in soft copies through CD-R, DVD-R, or USB flash drives. Taxpayers must ensure that the contents in the inventory lists submitted to the BIR tally their records, especially the annual income tax returns (ITR) and audited financial statements (AFS).
For withholding agents, January is also the month that the annual information returns are prepared. Withholding agents should file BIR Form No. 1604-C (Annual Information Return of Income Taxes Withheld on Compensation) and BIR Form No. 1604-F (Annual Information Return of Income Payments Subjected to Final Withholding Taxes) and submit their corresponding alphalists on or before January 31. Employers should also provide BIR Forms No. 2316 (Certificate of Compensation Payment/Tax Withheld for Compensation Payment With or Without Tax Withheld) on or before January 31 to their employees.
February – The Least Fearsome
Accountants are already warmed up as we have now defeated the first gatekeeper of the fearsome foursome. Up next is the month with the least deadlines: February.
The only obligation of accountants – on top of the regular monthly tax filings – is the submission of the BIR Form No. 2316 of the employees which should be put in a CD-R, DVD-R, or USB flash drive on February 28. RMC No. 29-2021 provides that the authorized representatives of the employers may use electronic signatures in lieu of wet signatures to sign BIR Form No. 2316 of the employees.
Even though February only has one BIR deadline, this is also the time that the financial audits kick in. Auditors start to audit the books that were closed in January. This is also the month the tax accountants start preparing the annual ITRs.
March – The Storm Before the Calm
Just like February, March also has BIR deadline on top of the monthly tax filings which is the submission of the BIR Form No. 1604-E (Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax and the corresponding alphalist on or before March 1.
It may seem calm, but March is the month where auditors and tax accountants are in the thick of finalizing the audit and tax returns. This is the month where auditors and tax accountants work hand in hand to iron out any discrepancies in their respective deliverables – reconciling differences in revenues and expenses recognized in one but not in another, and ensuring that the records are spick and span.
April – Ready or Not, Here We Come
“Pass your papers, finished or not” is the perfect quote for this month. With 15 days left before the deadline, April is the month when accountants are barely surviving on tons of caffeine and a few hours of sleep. With the clock winding down, accountants put their pedal to the metal to beat the deadlines and avoid unnecessary penalties.
April 15 – the date accountants hate and love at the same time. Hate because this is the date that the annual ITRs are due for submission and payment, and love because at the end of this day, all the accountants’ and auditors’ hardships have come to fruition – everything is filed and paid. Hence, accountants and auditors may relax (for a while).
However, the battle is not yet fully won, especially for the financial auditors because the April 15 deadline to submit the audited financial statements is only applicable to manual filers with payment; for manual filers without payment and eFPS filers, the deadline to submit the audited financial statements is on or before April 30. Hence, auditors may only rest for a while but continue to tread for a few days’ time.
On top of the audited financial statements, other attachments to the annual ITR such as BIR Form No. 1709 (Information Return on Transaction with Related Party), Certificate of Entitlement to Tax Incentives (CETI), tax credit certificates (e.g., BIR Forms No. 2304, 2307, and 2316), Summary Alphalist of Withholding Tax at Source (SAWT), and any other attachments are due for submission on or before April 30 as well. These attachments can be submitted to their respective Revenue District Office or online through the Electronic Audited Financial Statements (eAFS) system.
On a separate note, if the taxpayer avails of the tax treaty benefits for all types of income earned by non-resident foreign entities, except capital gains, it has to file a request for confirmation (RFC) required by the BIR by April 30. Failure to do so may lead to the BIR disallowing such availment of tax treaty benefits.
Really, every accountant – especially auditors and tax accountants – goes through these four months. They build up the accountant’s character and work ethic. A busy season indeed but once done, hopefully, accountants get that much deserved rest. Until then, if you know an accountant, hug them. They need it.
