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Audit approach overview
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Annual and short period audit
At P&A Grant Thornton, we provide annual and short period financial statement audit services that go beyond the normal expectations of our clients. We believe strongly that our best work comes from combining outstanding technical expertise, knowledge and ability with exceptional client-focused service.
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Review engagement
A review involves limited investigation with a narrower scope than an audit, and is undertaken for the purpose of providing limited assurance that the management’s representations are in accordance with identified financial reporting standards. Our professionals recognize that in order to conduct a quality financial statement review, it is important to look beyond the accounting entries to the underlying activities and operations that give rise to them.
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Other Related Services
We make it a point to keep our clients abreast of the developments and updates relating to the growing complexities in the accounting world. We offer seminars and trainings on audit- and tax-related matters, such as updates on Accounting Standards, new pronouncements and Bureau of Internal Revenue (BIR) issuances, as well as other developments that affect our clients’ businesses.
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Tax advisory
With our knowledge of tax laws and audit procedures, we help safeguard the substantive and procedural rights of taxpayers and prevent unwarranted assessments.
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Tax compliance
We aim to minimize the impact of taxation, enabling you to maximize your potential savings and to expand your business.
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Corporate services
For clients that want to do business in the Philippines, we assist in determining the appropriate and tax-efficient operating business or investment vehicle and structure to address the objectives of the investor, as well as related incorporation issues.
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Tax education and advocacy
Our advocacy work focuses on clarifying the interpretation of laws and regulations, suggesting measures to increasingly ease tax compliance, and protecting taxpayer’s rights.
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Business risk services
Our business risk services cover a wide range of solutions that assist you in identifying, addressing and monitoring risks in your business. Such solutions include external quality assessments of your Internal Audit activities' conformance with standards as well as evaluating its readiness for such an external assessment.
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Business consulting services
Our business consulting services are aimed at addressing concerns in your operations, processes and systems. Using our extensive knowledge of various industries, we can take a close look at your business processes as we create solutions that can help you mitigate risks to meet your objectives, promote efficiency, and beef up controls.
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Transaction services
Transaction advisory includes all of our services specifically directed at assisting in investment, mergers and acquisitions, and financing transactions between and among businesses, lenders and governments. Such services include, among others, due diligence reviews, project feasibility studies, financial modelling, model audits and valuation.
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Forensic advisory
Our forensic advisory services include assessing your vulnerability to fraud and identifying fraud risk factors, and recommending practical solutions to eliminate the gaps. We also provide investigative services to detect and quantify fraud and corruption and to trace assets and data that may have been lost in a fraud event.
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Cyber advisory
Our focus is to help you identify and manage the cyber risks you might be facing within your organization. Our team can provide detailed, actionable insight that incorporates industry best practices and standards to strengthen your cybersecurity position and help you make informed decisions.
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ProActive Hotline
Providing support in preventing and detecting fraud by creating a safe and secure whistleblowing system to promote integrity and honesty in the organisation.
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Accounting services
At P&A Grant Thornton, we handle accounting services for several companies from a wide range of industries. Our approach is highly flexible. You may opt to outsource all your accounting functions, or pass on to us choice activities.
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Staff augmentation services
We offer Staff Augmentation services where our staff, under the direction and supervision of the company’s officers, perform accounting and accounting-related work.
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Payroll Processing
Payroll processing services are provided by P&A Grant Thornton Outsourcing Inc. More and more companies are beginning to realize the benefits of outsourcing their noncore activities, and the first to be outsourced is usually the payroll function. Payroll is easy to carve out from the rest of the business since it is usually independent of the other activities or functions within the Accounting Department.
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Our values
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Global culture
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Learning & development
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Global talent mobility
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Diversity
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In the community
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Fresh Graduates
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Experienced hires
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Streamlined guidelines, procedures
30 Dec 2020Transfer Pricing has long stayed in the consciousness of Philippine companies as the BIR stepped up the enforcement of transfer pricing rules and augmented the pace of incorporating transfer pricing examinations in the regular BIR audits.
Amid the pandemic, the BIR has issued Revenue Regulations (RR) No. 19-2020 last July 2020, requiring the submission of a three-page Information Return on Related Party Transactions or RPT Form (BIR Form No. 1709), to be attached, together with supporting documents, to the Annual Income Tax Return (AITR). This BIR Form will be used as a reference in choosing which company will be subjected to transfer pricing investigation by the BIR.
To take into account the mandate of the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 especially during the COVID-19 pandemic, the BIR recently issued Revenue Regulations (RR) No. 34-2020 to lay out the streamlined guidelines and procedures in the submission of BIR Form No. 1709 (Information Return on Related Party Transactions [RPT]) and its required attachments including transfer pricing documentation (TPD).
This basically means that only those taxpayers who have met the criteria detailed below will be required to submit the BIR Form 1709 and its mandatory attachments.
Submission of BIR Form 1709
Only the following taxpayers will now be required to submit the BIR Form No. 1709:
1. Large taxpayers; OR
2. Taxpayers enjoying incentives, i.e. BOI- and PEZA-registered enterprises enjoying Income Tax Holiday or subject to preferential tax rate; OR
3. Taxpayers reporting net operating losses for the current taxable year and immediately preceding two (2) consecutive taxable years; OR
4. A related party which has transactions with taxpayers enumerated above. Key management personnel are no longer required to submit BIR Form No. 1709.
Submission of TPD and other supporting documents
The preparation and submission of TPD is required only for the above taxpayers who are covered by the submission of BIR Form No. 1709 (see above-mentioned) and who meet the following criteria:
a) Annual gross sales/revenues for subject taxable period exceeds P150,000,000 and the total amount of related party transactions with foreign and domestic related parties exceeds P90,000,000.
In computing the threshold, the following are included:
- Amounts received and/or receivable from related parties or amounts paid and/or payable to related parties during taxable year but excluding compensation to key management, dividends and branch profit remittance.
- Outstanding balances of loans and non-trade amounts due from/to all affiliates OR
b) Related party transactions threshold:
- If involving sale of tangible goods, the aggregate amount exceeds P60,000,000 within the taxable year;
- If involving service transaction, interest payment, use of intangible goods or other related party transactions in the aggregate amount exceeds P15,000,000 within the taxable year OR
c) If TPD was required to be prepared during the immediately preceding taxable period for exceeding (a) or (b) above.
The TPD and other supporting documents to the BIR Form 1709 are no longer required to be attached to the form. However, these are required to be submitted within 30 calendar days (subject to non-extendible period of 30 days based on meritorious grounds) upon receipt of request from the BIR pursuant to a duly issued Letter of Authority covering all internal revenue taxes.
Taxpayers who are not covered by the submission of BIR Form No. 1709 and supporting documents are required to disclose in the Notes to Financial Statements that they are not covered by the requirements of preparation and submission of BIR Form 1709, TPD and other supporting documents.
Amendments to simplify BIR Form 1709
The following are the key changes in the December 2020 version of BIR Form 1709:
- Transactions with key management personnel and the reporting entity are no longer required to be reported in BIR Form 1709.
- Related party transactions are categorized per type rather than per related party.
- The taxpayer shall disclose whether they prepared a TPD for the related party transactions as prescribed under Revenue Regulations No. 2-2013.
We expect further developments and updates on this matter as the BIR tries to catch up with the global practice in transfer pricing compliance. As such, taxpayers must keep an eye on these developments to avoid non-compliance resulting to penalties.
Carl Adrian R. Grengia is an Associate of the Tax Advisory and Compliance at the Cebu branch of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory, and outsourcing firms in the Philippines with 24 Partners and more than 900 staff members. We’d like to hear from you! Tweet us: @GrantThorntonPH, like us on Facebook: P&A Grant Thornton, and email your comments to carl.grengia@ph.gt.com or pagrantthornton@ph.gt.com. For more information, visit our website: www.grantthornton.com.ph
As published in Mindanao Times, dated 30 December 2020