12/14/2011

Professional, Turned-off at BIR Professional Tax

Masyadong malalaki ang mga garapata na naka-abang habang tinatahak mo ang tuwid na landas patungo sa pinapangarap mong jackpot. Habang tinatahak mo pa lang yan. Pag sakali maka-hit ka ng jackpot, may mas malaking garapata na naka-abang, kapranggot na lang makukuha mo, seriously, kung hindi ka lawless element.

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I attended BIR Professional Tax Seminar kanina. Mas malala pa ang pahirap sa atin kumpara hassle na ginawa ng PRC, magiging four times. Dahil sa corruption and inefficiency ng gobyerno, napaka-dilim ng future ng mga Brokers. Wala tayong mapakinabangan sa gobyerno, zero, as in zero, pero sila maraming mapakinabangan sa atin. Kung meron lang akong dalang Broker PRC Card kanina, ginunting ko na sa harap nila. Hindi nila na-intindihan ang operations natin. They are applying the blanket rules as if we are Medical Doctors. Goodluck na lang sa inyong lahat. I hope I have taught you well on how to survive. I will be abandoning this profession very soon. I will be revoking all my pending and current contracts with all clients and customers, completely before the end of December.

The BIR, as a garapata, is four times the size of PhilRES. Remember, you can go to jail if you practice the regulated professions without PRC license. Remember also, with or without PRC license, you can also go to jail if you practice the profession without BIR Registration as Professional. Sa PRC, one time ka lang mag renew every 3 years. Sa BIR, kailangan mo mag report sa kanila at least mga 6-times a year, bayad ka pa rin sa BIR kahit wala ka mai-declare na earnings. Grabe ang hassle and inconvenience na ibibigay ng BIR.

During the forum, ang sabi ko sa kanila, the Broker profession is not like Doctors where clients fall in line for service. Ang Broker profession, jackpot lang, once in a blue moon lang mag earn. Ang hassle dyan eh yung periodic reporting. Pag hindi ka mag report, merong ipapataw na fine and penalty sayo, bayad ka pa rin mas malaki pa pag-dating ng araw.

Pag mag report ka ng zero earning, hindi maniniwala ang examiner, maraming requirements ipapa-submit sayo, pabalik-balikin ka, patay ka sa pamasahe/gasolina, mapilitan ka mag bribe.

Ang unfair pa, pareho lang ang ceiling ng allowable representation expenses sa doctors and brokers. Unfair ang uniform ceiling kasi ang Doctors eh nasa clinic lang, pero tayo ang primary expense natin ay tripping/dining/representation.

Walang magawa ang BIR, naka-sulat na raw sa batas.

Ang kaya NINYO babaan ang license maintenance expenses ay sa AIPO expenses lang. So, pag gumawa kayo ng AIPO na garapata, wala na talagang masisipsip sa inyo, ZOMBIE na kayo, wala nang dugo.

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Basahin nyo eto sa ibaba. When you register in BIR, you will be asked, "Mam/Sir, magkano po projected earnings ninyo every year para ma-determine natin kung VAT ba kayo or NON-VAT?"

Aber aber aber, ano isasagot mo sa tanong na yan?

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Register Tax Types

A. Registration Fee (RF)
B. Income Tax (IT)
C. Business Tax: VAT or Percentage Tax

Value Added Tax (VAT) - 12% if gross annual professional fees / sale of goods is P1,919,500.00 and above; or if professional opted to become a VAT-registered taxpayer.

Percentage Tax (PT) or NON-VAT – 3% on the gross, if gross annual professional fees / sale of goods is below P1,919,500.00.

D. Withholding Taxes (WT)

Withholding Tax on Compensation (WC) - if with employees.

Expanded Withholding Tax (EWT) – if with income payment subject to EWT.

E. Other applicable taxes as may be determined by BIR.

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Note: The Professional should also register and pay the corresponding Registration Fee for each separate or distinct establishment and/or clinic/s in case of medical practitioners.

A Broker who will have various branches of place of business shall have separate BIR Registration for each branch.

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Magka-iba ang Official Receipt sa Sales Invoice. Official Receipt (for professional fees received) or Sales Invoice for sale of goods (e.g. books) which indicate the name of the professional, TIN and registered address.

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Hindi masama ang taxation. Pero masakit ang kalooban ko na kapag malalaking foreign companies na mag-start-up sa Pilipinas eh merong 5 years tax grace period. Pero tayo mga Pilipino maliliit na business, walang grace period, hina-harass tayo agad. Pag maging Senador ako, ilalaban natin na magkaroon ng grace period ang new practicing broker para ma engganyo magpa-fully-register sa PRC, HLURB, CityHall, and BIR.

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Let's say you hit Jackpot of P2Million.

Minus 50% share ng Agent sa kabila: P1,000,000

MINUS
P240,000 VAT
P600,000 Income Tax
P500 Professional Tax

Total Pay-off to BIR: P850,500

Natira sayo: P149,500

Mga ibang gastos mo pa pang City Hall Business Permit na meron ding naka-base sa gross income mo, pang CPE mo, pang license, pang hlurb, tripping, gasolina, etc etc. Now you see THE COST of being a LAW-ABIDER.

Mag Pro-Bono na lang tayo.

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Mag dag-dag tayo ng 1 Agenda sa IPORESP -- TAX EXEMPTION FOR 5 YEARS FOR NEW BROKER.

So, ang magiging new major advocacy ko ay gagawa ako ng Video for upload sa Youtube "The Costs of Acquiring and Maintaining a RESP License in Philippines". Sa consumerist advocacy na eto, dapat malaman ng bawat individual kung ano ang gagastusin niya bago siya pumasok sa sector. Dapat din malaman ng mga tao, na walang 1% ng mga licensed RESPs ay merong earnings from the service, para naman merong silang CAVEAT EMPTOR. Mahihirap na ang mga taong yan, huwag na natin pahirapan pa.

Pag sinabing "new broker", ibig sabihin ay new practicing broker, yung kompleto papers merong Principal Place of Business, PRC, HLURB, City Hall, BIR Oficial Receipts. Kasi yung mga wala nito, sabi ng BIR, dapat hindi mag operate or else ikukulong ng six months.

Ehhh yung meron, ano naman ang incentive para ma engganyo mag kompleto ng papeles? Walang ibang pwede ibigay ang gobyerno kundi tax incentive, na hindi naman forever, pwede na 5 years grace period.

Hindi fair yung pag fully registered ka, bubuwisan ka; pero yung mga ka-kompetensya mo na walang papeles eh maraming pondo pang operation kasi wala silang buwis eh dahil hindi naman talaga yan sila hinuhuli.


If there is anything else important that I forgot to include in this article, or if you experienced a real estate transaction that is anomalous, scam, fraudulent scheme that you want me to document and expose for others to be warned, or if you want to donate to the war chest of real estate consumer rights advocacy, please feel free to email me at JohnPetalcorin@Gmail.Com. If you want to comment about this article, there is a provision for this purpose that you can find below.
Thank you so much for visiting my site. May God Bless You!

6 comments:

ferdz said...

sir John,

Regarding po sa computations ninyu, bakit aakuin nyu po ang lahat taxes kung may kahati ka naman sa commission? Dapat may portion ng taxes coming from your kahati.

Ndi po ba dapat na, net of taxes ang sharing para malinis ang hatian?

lalabas sa sample mo, ang taxes mo lang ay P850.5k /2 = P425,250.

salamat po

JOHN ODONNELL R. PETALCORIN said...

The tax will still be a deduction from your gross commission regardless of the number of brokers sharing it. One broker vs 2 broker vs 3 broker, the accumulated tax deduction is the same.

ferdz said...

that's very true sir John.

But what I'm trying to point out on your example (for your readers) is ndi 149.5k lang ang natira.

as for the foreign companies you've mentioned, i have to think of it this way, if you don't give much favor sa foreign companies, how many 100% filipino-own companies can provide us salaries that we enjoy from these foreign companies?

imagine local companies lang ang nageemploy ksi turnoff ang foreign ones. baka double or triple pa ang OFW ngayon sa liit ng kita. and baka mahirapan tayu magbenta ng 1M property ksi ang liit na ng sahod ng pinoys.

JOHN ODONNELL R. PETALCORIN said...

1. Correct yang taxation calculation ko. Walang mali dyan.
2. Ano yang foreign companies na mini-mention mo? Wala akong nabanggit na "foreign companies" sa blog kong eto na title "Professional, Turned-off at BIR Professional Tax". Yung comment mo about foreign companies, pakilagay sa ilalim ng tamang blog para masagot ko sa tamang context (salamat).

Anonymous said...

I think the point of John is, based on your computation the whole tax is of the 2M is 850,500 indeed, but why is it it's only being deducted from the 1M and not from the whole 2M? If this is the case, the the tax is your least worry, maybe math and logic is.

Rltr. John R. Petalcorin said...

...neither math, nor logic. We have to pay half of the jackpot the other side who would not share the tax burden. That is the truth in real estate.