Accountants’ fearsome foursome

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. Yearend 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.

• Loose-Leaf Books of Accounts – taxpayers must submit the bound books to the BIR on or before January 15. An affidavit should also be prepared indicating the type of books, number of pages, and volume of books submitted.

• Computerized Books of Accounts (CBA) – taxpayers must submit their books in CD-R, DVD-R, or Universal Storage Bus (USB) flash drives on or before January 30.

• Manual Books of Accounts – contrary to old practice, taxpayers need not submit the manual books of accounts and purchase a new set at every start of the year. The registration of manual books of accounts shall only be at the time when the pages of the previously registered books have been exhausted.

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-intrade, 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