Have you ever heard of BIR form 2550q? Well, it should be familiar if you are an individual involved with a business or trade. Responsible tax payers take time in learning the process aside from the basics of the tax system in the country. In every good or service enjoyed by a citizen, a Value Added Tax (VAT) is imposed upon it. That’s why a good know-how of VAT is essential in filing the appropriate return as a citizen.
What is VAT?
Consumers often notice in sales receipts that their purchase is VAT-inclusive. This is the certain amount that’s added to the base rate of a good or service. This Value Added Tax, according to the Bureau of Internal Revenue (BIR), is a form of indirect tax that consumers pay for enjoying goods and services.
In a nutshell, for every P100 paid by citizens through taxes, P40 goes to the local government and P60 to the national government. So that is how important VAT is to our country. And paying is simply complying to the rules and regulations set by the state.
In our country, the 12% rate of VAT is imposed on all goods, properties and services offered. Export sales and other zero-rated sales fall under the 0% rate.
A VAT Taxpayer
If you are on the business side of things, being a registered VAT taxpayer is a must. Those who satisfy these following conditions should register right away:
- Any individual involved in any business selling goods or services (subject to VAT). Annual gross sales should exceed P1,919,500.
- Any individual who isn’t VAT-exempt but failed to register
- Any person engaged in importing goods
Registering as a VAT Taxpayer is not that complicated. You just need to fill up BIR Form 0605 and pay the P500 fee. Afterwards, you then register books of accounts then secure Authority to Print. Lastly, invoice and official receipt booklets are registered.
Responsibilities of a VAT Taxpayer
Being a VAT Taxpayer does not end simply at registering. One needs to display the Certificate of Registration at the business place. Aside from that, the individual must issue invoices and official receipts for every sale, lease or barter of goods, properties and services. Books should be kept and updated.
Most importantly, filing a VAT return is required. In this case, quarterly using BIR Form 2550q. Finally, annual registration is required not later than January 31 for P500.
The 2550q form
So since you already have an idea of the importance of VAT, it is only apt to know more about the BIR 2550q form. For experienced VAT-registered businessmen, filing VAT Returns may be monthly or quarterly. Those who opt for the quarterly filing, the 2550q form is used.
The Quarterly Value-Added Tax Return is a sales tax imposed in exchange for goods and services in the country. Individuals/businessmen who sell/lease goods and services which are subject to VAT and if their actual gross sales/receipts exceed up to P3,000,000.
When to file?
Paying taxes just like any ordinary working citizen has a date to look after to avoid penalties and charges. Filing form 2550q has a deadline set not later than the 25th day following the end of the quarter.
Where to file?
For safety, it is suggested that individuals must only transact at authorized banks or agents. Filing the 2550q form entails filing it at any Authorized Agent Bank (AAB) within the jurisdiction of the Revenue District Office(RDO). In the event that AABs are not found in the region, filing must be done with the Revenue Collection Officer. Or, one can opt in transacting with a duly Authorized City or Municipal Treasurer within the revenue district.
With regards to payments, AABs are the ones that transact with each individual. the BIR-prescribed deposit slip is then validated and becomes your proof of payment. A machine validation shows the date, amount and transaction codes present. The branch code, name of the bank, as well as the teller’s code and initials also reflects into your evidence of payment.
Don’t get penalized
To be early is way better than not coming on time, right? And that’s how it is in the tax world. Once you miss and do not comply with the Code’s rules, that would mean penalty fees and even face a criminal case. That’s why filing on time is important so that you would encounter less stress in life.
A 25% surcharge is imposed if any individual fails to file and pay the total amount of the tax or installment on or before prescribed due date. Those who file with a person other than the one required will also pay this surcharge. This also applies to individuals who fail to pay the deficiency tax within the said time period.
For those who willingly neglect to file and pay within the time period, he or she will be subject to a 50% surcharge. Individuals who commit fraud and submit fake documents will also be penalized a 50% surcharge.
If there is any unpaid amount of tax starting from the date prescribed for its payment up to when it is paid in full, a 20% interest rate per annum will be placed. Those who do not submit to the rules and regulations of the BIR will be subject to a criminal penalty. Fines will be charged as well as a possibility for imprisonment.
What to bring?
To make things easier, always remember to prepare essential identification and documents together with the appropriate BIR form. For filing 2550q, be sure to have this with you before submission:
- Duly-issued Certificate of Creditable VAT Withheld at Source (if applicable only)
- Duly-approved Tax Debit Memo
- Duly-approved Tax Compliance Certificate
- Proof of payment and the return if previously filed
- Authorization letter if not filed personally
After going through this blog, there may be so much to digest at first glance. But once you get familiarized with tax terms, everything will be a breeze. Most especially if you let our experts guide you along the process. We offer forms and assistance on filing the 2550q to make tax-filing a positive experience for anyone.