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Rosben Orbeso Murillo, CPA

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Studied at Saint Paul School of Professional Studies
Work Experiences:
Taught both Accounting and Taxation for more than six (6) years.
Former Tax CPA reviewer at SPSBL CPA review center.
Rosben Orbeso Murillo, CPA
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There are quite numbers of business in the Philippines that were subject to tax mapping penalties because of violations. I’m sure you don’t want to pay an extra amount of cash to the BIR because you didn’t read this. This article provides different BIR tax mapping violations and the amount of penalties. Here are things that you must know before the tax mapping occurs in your area. Make sure to read this to avoid compromise penalties and criminal liability. Let’s start to know what is tax mapping in the Philippines.

What is Tax Mapping Meaning?

What is tax mapping? Or what exactly is the meaning of this tax mapping? Well, it is a surprise visit of the BIR staff to the establishment. The objective of this tax mapping in the Philippines is to inspect compliance of business registration and other rules and regulations of the Bureau of Internal Revenue. It is also commonly known as BIR tax compliance or “Oplan Kandado”.

This tax mapping BIR will help them to monitor and to identify those owners who are evading from paying taxes.  Do you know what will happen if you will be caught that your business is not legally complying the requirements? Let’s know the tax mapping system.

Tax Mapping System Philippines

Any BIR representative does this tax mapping at random dates and places. Non-compliance with the BIR regulations is subject to the penalty from one thousand pesos (1, 000) up to fifty thousand pesos (50, 000) depending on the nature of violations.

Some non-compliance to the regulation will lead to a permanent closure of the business establishments and imprisonment of the owner.

BIR Tax Mapping Violations

During the tax mapping, the BIR staff follow tax mapping checklists. If the BIR conducts tax mapping in your area make sure you’re fully aware of these BIR tax mapping violations.

BIR Registration Requirements:

  1. Not Register with BIR
  2. Failure to pay the annual fee registration fee  (BIR Form 0605) and not visible in your business facilities.
  3. The sign or poster “Ask for BIR receipts” is not properly placed in your business are.
  4. No Certificate of Registration and Notice to the Public displayed

BIR Invoicing Requirements

  1. Refusal to issue receipts or sales invoices
  2. Issuing unregistered receipts or invoices to the clients. If you were value-added tax registered can you still issue your vat registered receipt? Yes, you can still issue this vat registered receipts even you’re no longer qualify as a vat registered. To learn more read this VAT Invoices Update under Train Law 2018. 
  3. Not issuing official receipts or sales invoice.

Other BIR Tax Mapping Violations

  1. Failure to withhold or remit withheld taxes at the time or times required by law or regulations
  2. Failure to file and or pay any internal revenue tax at the time or times required by law or regulations
  3. Failure to keep or preserve records required by law or regulations

Tax Mapping Penalties in the Philippines

Subject to Compromise Penalties

  • Failure to pay the annual registration fee or to display in the business is subject to 1,000 per year or during the tax mapping.
  • Failed to secure a certificate of registration and notice to the public display, failure to display the sign “Ask for BIR Receipts” are subject to 1,000 during tax mapping
  • Failure to register the business with BIR is subject to according to the location. 20, 000 for cities; 10, 000 for 1st class municipalities; 5, 000 for 2nd class municipalities, and lastly is 2, 000 for 3rd class municipalities.
  • Refusal to issue receipts or sales invoices and issuance of unregistered receipts are subject to 25, 00 for the first offense and 50, 000 for the second offense.
  • Failure to issue receipts or other invoices is subject to 10, 000 for the first time and 20, 000 for the second time.

Subject Criminal and Compromise Penalties

Failure to make/file/ submit any return or supply correct information at the time or times required by law or regulations. This violation is subject to a fine not less than 10, 000 and imprisonment of not less than one (1) year but nor more than ten (10) years. For the amount, compromise is determined based on the gross sales, earnings or receipts, or gross estate or gift. Here is the tax table for compromise penalties.

ExceedsBut does not exceedCompromise
P     x x xP   5,000P   1,000
5000100003000
10000200005000
200005000010000
5000010000015000
10000050000020000
500000100000030000
1000000500000040000
5000000x x x50000

Failure to make/file/submit any return or supply correct information at the time or times required by law or regulation. It is subject to a fine of not less than P10,000 and imprisonment of not less than one (1) year but not more than ten (10) years.
ExceedsBut does not exceedCompromise
P     x x xP   50,000P   1,000
500001000003000
1000005000005000
500000500000010000
50000001000000015000
100000002500000020000
25000000x x x25000

Failure to File Certain Information Returns. If certain information was intentionally or willfully neglected is subject to 1,000 fines for each failure but should not exceed 25, 000 within a calendar year. Fore more BIR violations, click this link:https://www.bir.gov.ph/index.php/penalties.html


How to Avoid Penalties During Tax Mapping?

To avoid penalties during the tax mapping, you need to review these checklists.

  1. Make sure your business is not illegal in the BIR.
  2. Make your registration documents visible these are BIR Certificate of Registration (BIR Form 2303), Notice to the Public “Ask for Receipts” signage and lastly, the Annual Registration Fee (BIR Form 0605)
  3. Always pay the annual registration fee on or before January 31st of each year.
  4. Register your Cash Registered Machine (CRM) or Point of Sales Machine (POS) to the Bureau of Internal Revenue (BIR).
  5. Attach the original authorization sticker to any devices your business.
  6. Use prescribed manuals or invoices by the BIR.
  7. Make sure to issue receipts or invoices for every transaction.
  8. Maintain a registered book of accounts and record the business transactions
  9. Pay regularly the taxes monthly, quarterly and annually, including those withholding taxes from the employees and other withhold taxes.


Conclusions

Therefore, in just a few minutes, you were able to avoid paying less than fifty thousand pesos for BIR penalties. Compliance with the BIR regulations will help us to save a more significant amount of money that was having tax evasion. You might wonder, is your business needs to register in the BIR?

If you have any experiences of tax penalties during tax mapping, we’re happy to hear it. If have any questions above, drop your questions below, and we’ll be happy to help you. If we’re missing something, we’ere open to hearing your thoughts. Don’t forget to share and rate this article.

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