Any business looking to establish a branch in the Philippines will do well to hire an accounting firm with local expertise. Those that fail to do so may encounter difficulties in filing the right taxes and adhering to the strict bureaucratic system. Erroneous filings will cause businesses to pay penalties and fines.
Accounts with expertise in the Philippines will help companies navigate the financial compliances and make their businesses more successful. Companies may hire a local accounting firm or look for outsourced accounting services from an independent local firm. This will make a business’s goals easier to accomplish in the Philippines while keeping finances precise and in line with local and international standards.
Foreign companies have to comply with the following Philippines tax rules and regulations:
Take Note of All Local and National Tax Laws
Business owners should take note of all the tax regulations to make sure they don’t overlook anything. Filipino accountants with at least two years of experience may provide advice about the local laws. They can explain how local taxes differ from the national level. Income taxes and the Value-Added Tax (VAT) are just some of the national requirements. The cities where foreign investors established their companies, however, also entails payment of local business tax, real property tax, and other related tax expenses.
Business Tax Laws Differ from City to City
Businesses registering branches in different cities need to follow the specific taxation guidelines specified in each locality. This law especially applies to franchises from overseas companies. Hiring expert consultants will help businesses become familiar with the tax laws in the city where the company is currently registered. Companies will be guided on the process of filing taxes correctly and lawfully.
Employee Salaries are Also Taxable
It’s not just business owners who are obliged to pay taxes. Their employees also need to file the right taxes. Foreign businesses must register all their employees to ensure deduction of the right amount of taxes. Filipino accountants may accurately compute the taxes for all the employees. Other deductions include other government-mandated tolls for Social Security, PhilHealth, and other national agencies.
Foreign companies just starting to do business in the Philippines may face confusion about how the local taxation laws work. Hiring a Philippine-based accounting firm will ensure proper implementation and submission of taxes.
Contact us today to make your accounting processes easier to carry out.