A fiscal representative in the Philippines is an appointed third party that handles the needed tax filings, submissions, and registrations, along with making the necessary tax payments and handling important tax communications.
The fiscal representative or tax agent can be appointed as soon as the company registration in Philippines is under way, or in any case before the company is required to submit its first submissions. The use of a representative can be common and useful both for resident companies and for foreign businesses conducting activities in the country.
While there is no mandatory requirement to appoint a fiscal representative in Philippines, this is usually the case for businesses that wish to make sure that they are fully compliant. Outsourcing the tax submission can allow business owners to better focus on important tasks such as growing their business in the Philippines, while a designated professional oversees the needed tax compliance.
Our agents specializing in company formation in Philippines give you more information about the advantages if using a fiscal representative in this article. For more information, please do not hesitate to reach out to us.
How does a fiscal representative help with tax compliance?
The fiscal representative in Philippines can assist companies with the following:
- Preparing the tax returns and other documents related to the client’s tax liability;
- Filing the tax returns as needed, by observing the submission deadlines;
- Preparing any explanatory documents, or assisting the client with objections to the tax authorities, when or of these are required;
- Representing the client in front of the Philippines tax authorities, the Bureau of Internal Revenue, in any and all issues involving the client’s tax liability (clarifications, additional submissions, various communications).
It should be noted that the activities of a fiscal representative can but do not always overlap with those of an accountant in Philippines and they do not overlap entirely. The recommended practice is to use both services, as needed for the optimal functioning of the business.
Can a fiscal representative in Philippines help with VAT registration?
Yes. In fact, this can be an important matter with which the representative can help clients. While it is not mandatory to use an appointed agent for this purpose, in practice this is a preferred method because a local agent can make the necessary submissions in an efficient manner.
When the VAT-related submissions are made by an authorized representative, the documents are also accompanied by an authorization letter confirming the appointment of the representative.
We remind company owners that VAT registration in the Philippines is mandatory when the company exceeds the registration threshold of PHP 3 million. If this is the case, a fiscal representative in Philippines will give you more information about the necessary steps.
How can companies appoint an authorized fiscal representative?
Our team also reminds investors of the most important taxes they should be aware of, before starting a business in the Philippines:
- The corporate income tax of 20% or 25%; the first, lower rate is applicable to companies with a net taxable income that does not exceed PHP 5 million and total assets that do not exceed PHP 100 million;
- The value-added tax, with a standard rate of 12% and a reduced rate of 0%;
- The social security contributions; these are calculated according to the employee’s salary bracket.
If you are interested in other matters, such as how to immigrate to Philippines, our team can also answer questions about your relocation.
Contact us if you want to know more about the fiscal representative in the Philippines.