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Tax Accounting for NonVAT taxpayer, When, how to record sales to NonVAT buyers value added tax acctg

0 Views· 11/26/23
Aryel Narvasa
Aryel Narvasa

Call 09173071316 or 09088807568
Tax accounting is a huge part of the modern economy anywhere around the globe. However, there are more than meets the eye in accounting tax matters as the following shows. Not many companies, organizations and small businesses realize how critical accounting software can help in accounting and tax services or that it make things easier, fast and efficient in the accounting tax process.

The Meaning of Tax Accounting
Tax accounting refers to those accounting methods and processes geared and focusing on taxes. Largely, the IRC (Internal Revenue Guide) governs the issues of accounting tax by laying out guidelines and rules on how tax returns are to be prepared by persons and companies. In general terms, tax accounting is basically accounting with an aim of meeting the requirements of local and national tax law and expectation. Whether one is exempted from tax payment or not one way or the other they must engage in accounting tax. Tax accounting is critical in the tracking of funds related to business entities and people.
in taxable incomes largely distinct from what's reported by a business or individual's statement of income. Distinction is largely based on the fact that rules on taxes on a nation might delay or catalyze the incorporation of specific expenses that should be incorporated over the reporting period. The differences are not permanent considering settlement of liabilities will be done and assets recovery completed ending the differences.

Tax and accounting services are handled by those accountants who've decided to specialize in taxation on its entirety. Tax accountants work with corporations or individual people to handle audits, financial records and reports and overall tax matters.

It's also worth noting that even when companies are exempted from tax, ensuring tax accounting has taken place is important; they still must ensure annual returns are filed. All details on income funds need to be offered, from donations to grants including the way the funds were utilized in the operations of the business or organization.An assessment is formalized through the issuance of the formal assessment notice (FAN), which must be protested within 30 days from its receipt. Otherwise, the FAN shall become final and executory. The BIR can then enforce collection by issuing a warrant of distraint/garnishment.

However, for an assessment to be valid, the corresponding assessment notice must be properly served and received by the taxpayer. This is in accordance with Section 228 of the National Internal Revenue Code, which provides that the taxpayer shall be informed in writing of the law and the facts on which the assessment is made; otherwise, the assessment shall be void. The assessment regulations (i.e., Revenue Regulations No. 12-99) explicitly require “the written details on the nature, factual and legal bases of the deficiency tax assessments.”

In a July 24, 2017 case docketed as CTA EB Case No. 1444, the Court of Tax Appeals (CTA) struck down a deficiency tax assessment on the basis that the taxpayer did not receive the assessment notice. In the said case, the taxpayer did not get the assessment notice since it was addressed and delivered to the taxpayer’s old address. Under existing jurisprudence, in case of denial of receipt of the assessment notice by the taxpayer, the BIR has the burden to prove that such assessment was indeed received by the taxpayer. In this case, the court noted that the BIR failed to prove that the taxpayer had received the assessment notice.

Citing a Supreme Court decision, the CTA stated that if the BIR was already aware of the new location of the taxpayer, even in the absence of any formal application for change of address, it cannot simply pretend lack of knowledge of the change of address and is bound to send any issuance/notice to the taxpayer’s new location. Without receipt of the assessment notice, the Court ruled that the taxpayer was deprived of due process as required under Section 228 of the Tax Code. Consequently, the assessment is deemed null and void. The CTA decision, in this case, reminds us of the importance of due process, particularly in the proper service of an assessment notice. Compliance with the requirements of Section 228 of the Tax Code is not merely a matter of formality; it is a mandatory substantive requirement. The precepts of due process dictates that every taxpayer must be accorded the opportunity to produce evidence on its behalf based on the factual and legal grounds indicated on the assessment notice.

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