#AskTheTaxWhiz: Should professionals register with BIR?

I’m a practicing physician in our province.  Should I register with the Bureau of Internal Revenue (BIR) even if my patients don’t ask for receipts? Do I need to register a business name with the Department of Trade and Industry (DTI)?

Yes. All professionals are classified as self-employed and are required to register with BIR.  Whether patients ask for receipts or not, doctors like any other professionals must issue receipts.  As long as you have a Professional Regulation Commission (PRC) ID, practice of profession doesn’t require a business name approved by DTI. 

If I don’t have official receipts to support my expenses, can I still claim expenses to lower my tax payment? Other than official receipts, what else are considered sufficient evidence to support expenses?

Yes. There are two types of allowable deductions to lower income tax due: Itemized Deduction (ID) and Optional Standard Deduction (OSD).

If you don’t have significant expenses to claim or sufficient evidence to support your itemized deductions (expenses), you may avail of OSD, which will allow you a maximum deduction of 40% based on gross income.

Alternatively, there are other sufficient documents to support your expenses e.g., cash or sales invoice, payroll, vouchers, bank statements, debit/credit memo, among others.

I am an accountant by profession and now a housewife taking care of our children. My relatives in Singapore started referring foreign clients who need financial accounting services. Obviously, this is an extra income for our family, which will allow me to work from home. Do we have the same practice in accounting and taxation? Will I be affected by the so-called Association of Southeast Asian Nations (ASEAN) integration in 2015?

No. Regarding accounting practice, there are distinctions between the Philippine Financial Reporting Standards (PFRS), which is based on the International Financial Reporting Standards (IFRS) and Singapore Financial Reporting Standards (SFRS). 

Apart from the fact that there are differences in our tax laws, Inland Revenue Service (IRS) in Singapore is more efficient in collecting taxes and in providing taxpayer services than the BIR.

Yes. The ASEAN integration will affect all professionals and businesses in the country.  It is for this reason that the Philippine Association of the Professional Regulatory Board, in cooperation with the Professional Regulation Commission, will hold the 3rd Professional Summit from October 16 to 17, 2014 at the Manila Hotel.

The summit aims to strengthen the capacity of Filipino professionals and to ensure international alignment of education and professional practice, in preparation for the ASEAN integration next year. Medical and health, engineering, technology, business, education, and social work professionals are participating.

Join us, be informed, and be ready for the ASEAN integration 2015.

For registration call +632 735 6933 or log in to http://paprb.org/.

Got a question about taxes? #AskTheTaxWhiz! Tweet @rapplerdotcom or email us at business@rappler.com. – Rappler.com

Mon Abrea is a former BIR examiner and an advocate of genuine tax reform. He serves as chief strategy officer of the country’s first social enterprise, the Abrea Consulting Group, which offers strategic finance and tax advisory services to businesses and professionals. Mon’s tax handbook, Got a Question About Taxes? Ask the Tax Whiz! is now available in all bookstores nationwide. Follow Mon on Twitter: @askthetaxwhiz or visit his group’s Facebook page. You may also email him at consult@acg.ph.