On March 3, 2014, Bureau of Internal Revenue (BIR) issued Revenue Regulation No. 4-2014 covering guidelines and policies for individual practitioners. Here are the provisions that self-employed professionals have to adhere to:
1. Register and pay the annual registration fee (ARF) with the RDO/LTDO and submit an affidavit indicating the rates, manner of billings and the factors they consider in determining their service fees upon registration and every year thereafter on or before January 31.
2. Register the books of accounts and official appointment books of their practice of profession /occupation/calling before using them and these books shall contain only the names of the client and the date/time of the meeting.
3. Register their sales invoices and official receipts (VAT or non-VAT) before using them in any transactions.
4. In cases when no professional fees are charged by the professional and paid by client, a BIR registered receipt, duly acknowledged by the latter, shall be issued showing a discount of 100% as substantiation of the “pro-bono’ service.
All existing and registered self-employed professionals are required to submit the required affidavit and register its official appointment books within thirty (30) days upon effectivity of the Regulation. The issuance took effect April 5, 2014.
However, on April 22, 2014 the Supreme Court issued TRO on RR 4-2014 covering only registered lawyers on the argument that requirement for fees disclosure will impose an “illegal restriction on the practice of law, as it unduly limits a lawyer’s liberty to ascertain the fair and reasonable value of his services”.
Triple i provides tax and accounting consulting for companies and professionals from different industries. To learn more in how to decrease your tax exposure and to comply with the BIR, please contact Triple i and get the guidance of your personal certified public accountant.
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