Dy Accounting & Law Firm

21/01/2026

‼️SEC Memorandum Circular No. 4, Series of 2026 – Key Points‼️

📍Higher Audit Threshold: Only corporations with total assets or liabilities exceeding ₱3,000,000 are required to submit audited financial statements.

📍Audit Exemption: Corporations with assets or liabilities ₱3,000,000 and below are exempt from audit.

📍New Requirement for Exempt Entities: Submission of unaudited financial statements with a notarized Statement of Management’s Responsibility (SMR).

📍Authorized Signatories:
- Regular corporations: Chairman, President/CEO, and Treasurer/CFO
- OPCs: President and Treasurer

📍Accountability: Signatories are fully responsible for the accuracy and truthfulness of the financial statements.

📍Effectivity: Applies to fiscal years ending on or after December 31, 2025.

16/12/2025

TAX TIP: Documentary Stamp Tax (DST) Reduction Under CMEPA

During the year, we have been assisting clients with corporate structuring and start-up tax planning. One thing we’ve noticed from conversations with various shareholders, bookkeepers, and accountants offering registration services: many are still using outdated DST rates.

Here’s a quick update:

New DST Rate (CMEPA Law): 0.75% (75% of 1%) on:
📍Original issuance of shares (par value or actual consideration for no-par shares)
📍Transaction value of Bonds, debentures, certificates of stock, or certificates of indebtedness issued abroad
📍Issue Price of Debt instruments (including loan agreements, promissory notes, and government securities)

✖️Old DST Rate: ₱2.00 for every ₱200.00 of par value, or fractional part thereof✖️

The new rates reduce transaction costs and improve efficiency for capital-raising and financing activities. If you’re planning share issuances, debt instruments, or restructuring transactions, this change can mean real tax savings.

If you’re unsure about your DST exposure or need guidance for your business, we’re happy to help.

Reference:
RA 12214
RR No. 19-2025

25/11/2025

The past two quarters have been a busy period for the firm, with several opportunities to share financial and tax knowledge across different sectors in the Philippines.

Last June 30, 2025, the firm took part in the PHAREX event in Iloilo City, where Atty. Dy joined a simple yet meaningful round table discussion with medical professionals. He led a session on the basics of tax compliance for doctors — whether employed, practicing independently, or both. It was an open and engaging exchange aimed at making taxation more understandable and relevant for those in the medical field. A heartfelt thank you to Pharex B-Complex, Unilab, IMC Health, and Taxumo for making the initiative possible.

In August, the firm continued this effort in Zamboanga City, where Taxumo and Vaneular invited us to speak to another group of medical professionals on Taxation for Medical Professionals. Two different cities, but the same mission: helping make tax compliance clearer and more accessible for those in the medical profession.

More recently, the firm also took part in a series of seminars hosted by PICPA CDO–Misamis Oriental, covering:

-Tax Exemption for Cooperatives
-Court of Tax Appeals Decided Cases on Cooperatives
-CPA’s Guide to Cooperative Compliance: Governance, Reporting, and Audit under RA 9520

It has been a productive stretch for the firm, and we’re grateful for the continued opportunities to support financial and taxation awareness in various communities.

25/11/2025

𝐁𝐈𝐑 𝐂𝐨𝐦𝐦𝐢𝐬𝐬𝐢𝐨𝐧𝐞𝐫 𝐌𝐞𝐧𝐝𝐨𝐳𝐚 𝐨𝐫𝐝𝐞𝐫𝐬 𝐭𝐡𝐞 𝐭𝐞𝐦𝐩𝐨𝐫𝐚𝐫𝐲 𝐬𝐮𝐬𝐩𝐞𝐧𝐬𝐢𝐨𝐧 𝐨𝐟 𝐋𝐞𝐭𝐭𝐞𝐫𝐬 𝐨𝐟 𝐀𝐮𝐭𝐡𝐨𝐫𝐢𝐭𝐲, 𝐌𝐢𝐬𝐬𝐢𝐨𝐧 𝐎𝐫𝐝𝐞𝐫𝐬, 𝐚𝐧𝐝 𝐫𝐞𝐥𝐚𝐭𝐞𝐝 𝐟𝐢𝐞𝐥𝐝 𝐚𝐮𝐝𝐢𝐭𝐬

In a joint announcement at the Department of Finance today, Finance Secretary Frederick Go and Bureau of Internal Revenue Commissioner Charlito Mendoza announced the immediate and temporary suspension of all field audits and related operations of the BIR.

“I have ordered the immediate suspension of all field audits and related operations, including the issuance of Letters of Authority and Mission Orders, effective immediately, in accordance with Revenue Memorandum Circular 107-2025. No Letter of Authority or Mission Order shall be created, printed, signed, or served during the suspension period,” detailed Commissioner Mendoza.

In his first week in office, Commissioner Mendoza convened key units of the Bureau of Internal Revenue to gain a thorough understanding of existing audit operations and to identify long-standing issues that have affected taxpayer experience and internal discipline. The suspension was issued after extensive internal consultations and was undertaken with the guidance and strategic oversight of Finance Secretary Frederick Go to ensure full alignment with national priorities on good governance, taxpayer protection, and efficient revenue administration.

“This is in response to the concerns raised by the taxpayers regarding the issuance of Letters of Authority and Mission Orders. We hear the people, we hear your concerns, and are immediately acting on them. The people deserve better,” said Secretary Go, emphasizing that the Department of Finance is committed to protecting taxpayers from potential abuse through a comprehensive review of our existing policies and procedures.

The temporary suspension applies to all BIR offices involved in audit and field operations, including the Large Taxpayers Service, Revenue Regions and District Offices, Assessment Divisions, VAT Audit Units, and Intelligence and Special Audit Units. The exceptions to RMC 107-2025 apply only to urgent or legally mandated cases such as active criminal investigations, one-time transactions, audits prescribing within six months, refund claims that require audits, or immediate action on taxpayers flagged by verified intelligence.

“This suspension is necessary to protect taxpayer rights, strengthen internal discipline, and ensure the integrity of our audit processes. We take every complaint seriously, and any misuse of authority, harassment, or irregularity has no place in the Bureau,” Commissioner Mendoza emphasized.

“All taxpayers shall be treated with the highest degree of professionalism, courtesy, and adherence to the rule of law. Our economy is built upon the contributions of our taxpayers, who deserve fair and honest tax audits,” explained Secretary Go.

Commissioner Mendoza also instructed the creation of a Technical Working Group on LOA and Mission Order Integrity and Audit Reforms to lead the reform efforts. The group is tasked with evaluating existing procedures, identifying operational and systemic vulnerabilities, recommending revised LOA protocols, and integrating digital safeguards and uniform audit standards.

“Our goal is to create processes that are predictable, evidence-based, technology-driven, and fair,” explained Commissioner Mendoza, reiterating that these systems are meant to protect taxpayers while helping the Bureau perform its mandate efficiently.

“I cannot overemphasize President Ferdinand Marcos, Jr.’s directive for the BIR to continue meeting revenue targets while strengthening service delivery for workers, small business owners, and all taxpayers who rely on predictable and transparent audit processes. The overarching directive of the President when I assumed office is to ensure efficient and fair revenue collections,” Commissioner Mendoza said to end the joint announcement.

RMC No. 107-2025: https://tinyurl.com/bdynx69h

25/06/2025

🚨 BIR System Update: eSales is Back Online! 🚨

The BIR has officially announced that the eSales system is now up and running as of June 23, 2025.

🔔 In line with this, please be reminded that the deadline for submitting your May 2025 sales data via eSales is on or before June 26, 2025 (within 3 working days from system restoration).

📌 To recall: The BIR previously issued a tax advisory on June 9, 2025, stating that no penalties shall be imposed for the delayed submission due to system downtime for sales report for May 2025.

However, submission must be completed within 3 working days after the system becomes available.

✅ Don’t wait until the last minute—submit your sales report now to avoid any issues!

16/06/2025

📢 Important Update on RMC 58-2025!

1️⃣ The deadline for registration of Non-Resident Digital Service Providers (NRDSPs) has been extended until July 1, 2025.

2️⃣ Purchases of digital services will continue to be subject to VAT starting June 2, 2025.

Stay informed and compliant! For questions, feel free to reach out to us.

05/06/2025

30/05/2025

📌ACCRUAL VS. CASH BASIS

We’ve noticed that many small business owners in online tax and accounting communities continue to struggle with understanding the difference between the Accrual Method and the Cash Basis of accounting. This topic has regained attention due to the recent Ease of Paying Taxes (EOPT) Law, which mandates that the Bureau of Internal Revenue (BIR) follow the Accrual Basis of Accounting for taxation—even for service-oriented businesses.

📚A Quick Background:
✔️Accrual Basis of Accounting – Income is recognized when it is earned, regardless of whether payment has been received.
✔️Cash Basis of Accounting – Income is recognized only when payment is received, even if the service has already been rendered.
✔️Principal Receipts – These are income-triggering documents, now referred to as invoices.
✔️Supplemental Receipts – These support the principal receipts. For example, in the sale of goods on credit, a Charge Invoice (principal receipt) is issued upon the sale. Upon payment, a Collection Receipt or Acknowledgment Receipt (supplemental receipt) is then issued.

📅Prior to the EOPT Law:
✔️Sales of goods were already subject to the accrual basis. This means that once goods were sold, bartered, or exchanged, a Charge Invoice was issued—even if no payment had yet been made.

✔️Service-oriented businesses, on the other hand, issued Official Receipts only upon receiving payment, not when the service was rendered.

📅Under the EOPT Law:
✔️Official Receipts are no longer considered principal invoices but are now classified as supplemental receipts.
✔️Whether selling goods or services, businesses must now issue an Invoice, Service Invoice, or Charge Invoice once the income is earned, regardless of whether payment has been received.

💡Why Is This Important?
Because once you issue an invoice, you are liable for Income Tax, VAT, or Percentage Tax (whichever applies), as of the date of that invoice. ~ For example, if you issue an invoice dated December 25, 2024, you are liable for the applicable taxes for that period, even if the client pays in 2025.

While this change has little impact on businesses engaged in the sale of goods (since they were already using the accrual basis), it significantly affects service providers who must now recognize income and pay the corresponding taxes as soon as the service is rendered—not when it is paid.

📣A Note to Small Business Owners:
Most small businesses naturally practice cash basis accounting, as it is simpler and centers on actual cash flow, which is often the main concern for very small enterprises. However, with the implementation of the EOPT Law, it’s important for small business owners to start learning about accounting methods and how these affect their operations and obligations.

📘Being aware of your accounting method not only ensures compliance but also helps you:
📘Make informed business decisions
📘Understand your true financial standing
📘Monitor performance beyond just cash availability
📘Communicate effectively with bookkeepers or accountants

If you're relying solely on bookkeepers for tax filing and accounting, it's all the more important to understand the basics so you can properly oversee your business and plan ahead.

Sources:
RA11976 - EOPT LAW
RR 3 - 2024

Disclaimer: This post is for general information and discussion purposes only. It should not be considered as a substitute for professional advice.

29/05/2025

Exciting News!

We’re proud to announce our firm’s official partnership with Taxumo!

Through this collaboration, our CEO is now available for consultations via Taxumo’s Partner Services platform. We're also working on expanding the services we offer on the platform — including business registration, assurance services, and more — to better serve entrepreneurs and businesses in the near future.

All tax problems can be solved! 💯✊

Consult with our newest tax partner, Atty. Getty!
👉 txmo.co/consult/atty-getty

28/05/2025

‼️ RA 12023 Warning: Filipino Businesses Now Liable for Remittance of VAT on Digital Services ‼️[REVERSE CHARGE MECHANISM FOR VAT]

First, some key terms:
NRDSPs – Non-Resident Digital Service Providers (think Canva, AWS, ChatGPT, Cloudfare — platforms you use but are based outside the Philippines)

The BIR is now requiring non-resident digital service providers (NRDSPs) to register for VAT and charge 12% on sales of digital services consumed in the Philippines under RA12023.

But here’s the catch:
If you’re a business buyer, YOU — NOT THE NRDSPs — are responsible for remitting the VAT.

This setup is known as the reverse charge mechanism.

Here’s how it works:

You subscribe to Chatgpt, Cloudfare, or any other NRDSP for ₱100/month as part of your business operations.

Since you're using the service for business, and the provider is NRDSP ~ they won’t collect the VAT from you.

Instead, the burden is shifted to you, the business owner.

You’re required to:
• Compute 12% VAT (₱12)
• File BIR Form 1600-VT
• Prepare the Monthly Alphalist of Payees (MAP)
• Pay the VAT to the BIR

📅 Deadline: Every 10th of the following month
📌 Invoice from them? Not required
📅 The RR comes into effect June 2, 2025

Important: This only applies to B2B (business-to-business) transactions — where the buyer is engaged in trade or business in the Philippines.
It does not apply to B2C (business-to-consumer) transactions — for example, if you’re using Netflix or Canva purely for personal use at home, no VAT remittance is required.

📌 Does it go against the principle of administrative feasibility in taxation??

Instead of simplifying compliance, the reverse charge mechanism adds another layer of responsibility — especially for small business owners who are already overwhelmed with tax requirements, often without access to in-house accountants or tax advisers.

At the end of the day, this rule places a complex tax obligation on businesses that may not even be aware of it — and that’s where fairness becomes questionable. Hoepfully the BIR addresses this burden and somehow creates specific guidelines before its full scale implementation.

Sources:
RMC No. 47-2025
RR No. 3-2025

27/05/2025

💡 DID YOU KNOW?
Under the Ease of Paying Taxes Law (RA 11976), there are new taxpayer classifications — and some now enjoy lower penalties!

📊 Taxpayer Categories:
• Micro: Less than ₱3M Gross Sales
• Small: ₱3M to less than ₱20M
• Medium: ₱20M to less than ₱1B
• Large: ₱1B and above

✅ Micro & Small Taxpayers enjoy reduced penalties under Section 45:

• Section 248 (Civil Penalties - Surcharge): Now only 10%
• Section 249 (Interest): Based on the legal interest rate Only 6%
• Section 250 (Failure to File Info Returns): Only ₱500 per failure

📌 Less burden. More ease. Know your classification and save on penalties!

22/05/2025

📊 Accounting Insights

Businesses in the Philippines must follow the accounting standard that applies to their type and size when preparing their financial statements. Using the correct standard is essential to staying compliant and ensuring accurate and reliable financial records.

Here are some of the most common standards:

1️⃣ Full Philippine Financial Reporting Standards (PFRS)
2️⃣ PFRS for Small and Medium-sized Entities (SMEs)
3️⃣ Philippine Financial Reporting Framework for Small Entities (SEs)
4️⃣ Philippine Financial Reporting Framework for Cooperatives

Each has specific rules depending on your business type and size. Need help figuring out which one fits your business? Send us a message — we’re here to guide you!