According to Section 13 of Revenue Regulations No. V-1, otherwise known as the Bookkeeping Regulations,
Persons required by the laws to pay internal revenue taxes on business shall keep, in addition to the other books and records, a book of inventories.
But not all taxpayers, bookkeepers, and accountants know that.
They will just know that if the taxpayer decided to close his/her business.
Not filing of Inventory List will not only cause you delay.
It will cause you penalties amounting P1,000 – P25,000 per year.
And even though you already paid the penalties,
you still need face the hassle of preparing and submission of inventory list before you can close your business.
And this is because of simply not knowing the importance of submission Inventory list.
If you want to know how to comply with Submission of Inventory List, this free guide is for you.
After reading this guide, you will learn:
1. What is Inventory List?
2. Who are required to submit Inventory List?
3. When is the Deadline of Submission of Inventory List?
4. Where to Submit Inventory List?
5. What are the Prescribed Format in Submission of Inventory List?
6. What are the Penalties when it comes to Non-Compliance of Inventory List?
1. What is Inventory List?
Inventory List is composed of maintaining inventory of stock-in-trade, raw materials, goods in process, supplies and other goods of companies.
The said schedules/list should be reconciled with the amount declared in the financial statements and annual income tax returns.
2. Who are required to submit Inventory List?
All taxpayers with tangible asset-rich balance sheets, often with at least half of their total assets in working capital assets, like accounts receivable and inventory, shall submit inventory list.
This shall cover companies such as manufacturing, wholesaling, distributing/retailing sectors including real estate dealers/developers, service companies, e.g. construction companies, building contractors, etc.
3. When is the Deadline of Submission of Inventory List?
Filing of Inventory List shall be submitted every 30th day following the close of the taxable year.
This is usually filed on or before Jan. 3 to 30.
4. Where to Submit Inventory List?
The inventory lists as well as other applicable schedules are to be submitted with the concerned Revenue District Office (RDO) where non-large taxpayers are registered.
And with the Large Taxpayers Assistance Division (LTAD), Excise Large Taxpayers Regulatory Division (ELTRD), Large Taxpayers Division (LTD) Makati and Cebu,
For taxpayers classified as large under Large Taxpayers Service.
5. What are the Prescribed Format in Submission of Inventory List?
If you’re required to submit Inventory List, here are the things you need to submit.
A. Annex A / B / and/or C
B. Annex D
C. DVD-R
A. Annex A – C of RMC No. 57-2015
a. Annex A of RMC No. 57-2015 for Retail and Manufacturing Industry
b. Annex B and B-1 of RMC No. 57-2015 for Real Estate Industry
c. Annex C of RMC No. 57-2015 for Construction Industry
The taxpayer need to submit a notarized certification, duly signed by the taxpayer that the data/information contained in the DVD-R are true and correct.
C. DVD-R
Hard and Soft copies of the inventory list including other applicable schedules shall be stored/saved in Digital Versatile Disk-Recordable (DVD-R)
The DVD-R shall be properly labeled.
6. What are the Penalties when it comes to Non-Compliance of Inventory List?
A. For Failure to make, file or submit
P1,000 for each information return, schedule, report, sworn statements, certification and other document not made, filed or submitted, or for each record not maintained.
B. For Failure to Supply Correct and Accurate Information
Graduated penalties ranging from P1,000 – P25,000 depending on the amount of gross sales, receipts or Inventories.
The aggregate amount to be imposed for such failures during a calendar year shall not exceed P25,000.
References
A. Submission of Inventory List and Other Reporting Requirements (RMC No. 57-2015)
B. Revised Schedule of Compromise Penalty (Annex A of RMO No. 7-2015)
What’s Next?
D. If you have questions and comments regarding tax, accounting, and business registrations, you can Contact us here.
