Online Sellers Taxes: A Guide and Important Things to Know

So I’ve been reading through a lot of online seller groups and there were a lot of questions on online sellers taxes.

My friend Welly and I are starting this online selling business and we’re just waiting for our samples before we start production. But feel free to pre-order.

So going back to these online seller groups, I’ve noticed that there are a lot of questions on online seller taxes. Not surprised, actually. Discussing about online sellers taxes is quite a complicated topic, and you actually get a lot of confusing answers.s

I’ve seen a lot of answers from random people in the group, and I know they mean well, but some are still quite confusing. So let me answer some of these questions that I see in these groups for you. For full disclosure, I am not a CPA. I am a business owner like you, as well, but since 2016, my company, Taxumo, has been in the forefront of helping MSMEs and self employed professionals with understanding, filing and paying their taxes and being compliant.

So in the close to 8 years that we’ve been in business, we have understood and confirmed a lot of things with the BIR. Taxumo, as an accredited tax software provider, has also helped cascade information about the new rules and regulations shared by the Bureau of Internal Revenue.

Okay, so now that you know who we are and what we do, let’s deep dive into the common questions that I see from online sellers. Get ready for a long post since we’ll try to cover a lot of stuff from online sellers registration process to online sellers taxes.

How do I register? Do I register as a sole prop? Do I need a Municipal Hall or Mayor’s permit to be able to do business?

Paano ba ako magreregister? Mag-reregister ba ako as a Sole Prop? Kailangan ba ng Mayor’s Permit?

For online sellers, BIR requires them to register as a sole proprietorship business. To register as a sole proprietorship, you’ll have to go through 3 government offices: DTI, LGU and the BIR. If you need a guide on the requirements needed for these, check this guide: https://www.taxumo.com/business-registration/sole-proprietors/

I have registered with the BIR and I got my BIR form 2303 or Certificate of Registration. What are the types of taxes that I should see in my registration as an online seller?

Nakapag-register na ako sa BIR at nakuha ko na ang BIR Form 2303 o Certificate of Registration. Ano ba ang buwis na dapat kong i-file at bayaran bilang isang online seller?

As a sole proprietor, (usually) you’d see these type of taxes:

  • Income tax return (filed Quarterly): 1701Q and 1701 or 1701A (for those who opted for 8% tax rate – earning below Php 3 Million Gross Revenue per year)
  • Sales Taxes (filed Quarterly): Percentage (for Non-VAT entities; earning below Php 3 Million Gross Revenue per year) or VAT (earning more than Php 3 Million Gross Revenue per year)
  • [Some entities with employees] Withholding Taxes on Compensation: 1601c (monthly) and 1604c

Some IMPORTANT things to note on filing online sellers taxes:

  • Tax rate types are 8% or Graduated Income Tax Rate. You can change your tax rate ONLY at the start of every year, before you file your first form. You can indicate it on your first Percentage tax form / Income tax form for the first quater.
  • For the 8% tax rate, you can only choose this if you are an individual tax payer (i.e. sole proprietor, professionals) and Non-VAT (earning below Php 3 Million Gross earnings per year)
  • Now that you’ll receive a 2307 form for the taxes withheld from your pay, these forms are very important. The total amount withheld will be tax credits that will be deducted from the total tax that you need to pay for your income tax return. These forms are “attachments” to your income tax return form.
  • These attachments also needs to be submitted to the BIR. If you’re using eBIR forms, you’ll need to use the Alpahlist validation tool of BIR to submit the attachments. I personally use Taxumo because Taxumo also submits the attachments for me. What I need to do for income tax filings is to submit all of the forms, confirmations, etc. via the EAFS tool. It makes submitting easier.
  • By the way, regardless of whatever tax rate you choose for Income tax return, you will need to write on your Books of accounts. BTW, I personally use Taxumo for filing, payment and even updating Books of Accounts. No need to know how to compute or have an accounting background. Join this FREE tutorial session with Taxumo: https://calendly.com/consultnow/onboarding
  • For mixed income earners (those with businesses who are still employed), you will need to file the taxes indicated in your COR then for your Annual income tax (use 1701 form), you will need to include the details in your 2316 (given by your employer).

So these are some of the things that I can think of, but if you have other questions, feel free to chat with Taxumo or send a message in their Facebook page. They are super duper helpful! They also have webinars specifically for online sellers.

I am part of the “cooperative / coop”, should I still register?

Yes, based on the BIR rules, all of us online sellers should register. You are required to register your business as the 1% withholding tax in the new BIR law for online seller taxes will be reported to be for your business.

To know more about the 1% withholding tax for online sellers, read this: withholding tax for online sellers

There are a lot of deductions in seller platforms like discounts for customers, etc. Which number should I report and how do I write it down in my sales invoice?

Ang daming kaltas sa seller platforms tulad ng diskwento sa customers, etc. Alin sa mga ito and dapat kong ireport at ilagay sa sales invoice?

Here is a sample breakdown that you can refer to. FYI, this is for those who want to use Taxumo to file their taxes.

Here are the steps to set up your account in Taxumo.

Step one: The first thing that you need to do to pay your online sellers taxes is to set up your profile in the settings page of Taxumo.

Step two: You’ll need toadd some “Categories” in Taxumo. As seen in the sample above, there are 4 DIRECT COSTS that are indicated: Commission, Payment Fee, Shipping Fee and Raw Materials. The other costs, not directly related to your business’ core activity (in this case… it’s selling goods), will be under deductible expenses.

This is where you can set up the categories in Taxumo.

If you need help in setting up categories and have other questions, you can also book a consultation session with Taxumo CPA partners in this page: Taxumo Consult.

So for the 4 direct costs for online sellers taxes that I’ve mentioned, 2 of these needs to be set up. So copy and add these 2. See screenshots below.

So the 4 direct costs will be categorized as such:

Commission: (to be added as a category as mentioned above)

  • Group classification: Services – local
  • Category Name: Commissions
  • Type: Direct
  • VAT Classification: Domestic Purchase of Services

Payment fee: (to be added as a category as mentioned above)

  • Group classification: Services – local
  • Category Name: Payment fee
  • Type: Direct
  • VAT Classification: Domestic Purchase of Services

Shipping fee: (existing category in Taxumo)

  • Group classification: Services – local or Services – foreign
  • Category Name: Services – local or Services – foreign
  • Type: Direct
  • VAT Classification: Domestic Purchase of Services or Services Rendered By Non-Residents

Raw mat cost: (existing category in Taxumo)

  • Group classification: Merchandise/Raw Materials – local or Merchandise/Raw Materials – imported
  • Category Name: Merchandise/Raw Materials – local or Merchandise/Raw Materials – imported
  • Type: Direct
  • VAT Classification: Domestic Purchase of Goods Other Than Capital Goods or Importation of Goods Other Than Capital Goods

Step 3: Encode all of your revenue and expenses in the Cashflow tab of Taxumo.

Remember that one invoice equals one entry on Taxumo. For the new rules on BIR Invoices, you can read this: Navigating BIR Rules on Receipts: Transitioning to Invoices Encode diligently since every time you encode your revenue and expenses, you will see an automated approximation of the taxes that you need to pay in the “TAX DUES” tab.

Step 4: Encode also all 2307 forms received in the “WITHHELD TAX” tab. It’s very easy to fill out. Just copy what is shown in your 2307 form.

Step 5: If you have subscribed to Taxumo, you can FILE AWAY. Go to the tax dues tab and file the forms that you need to file.

I think this post is becoming a bit too long already (LOL!), but feel free to comment below if you have questions on online seller taxes or better yet, go directly to Taxumo’s FB page and send them your questions.

Hope this helps! 😀

P.S. Some other articles that will help you: https://mommyginger.com/end-of-year-business-checklist-for-sole-proprietorships.html

The Secret Ingredient to Cool Summer Desserts: Discover Mr. Hat Gulaman

Summer is a time for celebration, relaxation, and lots of fun under the sun. As the temperatures rise and the heat intensifies, the search for the perfect cools summer desserts becomes essential.

What better way to enhance these moments than with cool, colorful summer desserts that everyone can enjoy? Whether you’re craving Halo-Halo, Sago’t Gulaman, or fruit coolers, one ingredient stands out for its versatility—Mr. Hat Gulaman!

Mr. Hat Gulaman makes it easy to prepare vibrant desserts that are not only delicious but also visually appealing. From family picnics to beach parties, the array of flavors like orange, lychee, and strawberry ensures that there is a Mr. Hat Gulaman to match every occasion.

What Makes Mr. Hat Gulaman Stand Out?

Produced by Philippine-based food and beverage company Seanluc, Inc., Mr. Hat Gulaman is a premium product renowned for its quality and versatility. Its jelly powder, derived from natural seaweed extract, includes a blend of sugar, flavorings, and colorings. 

With an extensive range featuring seven flavored and six unflavored options, Mr. Hat Gulaman invites you to explore a world of culinary creativity this summer. From the tropical zest of mango and buko pandan to the rich undertones of coffee, Mr. Hat Gulaman is the key to unlocking endless dessert possibilities. Economical and easy to use, it integrates smoothly into both time-honored recipes and bold, new creations.

Unlock the full potential of your summer desserts by trying out this easy to make and refreshing recipe using Mr. Hat Gulaman:

MR. HAT GULAMAN SUMMER MANGO GULAMAN

This tropical delight layers mango-infused gulaman with a creamy mango and white sugar mixture, creating a visually appealing and deliciously fruity dessert. Served in elegant glasses, it’s an ideal treat for any summer gathering.

Ingredients

  • 1 ripe mango
  • 6 tbsp white sugar for each sachet of Mr. Hat Gulaman
  • 5 cups water
  • 1 cup mango juice
  • 1 sachet Mr. Hat Gulaman Unflavored Orange
  • 1 sachet Mr. Hat Gulaman Unflavored White

Procedure

1. Dissolve Mr. Hat Gulaman Unflavored Orange in 2 cups of water. Add 1 cup of mango juice then add 6 tbsp white sugar. Stir very well and put on the fire then wait to boil.

2. Transfer to the prepared glass (wine glass, halo halo glass, or small bottle) then let it cool.

3. Dissolve 1 sachet of Mr. Hat Gulaman Unflavored White in 3 cups of water then add 6 tbsp of white sugar. Stir very well and put on the fire then wait to boil. Once it boils, add the mixture on top of the yellow or orange gulaman then let it cool.

4. Add sliced mangoes on top and a small drop of honey (optional)

Expert Tips for Perfect Gulaman Every Time

To ensure the best results when using Mr. Hat Gulaman, consider these tips from culinary experts:

  • Always follow the package instructions for water ratios to ensure your gulaman sets perfectly.
  • For a firmer jelly, slightly increase the amount of gulaman powder.
  • Dissolve the powder completely in boiling water before adding any cold ingredients to avoid lumps.

Craving for even more Mr. Hat Gulaman refreshing summer coolers? Be sure to check out Philstar.com’s feature here for even more easy to do jelly recipes!

With Mr. Hat Gulaman, you have the secret ingredient to making any dessert stand out. Easy to prepare, delightful to taste, and fun to share, it brings a touch of sweetness to every occasion.

Dive into the world of delicious, creative, and colorful desserts by following Mr. Hat Gulaman on Tiktok (@mrhatgulaman) and on Facebook (@mrhatgulaman). Remember, para pampalamig ng ulo at katawan, #NasaHatKoYan!

Moving On Up: How to Plan Your Home Upgrade

In the journey of life, there comes a time when we outgrow our current living space, whether it’s due to an expanding family, a desire for more comfort, or simply a change in lifestyle. When this moment arrives, it’s time to consider upgrading your home. Nonetheless, initiating such a project demands meticulous planning and thorough consideration. From financial planning to design selections, numerous factors need careful attention to guarantee a seamless transition to your envisioned home. Let’s delve into the fundamental steps for effectively planning your home upgrade.

Assess Your Needs and Goals

Before diving into the world of home upgrades, take some time to assess your needs and goals. Consider factors such as the size of your family, your lifestyle preferences, and any specific requirements you have for your new home. Are you looking for more space, better functionality, or enhanced aesthetics? By understanding your priorities, you can tailor your home upgrade project to meet your unique requirements.

Set a Realistic Budget

One of the most critical aspects of planning a home upgrade is setting a realistic budget. Determine how much you can afford to spend on the project and allocate funds accordingly. Remember to factor in not only the cost of renovations but also any additional expenses such as permits, professional fees, and unforeseen contingencies. It’s essential to be prepared for unexpected costs that may arise during the course of the project.

Research Design Ideas

Once you’ve established a firm grasp of your requirements and financial parameters, embark on exploring design inspirations for your home upgrade. Delve into a variety of sources such as magazines, online platforms, and social media channels to gather ideas that ignite your imagination. Pay close attention to aspects like room layout, color palettes, and architectural themes that align with your personal preferences. Utilize tools like vision boards or Pinterest to compile your ideas visually, facilitating clearer communication with your designer or contractor and ensuring your vision is effectively conveyed.

Hire Professionals

Unless you’re a seasoned DIY enthusiast with ample experience in home renovations, it’s advisable to hire professionals for your upgrade project. Look for reputable architects, interior designers, and contractors who have a proven track record of delivering quality work within budget and schedule. Conduct interviews, check references, and request portfolios to ensure you’re entrusting your project to capable hands. Consider upgrading to Frontier fiber internet to enhance your home’s connectivity and make the most of your renovated space.

Obtain Necessary Permits

Prior to starting any construction, it is imperative to obtain the required permits and approvals from local authorities. Neglecting this crucial step can lead to penalties, project delays, and potential legal issues in the future. Your contractor or architect should possess a thorough understanding of the permitting procedure and be able to assist you in navigating through it. They can offer guidance to ensure adherence to building codes and regulations, safeguarding the smooth progress of your project.

Plan for Disruption

Home upgrades, especially major renovations, can be disruptive to your daily life. Prepare yourself and your family for temporary inconveniences such as noise, dust, and limited access to certain areas of the house. Consider alternative living arrangements if the renovation work will render your home uninhabitable for an extended period. Clear communication with your contractor regarding project timelines and expectations can help minimize disruptions and ensure a smoother transition.

Stay Flexible

Even with careful planning, home upgrade projects may encounter unforeseen challenges. Flexibility is key; remain adaptable and ready to pivot as needed. Keep communication lines open with your contractor, and take a proactive approach to resolving any issues that arise during the project. Keep in mind that the final outcome will make the effort and inconvenience worthwhile in the long term.

Conclusion

In conclusion, planning a home upgrade requires careful consideration of your needs, goals, and budget. By following these essential steps and staying organized throughout the process, you can turn your vision of a dream home into a reality. From assessing your needs to hiring professionals and obtaining necessary permits, each stage of the planning process plays a crucial role in ensuring a successful home upgrade. So, roll up your sleeves, dive into the exciting world of home renovations, and get ready to take your living space to new heights.

The Role of Diversity, Equity and Inclusion in Modern Businesses

Embracing Diversity, Equity, and Inclusion (DEI) isn’t just a moral imperative—it’s also a strategic necessity for business success. 

DEI initiatives encompass a range of policies and practices designed to create inclusive environments where individuals from diverse backgrounds feel valued and respected. Across the globe, there’s a growing recognition of the significance of DEI in organizational settings. 

In the United States, 54% of employees affirm that their employers are actively prioritizing DEI efforts. Similarly, in Southeast Asia, 43% of workers report the presence of diversity programs within their organizations as of 2023.

Understanding the pivotal role of DEI in today’s business landscape is essential. By fostering diverse perspectives and creating equitable opportunities, DEI not only enhances employee satisfaction and retention but also drives innovation and fosters a positive corporate culture. 

Let’s delve deeper into how prioritizing DEI can fuel your company’s success and propel it toward a brighter future.

Why Should Organizations Embrace DEI?

A thriving organizational culture that prioritizes diversity, equity, and inclusion (DEI) is pivotal for optimizing every facet of your business operations, spanning from attracting and retaining top talent to driving innovation and maximizing performance. 

To ensure your company embodies these principles effectively, it should strive to meet the following standards:

  • Equality – Establishing fairness and transparency in all aspects of employment, including pay, recruitment, promotions, and access to resources. This can be achieved through strategies such as benchmarking salaries and leveraging reliable payroll software solutions to ensure equitable compensation practices.
  • Openness – Cultivating a company culture that fosters respect and fairness towards all employees, where open communication and feedback are encouraged, and grievances are addressed promptly and fairly.
  • Belonging – Creating an environment where individuals from diverse backgrounds feel a sense of belonging and are empowered to share their perspectives, talents, and experiences freely. 

Championing diversity, equity, and inclusion (DEI) in your business yields numerous advantages:

More Creativity & Innovation at Work

Encouraging collaboration among employees from diverse cultural backgrounds and expertise levels fosters a fertile ground for innovation and creativity. 

Diverse teams bring together unique experiences, perspectives, and knowledge, fueling the generation of novel ideas. Research underscores this effect, showing that companies with diverse management teams experienced a remarkable 19% increase in innovation revenue compared to their homogeneous counterparts.

An Improved Reputation

Prioritizing DEI not only broadens your talent pool but also deepens your understanding of customers, building trust and enhancing your reputation. In an era marked by mass employee resignations, known as the “Great Resignation,” job seekers are increasingly scrutinizing potential employers’ commitment to DEI initiatives.

For Gen Z and millennial workers, a company’s stance on societal and environmental issues, including diversity and inclusion, significantly influences their career decisions. 

Studies reveal that a substantial portion of these younger employees (52%) are dissatisfied with their organizations’ progress in creating diverse and inclusive workplaces, emphasizing the need for businesses to intensify their DEI efforts.

A Culture of Trust Is Built

Establishing a culture of trust is vital for your company’s success. This involves fostering an environment where every employee feels a sense of belonging and confidence in their workplace interactions. 

Leadership must initiate honest dialogues with diverse team members, demonstrating vulnerability and actively listening to their experiences. Addressing instances of discrimination and bias is essential, with managers encouraged to engage with diverse employees, understand their concerns, and incorporate their feedback. 

By embracing this approach, your organization fosters genuine connections, promotes inclusivity, and drives collective success and innovation.

High Retention Rates

Replacing resigned employees consumes significant resources, impacting morale and productivity. Strengthening your DEI efforts is a proactive strategy to mitigate turnover.

Research underscores the importance of prioritizing DEI: 78% of employees prioritize working for companies that value diversity, with 50% considering it very important. Those satisfied with their organization’s DEI initiatives report higher levels of happiness and job satisfaction, particularly regarding compensation and professional growth opportunities.

Gen Z and millennial workers, in particular, are attuned to DEI’s influence on employee retention. They are more likely to reject job offers lacking purpose or ethical alignment. Conversely, those satisfied with their organization’s DEI efforts are inclined to stay longer, recognizing the value of a socially and environmentally responsible workplace.

Everyone is Encouraged to Reach Their Full Potential

A DEI-centric culture empowers employees to reach their full potential, fostering connection, loyalty, and performance improvement through constructive feedback.

Deloitte’s 2022 study highlights Gen Z’s desire for workplaces where they can freely share ideas and contribute to building inclusive environments. Nearly 90% of employees whose employers empower them feel a strong sense of alignment with their company’s values and objectives.

Increased Performance & Profitability

Research consistently shows that diversity, equity, and inclusion (DEI) significantly impact business success. Firms with the most gender-diverse management teams are 25% more likely to outperform those with less diversity. Similarly, higher levels of female representation correlate with stronger performance. 

Inclusive teams are 35% more productive, and businesses with ethnically and culturally diverse workforces in the top quartile experience 36% higher profitability. 

Prioritizing DEI initiatives is not only socially responsible but also strategically beneficial for driving organizational success. By fostering diversity and inclusion, businesses harness diverse perspectives and talents, leading to enhanced innovation, better decision-making, and increased profitability.

Embracing Diversity and Inclusion for Success

Diversity, equity, and inclusion (DEI) are essential components of successful business operations. By prioritizing fairness and equality, organizations experience heightened levels of innovation, employee retention, performance improvements, and increased profitability.

Moreover, championing DEI demonstrates empathy and support for both prospective employees and customers, showcasing an understanding of their challenges and aspirations. Effective initiatives aimed at fostering a sense of belonging throughout the employee experience and customer engagement processes are key to achieving this.

Addressing pay equity challenges is paramount. Partnering with Sprout Solutions for a payroll system in the Philippines ensures fair and timely compensation for all employees. Book a consultation today for more information about our digital payroll solution.

Easter Celebration 2024 at Joy~Nostalg: A Staycation to Remember

This year, our family is on the lookout for an exceptional way to celebrate Easter. Since we normally just stay in Metro Manila during Holy Week, we searched for things that our daughters Zeeka and Yani can do and enjoy this coming Easter. We found our answer in the Easter Celebration 2024 announcement of Joy~Nostalg Hotel & Suites Manila, a magical event that promises not just a staycation but an unforgettable experience.

Here is the copy of the super cute poster: Hop into Candyland!

But before getting into these, let me share our staycation experience first with you!

Our Unforgettable Staycation Experience

Before diving into the Easter festivities, I must share our incredible staycation experience at Joy~Nostalg. It was our first time staying in this elegant oasis in the city, and it left us in awe. We stayed at a one-bedroom executive suite, perfect for our family of four.

The suite was astonishingly spacious, featuring a well-equipped kitchen, a luxurious bathtub that the kids adored, and ample room for all of us to relax comfortably. The attention to detail and the helpfulness of the staff made our stay even more enjoyable, setting the stage for an unforgettable staycation.

During our stay, we had the pleasure of dining at The Nostalgia Dining Lounge on the 6th floor, an experience that truly stood out thanks to the exceptional service and personal touches we received. The manager went above and beyond to ensure our comfort, demonstrating remarkable attentiveness and kindness.

Noticing that our youngest, Yani, might not find something to their liking in the buffet, the manager had a special serving of mashed potatoes prepared, a gesture that deeply touched us and made Yani’s dining experience delightful.

After Yani decided to return to the room post-meal, Zeeka and I seized the opportunity for a lovely mother-daughter date, reveling in the cozy ambiance and exquisite dishes. Meanwhile, EJ, ensuring Yani was settled and content back in the room, opted for room service. Despite not joining us at The Nostalgia Dining Lounge, he reported that the room service meal was equally satisfying. This dining experience was a testament to Joy~Nostalg’s commitment to personalized service and culinary excellence, making our staycation all the more memorable.

They also have amazing amenities like their pool, gym and spa.

Feasting and Festivities at the Easter Brunch

Now here are the details of the Easter Celebration 2024 at Joy~Nostalg. It will begin with an exquisite brunch at The Nostalgia Lounge & Bar. Some of the dishes that will be served are egg shakshuka, salmon coulibiac and chocolate gateau. This dining experience, priced at Php 1,888 nett per adult, with kids dining for free with two paying adults (perfect for families!). It’s a great start to the Easter festivities.

Family Fun with Easter Activities

At the heart of the Easter Celebration 2024 at Joy~Nostalg are the activities designed for children. The hotel has planned an egg-citing egg hunt, chocolate egg crafting sessions, and a crafts corner with egg painting and Easter coloring books, ensuring a fun-filled day for our little ones.

Savor the Sweetness of Candyland

The Candyland Buffet is a highlight of the Easter Celebration 2024, offering a plethora of sweet treats and chocolate surprises. Additional activities, such as balloon twisting by guest artists, will bring extra joy and color to the celebration, captivating children’s imaginations.

Exclusive Staycation Package for Easter Celebration 2024

The Family Fun Offer provides everything needed for the perfect Easter staycation. With spacious accommodations, access to all amenities, and Php 1,500 dining credits, along with a special Easter amenity, it’s a package designed for families to create lasting memories. Starting at Php 8,510 nett for a Studio Executive (check out the poster above), including buffet breakfast, it offers great value for a memorable Easter.

Be Part of the Easter Celebration 2024

Make Easter 2024 extraordinary by celebrating with us at Joy~Nostalg Hotel & Suites Manila. We’re now considering to make this a yearly tradition. Whether you’re drawn by the luxurious accommodations, the delicious dining, superb amenities or the exciting children’s activities, Joy-Nostalg is the perfect setting for a family Easter celebration.

For more details and to make reservations, contact The Nostalgia Lounge & Bar at +632 7719 1160 or tndl@joynostalgsuites.com. Room reservations can be made at +632 5318 7888 or HB2D6-RE1@accor.com. Stay updated with the latest offers and news by following Joy~Nostalg Hotel & Suites Manila on Facebook, Instagram, and Viber.

Let’s make Easter Celebration 2024 at Joy~Nostalg a joyous, unforgettable experience for your family.