INCOME TAXATION

ACCOUNTING PERIODS
November 21, 2023
What is an accounting
period?
Types of Accounting Periods

Regular Short Accounting

Accounting Period Period
• 12 months in length • Less than 12 months

Two Types:
• Calendar Year
• Fiscal Year
Regular Accounting Period

Calendar Year
The calendar accounting period starts from Under the NIRC, the calendar year shall be used when
January 1 and ends December 31. This the:
accounting period is available to both corporate taxpayer’s annual accounting period is
taxpayers and individual taxpayers.
01 other than a fiscal year (i.e. longer than 12
months in length)

02 taxpayer has no annual accounting period

03 taxpayer does not keep books

04 taxpayer is an individual

PPT模板 http ://www.1p p t.co m/mo b an/

Regular Accounting Period

Fiscal Year
The fiscal accounting period is any 12-month period that ends on any day other than
December 31. The fiscal accounting period is available only to corporate income
taxpayers and is not allowed to individual income taxpayers.

PPT模板 http ://www.1p p t.co m/mo b an/

Filing of the Annual Income Tax Return

Deadline of Filing the ITR

Under the NIRC, the return is due for filing on the fifteenth
day of the fourth month following the close of the
taxable year of the taxpayer. The regular tax due is
payable upon the filing of the income tax return (ITR).

Illustration: Due date of the annual ITR

Taxpayers under the
01 calendar year must file 02
their annual ITR for the
current period not later
than April 15 of the
following year.
A corporate taxpayer
with fiscal year ending
June 30, 2023 must file
its annual income tax
return not later than
October 15, 2023.
Short Accounting Period

Newly commenced business

The accounting period covers the date of the start of the business
until the designated year-end of the business.

Illustration:
HYPE Inc. started business operation on June 30, 2023 and opted to
use the calendar year accounting period.
— HYPE should file its first ITR covering June 30, 2023 to
December 31, 2023 for the year 2023. The return shall be filed on
or before April 15, 2024.
Short Accounting Period

Dissolution of business
The accounting period covers the start of the current year to the date of
dissolution of the business.

Illustration:
Source Inc. is on the fiscal year accounting period ending every March 31. It
ceased business operation on August 15, 2023.
— Source should file its last ITR covering April 1, 2023 to August 15,
2023. Under the old NIRC, dissolving corporations shall file their return within
30 days from the cessation of activities or 30 days from the approval of
merger by the SEC in the case of merger. Hence, the return shall be filed
on or before September 15, 2023.

For individuals, the return shall be due on or before April 15, 2024. There
is no requirement for early filing under the NIRC.
Short Accounting Period
Change of accounting period by corporate
taxpayers
The accounting period covers the start of the previous accounting period up to
the designated year-end of the new accounting period.
Note: BIR approval is required in changing an accounting period.

Illustration 1:
Effective February 2023, Golden
Corporation changed its calendar
accounting period to a fiscal year
ending every June 30.
— Golden Corporation should file
an adjustment return covering the
income from January 1, 2023 to
June 30, 2023 on or before
October 15, 2023.
Illustration 2:
Effective August 2023, Layover
Company changed its fiscal year
accounting period ending every June
30 to the calendar year.
— Layover Company should file
an adjustment return covering the
income from July 1, 2023 to
December 31, 2023 on or before
April 15, 2024.
Short Accounting Period

Death of the taxpayer

The accounting period covers the start of the calendar year until the
death of the taxpayer.

Illustration:
Mr. Castrodes died on November 2, 2023.
— The heirs of Mr. Castrodes or his estate administrators or
executors shall file his last ITR covering his income from
January 1, 2023 to November 2, 2023. There is no requirement for
early filing in case of death of taxpayers. Hence, the return shall be
filed on or before the usual deadline, April 15, 2024.
Short Accounting Period

Termination of the accounting period of

the taxpayer by the CIR
The accounting period covers the start of the current year until the
date of termination of the accounting period.

Illustration:
The accounting period of a taxpayer using calendar year was
terminated by the Commission of Internal Revenue on August 2,
2023.
— The taxpayer must file an ITR covering January 1, 2023 to
August 2, 2023. The ITR and tax shall be due and payable
immediately.
THANK
YOU!
EARL REXELL M. MACEDA