How to Add Taxpayer Classification by Gross Sales

Overview:

QNE AI Cloud Accounting supports compliance with the Ease of Paying Taxes Act (Republic Act No. 11976) by allowing users to classify their business according to annual gross sales. The Taxpayer Classification (by Gross Sales) setting ensures that your BIR reporting and documentation align with the latest tax regulations based on your income bracket.

Scenario:

A business owner needs to update their taxpayer classification in the system after their gross annual sales exceed the threshold for small taxpayers. To reflect this correctly in their BIR-related documents, they must update the taxpayer classification setting in QNE AI Cloud Accounting.

Solution:

1. Navigate to Company > BIR Tab.
   
2. Click the Edit button in the top-right corner of the screen.
   
3. Locate the field labeled Taxpayer Classification (by Gross Sales).
4. Click the dropdown menu and select the appropriate classification based on your total annual gross sales (excluding VAT). The options are:
   • Micro Taxpayer: less than PHP 3,000,000
   • Small Taxpayer: PHP 3,000,000 to less than PHP 20,000,000
   • Medium Taxpayer: PHP 20,000,000 to less than PHP 1,000,000,000
   • Large Taxpayer: PHP 1,000,000,000 or more
     
5. Once selected, click Save Changes to apply the changes.
   

Application:

For example, if your company’s gross sales for the year increased beyond the Small Taxpayer threshold, you are now required to update your classification to Medium Taxpayer. This ensures all future BIR submissions and report formats reflect your updated classification, helping maintain accurate compliance with RA 11976.

Regularly reviewing and updating this classification ensures that your business stays compliant with evolving tax rules and avoids potential penalties or misreporting.