A Guide to Annual Compliance in the Philippines

Understanding Year-End Compliance in the Philippines

Year-end compliance in the Philippines is the point where everything is tested: tax filings, statutory reports, and financial records. This is where inconsistencies surface.

It’s not just about submitting documents on time. It’s about whether the numbers across your books, BIR filings, audited financial statements (AFS), and SEC General Information Sheet (GIS) actually align.

Regulators don’t just check if something was filed. They check whether what was filed makes sense together.

Why compliance matters

Year-end compliance protects businesses from three recurring pressure points:

• BIR penalties and exposure when filings are late, figures don’t reconcile, or documentation is weak.

• SEC reportorial issues that disrupt corporate housekeeping and can delay future transactions.

• Credibility risk with banks, investors, and partners, where due diligence teams expect clean AFS, tax filings, and corporate records, and notice when they don’t line up.

Risks of non-compliance

Non-compliance usually doesn’t fail loudly at first. It shows up as:

• Administrative fines and penalties (BIR/SEC)

• BIR audits and tax assessments

• Reputational damage and operational disruption

Quick note: This guide provides general information, not legal or tax advice. Year-end compliance decisions affect financial credibility. Work with a modern finance expert for proper review and execution.

Key Year-End Compliance for the year 2025: BIR, SEC + LGU Business Permit renewal for 2026

Annual compliance in the Philippines operates across three connected tracks. Each has its own filings, but none of them work in isolation. Inconsistencies between them are what cause delays, reversions, and penalties.

A) Tax / BIR Compliance for the year 2025

This covers all year-end tax filings, reconciliations, and substantiation required by the BIR.

Core year-end scope

• Year-end reconciliation of monthly/quarterly filings:

  • Income tax

  • Withholding taxes

  • VAT/percentage tax

• Annual Income Tax Return (AITR)

  → Filing and Payment of BIR Form 1702 - RT/EX/MX with Audited Financial Statement (AFS), 1709 (for Related Party transactions, if applicable), and Other Attachments before April 15 for the year ended on Dec 31

Execution notes

• Use the applicable e-filing tool: eBIRForms or eFPS. 

• Maintain audit-ready documentation, including books of accounts, schedules, and official receipts/invoices.

No more annual BIR registration fees

Under the Ease of Paying Taxes (EOPT) changes, the BIR ceased collecting the ₱500 annual registration fee effective January 22, 2024. Businesses are no longer required to file BIR Form 0605 for this purpose.

VAT reconciliation

VAT is a common audit trigger because it simultaneously affects revenue, purchases, and substantiation.

A practical VAT reconciliation check:

• Output VAT vs revenues vs issued invoices

• Input VAT vs purchases vs supplier invoices

• Reconciling items (timing differences, zero-rated/exempt misclassifications, unrecorded invoices)

B) Corporate / SEC Compliance (includes GIS)

This is the annual corporate reporting track.

Core year-end scope

• Audited Financial Statements (AFS) filing via SEC eFAST

• General Information Sheet (GIS) via SEC eFAST

SEC 2025 AFS submission requirements

• Filing of AFS and GIS through eFAST

• SEC filing schedules apply (deadlines released via circular at the beginning of the filing year, typically May–July 2026)

• Ensure the AFS filed with the SEC matches the AFS filed with the BIR (BIR-stamped copy or eAFS confirmation)

GIS annual requirements

The GIS functions as the company’s official corporate snapshot.

• Generally, due within 30 calendar days from the actual annual meeting date

• Covers directors, officers, ownership, and key corporate information

C) Business Permit / LGU Compliance

LGU renewals have fixed deadlines and limited flexibility and usually need to be finalized by January.

Core year-end scope

• Mayor’s Permit/business permit renewal and local clearances for 2026

Requirements vary by LGU, but commonly include:

• Prior-year permit documents

• Financial or tax support documents (often AFS and/or ITR)

Filing and Submission Procedures

Step-by-Step Year-End Compliance Process

1) Close and reconcile your books

• Finalize bank reconciliation

• Reconcile sales and purchases against tax returns

• Clear intercompany and related-party balances

2) Prepare BIR annual returns and pay taxes due

• Identify applicable tax returns, alphalists, and deadlines

• Validate year-end totals against monthly and quarterly filings

• Coordinate and finalize AFS with your external auditor

• File via eBIRForms or eFPS, as applicable

3) Prepare and file SEC AFS and annual reports

• Confirm AFS details match corporate records and tax filings

• File through SEC eFAST

4) Update and file GIS

• Confirm shareholders, directors, officers, and corporate secretary details

• Reflect changes during the year (new investors, board changes, address updates)

• Submit within the SEC’s required window

5) Archive records and issue internal documentation

Organize and store:

• Bank statements

• Supporting documents and invoices

• Tax returns, proof of payment, and attachments

• SEC filing confirmations

• Board resolutions and updated corporate records

Apply a clean naming convention and folder structure.

Addressing Year-End Compliance Issues + Streamlining Your Workflow

Year-end compliance becomes difficult when discipline breaks down earlier in the year. In most cases, the issue isn’t complexity—it’s coordination.

Common challenges (and what to do about them)

Common issue	What to do about it
Fragmented records across accounting, tax, and corporate secretarial teams	Assign a single “source of truth” (your books) and require reconciliation sign-off before filing
VAT returns don’t match financial statements or sales/purchase records	Perform quarterly and annual VAT reconciliations and enforce strict invoicing controls
Late auditor scheduling is leading to delayed AFS filing	Lock audit timelines by Q4 and conduct a pre-year-end review

Practical workflow upgrades

• Build a year-round compliance calendar with monthly reminders

• Implement monthly or quarterly closing routines

• Use accounting and tax tools to reduce manual errors and version conflicts

• Automate reporting outputs and document storage where possible

• Run internal spot checks before major deadlines

• Stay updated on BIR and SEC process changes (EOPT has already shifted filing rules)

Download Proseso Consulting’s 2026 Annual Compliance Checklist

Conclusion: Staying Ahead of Year-End Compliance in 2026

The most effective year-end compliance strategy is consistency. Clean books, regular reconciliation, and alignment between BIR filings and financial statements reduce penalties, audit exposure, and friction during due diligence.

For businesses with multiple branches, subsidiaries, or cross-border transactions, year-end compliance requires deliberate planning. Work with Proseso Consulting, your tax advisor, and corporate compliance specialists to build a year-end roadmap that supports accuracy, credibility, and control.

This blog article does not constitute professional or legal advice. It is only intended to provide general information on a subject.