3. Is there any difference in the reporting requirements for a sole-proprietorship business and a partnership business?
The reporting requirements are basically the same but the relevant tax returns are different:
- For a sole proprietorship business, the proprietor should declare the profit / loss in Part 5 of the Tax Return – Individuals (B.I.R. 60).
- For a partnership business, the precedent partner should complete and sign a Profits Tax Return - Persons Other Than Corporations (B.I.R. 52).
- When there is a change from sole-proprietorship to partnership during the accounting year or vice versa, the profit / loss for the full year should be reported in the Profits Tax Return - Persons Other Than Corporations (B.I.R. 52).