Compute Your Monthly Amortization











Powered by Mortgage Calculator

Search Properties

Condo/Location

Condo/Price

House/Location

House/Price

Pag-IBIG Housing



Filing Income Tax Return (ITR) in the Philippines

Filing Income Tax Return (ITR) in the Philippines

Have you filed your Income Tax Return yet? If not, then you must be aware of this responsibility to our government; whether we like it or not, we have to file and pay taxes;).

Taxation is very important to our government as money is collected for the purpose of providing free education, better medical services, and useful infrastructure.


The administration has lessened the corruption in our government and hopefully in the next three year-term, taxes will be used to help uplift Filipinos with better systems, services and development.

Going back to our subject matter.

What is Income Tax Return?
Income Tax is a tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the pertinent items of gross income specified in the Tax Code of 1997 (Tax Code), as amended, less the deductions and/or personal and additional exemptions, if any, authorized for such types of income, by the Tax Code, as amended, or other special laws. - www.bir.gov.ph
Who Are Required To File Income Tax Returns?

1. Individuals

* Resident citizens receiving income from sources within or outside the Philippines

* Employees deriving purely compensation income from 2 or more employers, concurrently or successively at anytime during the taxable year 

* Employees deriving purely compensation income regardless of the amount, whether from a single or several employers during the calendar year, the income tax of which has not been withheld correctly (i.e. tax due is not equal to the tax withheld) resulting to collectible or refundable return 

* Self-employed individuals receiving income from the conduct of trade or business and/or practice of profession 

* Individuals deriving mixed income, i.e., compensation income and income from the conduct of trade or business and/or practice of profession 

* Individuals deriving other non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax 

* Individuals receiving purely compensation income from a single employer, although the income of which has been correctly withheld, but whose spouse is not entitled to substituted filing 

* Marginal income earners 

* Non-resident citizens receiving income from sources within the Philippines 

* Aliens, whether resident or not, receiving income from sources within the Philippines

2. Corporation shall include partnerships, no matter how created or organized.

3. Domestic corporations receiving income from sources within and outside the Philippines

4. Foreign corporations receiving income from sources within the Philippines

5. Estates and trusts engaged in trade or business

The Scope of Income Tax Return above needs individual explanation; you may also check the BIR website at www.bir.gov.ph

What are the requirements in filing Income tax Return?

Here are the requirements to be attached in filling ITR, pls see which ever is applicable to your business or profession:

The Certificate of tax withheld from Compensation Income or BIR Form 2316 - usually it's a copy of the tax withheld if you received an earning or income from other entity like for Real Estate Practitioner - a copy of tax withheld during the release of commission from developer.
Other Certificate of Income Payments not subject to Withholding Tax or BIR Form 2304 and Certificate of Creditable Tax Withheld at Source or Form 2307 and other tax Credits.
 If the Gross Quarterly Sale exceeds 150,000 requires Account Information Form or Audited Financial Statement verified by CPA.
And for those who will avail exemptions, a husband’s waiver to claim additional exemptions of around 50,000 and Tax Credits from prior excess in tax withheld and would need copy of the proof - previous filed form.
If it’s your first time to file an Income Tax Return, then you must read the details as some BIR branches like any other government offices, will give you a have a hard time looking for answers. Expect some government employees, as I have experienced, to be lazy in giving exact details, the requirements, the forms needed for filling and others.

Here are the Forms you need for filing ITR

BIR Form 1700 - Annual Income Tax Return (For Individual Earning Purely Compensation Income Including Non-Business/Non-Profession Related Income)

BIR Form 1701 - Annual Income Tax Return (For Self-Employed Individuals, Estates and Trusts Including Those With Both Business and Compensation Income)

*BIR Form 1701 AIF - Account Information Form For Self-Employed Individuals, Estates and Trusts (Including those with Mixed Income, i.e., Compensation Income and Income from Business and/or Practice of Profession) and Estates and Trusts (Engaged in Trade or Business)
*NOTE: Pursuant to Revenue Memorandum Circular No. 6 – 2001, corporations, companies or persons whose gross quarterly sales, earnings, receipts or output exceed P 150,000.00 may not accomplish this form. In lieu thereof, they may file their annual income tax returns accompanied by balance sheets, profit and loss statement, schedules listing income-producing properties and the corresponding income therefrom, and other relevant statements duly certified by an independent CPA.
BIR Form 1701Q - Quarterly Income Tax Return for Self-Employed Individuals, Estates and Trusts (Including those with both Business and Compensation Income)

BIR Form 1702 - Annual Income Tax Return (For Corporations and Partnerships)

*BIR Form 1702 AIF - Account Information Form (For Corporations and Partnerships)
*NOTE: Pursuant to Revenue Memorandum Circular No. 6 – 2001, corporations, companies or persons whose gross quarterly sales, earnings, receipts or output exceed P 150,000.00 may not accomplish this form. In lieu thereof, they may file their annual income tax returns accompanied by balance sheets, profit and loss statement, schedules listing income-producing properties and the corresponding income therefrom, and other relevant statements duly certified by an independent CPA.
BIR Form 1702 Q - Quarterly Income Tax Return (For Corporations and Partnerships)

BIR Form 1704 - Improperly Accumulated Earnings Tax Return (For Corporations)

As you can see, filing is not only yearly but monthly and quarterly as well, which are quite a bit hassle if you are busy with your business or profession. You need to do it though, because there certain penalties for not filing.

Click here for BIR DOWNLOADABLE FORMS

Here are the Tax Rates for Individuals Earning Purely Compensation Income and Individuals Engaged in Business and Practice of Profession - like the Real Estate Practitioners and Professionals.

Amount of Net Taxable Income
Rate
Over
But Not Over
P10,000
5%
P10,000
P30,000
P500 + 10% of the Excess over P10,000
P30,000
P70,000
P2,500 + 15% of the Excess over P30,000
P70,000
P140,000
P8,500 + 20% of the Excess over P70,000
P140,000
P250,000
P22,500 + 25% of the Excess over P140,000
P250,000
P500,000
P50,000 + 30% of the Excess over P250,000
P500,000
P125,000 + 32% of the Excess over P500,000 in 2000 and onward

How to Compute Income Tax Return?

Gross Income .................................................................P ___________
          Less: Allowable Deductions (Itemized or Optional)................. ___________
          Net Income........................................................................ P ___________

Net Income..................................................................... P ___________
          Less: Personal & Additional Exemptions........................ ___________
          Net Taxable Income ..........................................................P ___________

Net Taxable Income ................................................P ___________
           Multiply by Tax Rate (5 to 32% - table above) ....................____________
           Income Tax Due: Tax withheld (per BIR From 2316/2304)P ___________
           Income tax payable .......................................................... P____________

Pay the balance as you file the tax return, computed as follows:

Income Tax Due .........................................................................P ___________
Less: Withholding Tax.................................................................... ___________
Net Income Tax Due.............................................. P ___________

Personal Exemptions
For single individual or married individual judicially decreed as legally separated with no qualified Dependents………………………………………P 50,000.00
For head of family………………..................…....P 50,000.00
For each married individual *…….................……P 50,000.00

Note: In case of married individuals where only one of the spouses is deriving gross income, only such spouse will be allowed to claim the personal exemption.

Additional Exemptions:
         For each qualified dependent, an P25,000 additional exemption can be claimed but only up to 4 qualified dependents.

Steps in Filing ITR and Payment Method

1. Fill-up BIR Form 1700, 1701, 1701-AIF or other forms above in triplicate copies.

2. If there is payment:

* Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office where you are registered and present the duly accomplished BIR Form 1701, together with the required attachments and your payment.
* In places where there are no AABs, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are registered and present the duly accomplished BIR Form 1701, together with the required attachments and your payment.
* Receive your copy of the duly stamped and validated form from the teller of the AABs/Revenue Collection Officer/duly Authorized City or Municipal Treasurer
3. For "No Payment" including refundable/ creditable returns, returns with excess tax credit carry over, and returns qualified for second installment:

* Proceed to the Revenue District Office where you are registered or to any established Tax Filing Centers established by the BIR and present the duly accomplished BIR Form 1701, together with the required attachments.
* Receive your copy of the duly stamped and validated form from the RDO/Tax Filing Center representative.

Deadline of Filing ITR

Final Adjustment Return or Annual Income Tax Return - On or before the 15th day of April of each year covering income for the preceding year

Freelancer and Professionals in Filing Income Tax Return

Regular filers of ITR know this already, reading this would help young professionals and freelancers who have no idea on how to file their Income Tax Return.

First of all, you must take care of the requirements above because it’s your only proof of earnings. Though taxes were already been deducted during release of commission or income receivables, we still need to file monthly, quarterly and annually.

Read also: Business Name Registration with DTI

Be aware of this, every non filling of monthly sales will require you to pay a penalty of Php. 200 and if you didn't file for example for two years period then you are accountable to pay as much as Php. 6,000. And if you didn’t mind about it, thinking BIR is not going after you or the agency might forget about it because there are many individual not filing their own, then you must be aware that every peso you are accountable with BIR will be accumulated monthly until the time you settle it. They just enter your TIN on their system and shows up your non-filling record of certain penalties equivalent.

For example: You are a freelance professional and you have not filed for five years and then you need to transfer to another city to exercise your profession, you will be required to clear of your non filling penalties and other charges before they allow you to transfer your TIN.

Every centavo that we are accountable with BIR will get back unto us in time. It will always better to file and do our duty as responsible citizen and tax payer.

For more details, please look on BIR website: www.bir.gov.ph or visit their nearest branch.


Thank you for reading, please share if you find this site useful.

photo credit: tokyoconsultingfirm.com

51 (mga) puna:

Giash said...

Thanks for taking time for sharing this article, it was excellent and very informative. It’s my first time that I visit here. I found a lot of informative stuff in your article. Keep it up. Michael Shah

Anonymous said...

1. Fill-up BIR Form 1701 in triplicate copies

Still use 1701 even if you are earning purely compensation income?

Jerome Morada said...

Thanks for the comment, that should be Form 1700 for the Earning Purely Compensation income. Please refer to the Forms to be used above. For complete details, you may check at www.bir.gov.ph

zetrock said...

If working online, need pa rin ba mag-file?

Jerome Morada said...

Based on: Who Are Required To File Income Tax Returns? above, under the category INDIVIDUAL, a Resident citizens receiving income from sources within or outside the Philippines - are required to file ITR. Thanks.

Anonymous said...

kailan po ba pwede magstart mag-file ng ITR?

Jerome Morada said...

As early as January of every year pwede po tayong mag-file para maiwasan ang mahabang pila at abala.

Due Date: On or before the 15th day of April of each year covering income for the preceding year.

Salamat.

Anonymous said...

thank you for all the info.
very informative.

Anonymous said...

kahit ba wala ka pa 1yr sa work mo pede ka mag file ng ITR?

Jilob said...

kung non-stock, non-profit po ung company for example a condo, required po bang magfile ng Quarterly ITR? thanks. GBU!

Jerome Morada said...

Thank you all for visiting my site, pasensya mas maigi kung maiconsult natin ang ITR regarding Condo Corp sa isang Accountant. I'm a self employed professional at ito lang ang kabisado ko. You may refer at www.bir.gov.ph for more details.

For those employed, the employer takes care of the filing to the BIR.

Thanks.

Anonymous said...

Kung vat payer ka, Kailangan mo pa rin bang magfile ng quarterly income tax?

Margarhet Torres said...

gud day ask ko lng ksi last february 2013 nag open ako ng bussiness installation services tapos. binigyan ako ng 4 books
jouRnal book
ledger book
columnar14 colums 2 pcs.
tapos every month nag babayad ako ng percentage tax iba ba yun sa itr?
kc non vat ako?
naguguluhan kc ko tapos wala paring laman yung mga booklets ko need ko talaga advice mo pls

Anonymous said...

Hi Po! 3 years na po akong di nkapgfile ng ITR. Ano po ang pwedeng gawin or pwedeng magyari

marry tabios said...

when is the deadline for first quartely itr 1702 q. what specific date and month,,,

Jerome Morada said...

@Margarhet Torres - Gagamitin po natin ang mga Journal, Columnar and Ledger sa mga transactions nyo sa inyong business. Kailangan nyo pong ilista ang inyong mga expenses at income transactions para magkaroon kayo ng Financial Statement breakdown. Mas maigi kung makapag-konsulta kayo sa isang Accountant para mas accurate ang mga gagawin. Monthly, quarterly and annual filing is required.

@marry tabios - BIR Form 1702 Q - Quarterly Income Tax Return (For Corporations and Partnerships): DEADLINE - Corporate Quarterly Declaration or Quarterly Income Tax Return - On or before the 60th day following the close of each of the quarters of the taxable year. Pls refer to this link.. http://www.bir.gov.ph/taxinfo/tax_income.htm#21941

@Others - Ang pag-file ng ITR ay importante, pero depende kung Self-employed or may business, dahil kayo mismo ang magbabayad at mag-file ng ITR. Kung employed naman, e-check nyo lang ang witholding taxes ng Employer at dapat merun kayong copy ng ITR annually.

Salamat.

Anonymous said...

Hi po

Binigay ng company ko ung ITR then pinababalik with a sedula which I failed to do. May implications po ba un sa akin?

Thanks!

Anonymous said...

hello Sir Jerome

MY new company required me my form 2316 or ITR for this year, but my previous company said they cant give me form 2316 because I’am considered as a consultant, and they can only give me form 2307
Later I found that the filing for ITR has a deadline, and I have to pay for penalty
I just want to ask if how much will I pay? is it an excuse that my previous company should tell me that I should file my ITR on my own?
and if that is the situation they should give us our form 2307 before the deadline
It is my first job that is why I really don’t have idea with this
I have not yet file my ITR since I’am still waiting for my form 2307 for April-May 15, 2013
Thank You very much for sharing this site, very helpful and informative.

Jerome Morada said...

Thanks for viewing! That is the case for consultant like us, we need to file on our own. Form 2307 is the Certificate of Tax Withheld and that is what you need in Filing ITR. Yes there is a penalty for not Filing ITR even the Monthly Filing since you are considered Freelancer. If I got it right, I paid 200 pesos per month for not Filing Monthly and 1,000 for the Annual ITR. Please check on your RDO Officer, you may ask for your Open Cases records on your RDO, get a necessary Forms and pay on the authorized banks.

Thanks, Jerome

opleng said...

Hi jerome,

Just want to ask, Im planning to file my ITR but im not employed, neither have my own registered business. Just doing some sideline jobs and buy and sell. What are the steps and forms i need for filing my ITR.
Thanks

Jerome Morada said...

Opleng, the advantage of registering a business or professions is the credibility or growth of your business. If you are professionals, you may get a Certificate of Registration (COR) at BIR (500 pesos) and an Official Receipt (around 1,000). Everytime you will have an income, you will issue a Receipt and file it to BIR. You may go to your RDO Office for assistance.

Thanks, Jerome

opleng said...

hi jerome,
Thanks for your reply. Incase that i cant register my business or my profession at BIR, that means i cant file my ITR? Is there any possible way

thanks jerome

Jerome Morada said...

Yes you can't file without registering it first and have your COR and OR. But, its always safe having registered in BIR, one of your client will might be reporting you to the agency for not issuing OR and that is a case. Your TIN, COR and OR and your Income are their basis to verify your taxes, everything are in-check need to be file even a no-income transaction for a month.

Thanks

Narce Tagle said...

How about if u have mixed income, what is the procedure to be undergone in filing the ITR? What forms are need to be filled up?
Thankyou sir!

Maribel Biasong said...

If may Tax refund, let us say nag resign sya ng mid year? Kailan dapat ma reflect yung taz refund nya? within the period ba ng resignation nya or at the end of the year na. Just want to know. Thanks..

Anonymous said...

Sir pano ko malalaman kung binabayaran ng employer ko ang tax na kinakaltas sa akin? every 15th and 30th and deductions, pano ko malalaman kung binabayad nya nga iyon ng tama.

Jerome Morada said...

@ Narce Tagle, regarding forms to be used please refer above. In our Certificate of Registration - like in Las Pinas, stated there the forms to be used depending on your classification (see above).

@ Maribel Biasong, kung employed po kayo ang alam ko makukuha nyo in the next year pero kung self-employed medyo maghihintay pa ng ilang years dahil marami pa silang i-taxed audit.

@Anonymous, pwede nyo pong i-verify sa RDO kung saan kayo registered. I'm sure malalaman dyo duon kung yong name and TIN Number nyo ay connected sa company, at pwede kayong humingi ng Open Cases Record kung talagang na-ireremit under your name.

Salamat, Jerome

Anonymous said...

question lang > Paano kapag foreign based ang company mo pero locally deployed ka dito. wala kayo local office dito and nireremit lang yung sahod mo monthly.

Anong ififile ko na tax return?

Anonymous said...

Sir, kung nagwowork sa government pero walang item, contractual and no employer-employee relationship pero ang taxes withheld e for employee, no benefits too like GSIS, Philhealth and Pagibig? Tama po ba yun? if not ano dapat na tax withheld?

Anonymous said...

Gerome,
If all the earnings of a Filipino individual or businessman residing in the Philippines are foreign currencies, is the any tax incentives?

All the best,
JJ

Cecilyn Delos Reyes said...

sir I want to ask lng..nag apply kasi ako for credit card, I was a regular employee. Pwede ko bang mahingi sa HR namin ang copy ng ITR ko kasi yun ang requirements ng credit card application.

Leizel said...

Good Day!

if non-vat, what particular tax are we going to file & Pay for?

Anonymous said...

Hi,ask ko lang if san ako nkakuha ng itr ko s company ko ba o s bir mismo need ko as requirements s pagayos ng papers ko.

gracela ramirez said...

San ba ako nkakuha ng itr ko s company ko ba o bir mismo ,need ko copy as a requirements to travel.

Jerome Morada said...

Good Day!

@Cecilyn Delos Reyes, pwede po kayong humingi ng copy dahil ang employer nyo ang nagpa-file nun.

@Leizel, Non-Vat is Income Tax type, you had to file and pay Monthly 3% Tax out of your Gross Income if there are No withheld tax deducted OR file the Withheld Tax Monthly which is 10% (with BIR Form 2307) so during Annual Income Tax Return filing you can file for a refund, if there's to refund.

@gracela ramirez, sa Company nyo po kayo hihingi ng ITR kung kayo ay employed.

Thanks for viewing!

Jerome

jake rebs said...

hi sir,
ask ko lang pano pag fill-up ng ng 1702Q for 2nd quarter. Number 3 item in 1702Q, need ba i-mark un 1st and 2nd quarter? or 2nd Q lang? thank you

jake rebs said...

sa quarterly VAT po ba per quarter din ang i-mark sa number 2 item OR accumulated ( e.g. in 2nd quarter i-mark ng X un 1st and 2nd)

Naomi said...

Hi sir! In filing for the Quarterly income tax (1701Q), kasama ba sa Less: Tax Credits/ Payments ang creditable income tax withheld (1601-E) na binabayaran namin monthly for space rental? Thanks.

Anonymous said...

mr.morada,

good day, what if your income is lesser than or just equal to your personal exemptions already? thank you..

JO said...

@Naomi-- Inde po nyu mgagamit un 1601E sa Less: Tax Credits

Mary Joy Satuito said...

hi po, what if hindi ako nakakatanggap ng certificate of income tax withheld sa employer ko, may ways ba na malaman ko kung binabayad nila yung tax na kinakaltas sa akin?

Reah said...

Sir Morada, do I need to include the RPT paid in the deductions in filing my 1701Q?

Anonymous said...

What are you filing po? Annual or Quarterly ITR? Personal exemptions can only be deducted in filing you annual ITR.

Anonymous said...

Hi there, same tayo ng status sana masagot ni Sir Jerome ito..

Anonymous said...

question lang > Paano kapag foreign based ang company mo pero locally deployed ka dito. wala kayo local office dito and nireremit lang yung sahod mo monthly.

Anong ififile ko na tax return?

Anonymous said...

Sir, how much po penalty pag late filing ng 1702Q.actually for the 2nd qtr pa po ng 2012 yon.-thanks

Anonymous said...

Hi! I'd like to ask how to get a duplicate copy of my 2013 ITR. Thanks!

Jerome Morada said...

If you are employed then ask at your HR, if not and have filed personally at BIR then at your RDO Office but I think if would take certain time. Anyway, latest ITR is for 2012. Thanks

benz said...

hi jerome, sana masagot mo tanong ko :-)
plan ko kc put up lending business sa provins namin. gusto ko sana iregister sya sa dti at kumuha me ng business permit. as per business coach and entreprener pwede nman mag put up ng micro lending as single proprietorship bsta hwag lang gamitin yung "lending" at "finance" na word sa business name. ngayon ang tanong ko, need ko pa ba mag file ng ITR? eh 4% interest lang a month yung computation ko sa loan na ibibigay ko sa mga borrowers? ano po ba maganda ko gawin? need ko pa ba iparegister lending business ko??? eh yung 5/6 bombay bakit nkakalat lang jan sa tabi tabi, hndi naman hinuhuli ng gobyerno. thanx

Anonymous said...

Hi Jerome, thanks it is very informative. But I am still at a lost. I have this laundry business which started its operation last June 2013. We have not filed anything with the BIR. But our Certificate of Registration says we need to file the ff: Quarterly income tax return, monthly percentage tax return, monthly witholding tax return, annual income tax return. Now how do I do that? The business is till not picking up, since June 2013, we have incurred losses due to the high rentals we pay for the space. Can you recommend any accountant to discuss this with us please. For a minimal fee I hope because we are not really earning yet. Thanks

Jerome Morada said...

Hi Benz! Wala po talaga tayong magagawa kundi mag register ng business, mag-file at magbayad ng tax. Ang magagawa nating magandang paraan ay ipaglaban ang karapatan nating magkaroon ng matuwid na pamumuno sa gobyerno. Mahirap din na gawin ang alam natin na masama o hindi tama, merun din silang tamang panahon, tingnan natin si Napoles, at ang mga senador na nagpakasarap sa pera ng bayan, sa isang iglap sinira nila ang pangalan nila. Marami pong business dyan na pwedeng subukan, focus po kayo sa foods business or anumang necessity ng tao para continuous ang ikot ng puhunan.

@ Anonymous,
- Monthly Percentage Tax is 3% out of Gross Income (BIR Form 2551) depending on business or industry, refer at table of rates in this link..http://www.bir.gov.ph/taxinfo/tax_percnt.htm
- Monthly Withholding Tax from your employees Withheld taxes (BIR Form 1601-C : Monthly Remittance Return of Income Taxes Withheld on Compensation) as you are required to file as employer, or any withheld taxes creditable or not to income tax due.
- Quarterly Income Tax Return (BIR Form 1701Q) and Annual Income Tax Return (BIR Form 1701) - pls refer to respective forms and we have sample layout computation above for your reference. The only difference I think is the applicable exemptions which is applicable only for annual.

Thanks for viewing!