As one of the business-immersed countries in Asia, the Philippines offer a vast line of enterprises to choose from. From large companies to freelancers, running a business comes with a cost – a cost to pay your tax. As a taxpayer, it is but paramount to fulfill the obligation to pay taxes imposed by law (e.g. Estate Tax, Income tax, Documentary Stamp tax, and etc.)
When settling your Income Tax, one must file BIR Form 1700 or 1701.
BIR Form 1700, commonly known as your Annual Income Tax Return form, is acquired by individuals earning income with purely compensation only. This form reflects the transactions accumulated every year. Pursuant to the guidelines following the filing of annual income tax returns of the BIR, individuals obligated to file this form are as follows below:
“This return shall be filed by every resident citizen deriving compensation income from all sources, or resident alien and non-resident citizen with respect to compensation income from within the Philippines, except the following:
BIR Form 1701, internally known as your Annual Income Tax Return form for mixed earners, is acquired by small business owners, self-employed individuals, trusts and estates. This form reflects the transactions accumulated every year. Pursuant to the guidelines following the filing of annual income tax returns of the BIR, individuals obligated to file this form are as follows below:
“BIR Form No. 1701 shall be filed by individuals who are engaged in trade/business or the practice of profession including those with mixed income (i.e., those engaged in the trade/business or profession who are also earning compensation income) in accordance with Sec. 51 of the Code, as amended. The annual income tax return summarizes all the transactions covering the calendar year of the taxpayer.
This return shall be filed by the following individuals regardless of amount of gross income:
Consequently, under the new TRAIN LAW, if an individual earns less than 250,000 annually, they are exempt from paying income tax but are still required to file. So if you fall under this category, you are exempted from paying your Income Tax but you are still subject and required to file for a BIR ITR Form.
Every year, taxpayers are obligated to pay for their Income Tax and file for an Annual Income Tax Return on or before April 15. Individuals may opt to file either manually or electronically (either by electronic Filing and Payment Systems (eFPS) or Electronic BIR Forms (eBIRForms)) with the BIR. For manual filings, taxpayers may visit their nearest Revenue District Office (RDO) to submit their annual Income Tax Return (ITR). For electronic filings, taxpayers may file virtually using the BIR website.
If you want help with your Income Tax Return in the Philippines, you can get in touch with us today by calling +1.806.553.6552 or by reaching out to us at FilePino.