Filing your Income Tax Return this April 15 doesn’t have to be a nerve-racking experience. With the right resources and guidelines, you can easily pay your taxes on time (or before) and keep that tax-related worry off your plate. Check out our handy Pinoy guide for tax filing.
We’ve ensured all the information you need is available in one place, so everything’s a breeze. Filing correctly and on time will help you stay clear of hefty penalties, so give it a read-through and update those forms before your deadline arrives.
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Who are required to file their income taxes?
Generally speaking, residents must file a return from various sources. Likewise, non-residents filing an income tax return are a must if they earn from multiple sources in the Philippines. Failing to comply with filing regulations can result in heavy penalties.
- Resident citizens earn income from various sources inside and outside the Philippines.
- Non-resident Filipino citizens earning and receiving income within the Philippines.
- Resident and non-resident aliens receiving income within the Philippines.
- Domestic corporations earning revenue from sources both outside and inside the Philippines.
- Corporations including partnerships, no matter how created or organized.
- Foreign businesses that earn revenue in the Philippines.
- Trusts and estates in the trade or business
What are the documents to be filed?
The following are a must-haves if you for filing your INCOME TAX RETURN. For submission are the following:
Individuals – Earning Purely Compensation Income (Including Non-Business/Non-Profession Related Income)
- Form 2316
- Form 1700
- Form 1701A
Individuals, Estates, and Trusts
- Form 1701
- Form 1701Q
Corporations, Partnerships, and other Non-Individuals
- Form 1702Q
- Form 1702-EX
- Form 1702-MX
- Form 1702-RT
Not required to file Income Tax returns?
Many taxpayers in the Philippines are required to submit an income tax return each year, but some are exempt. For example, individuals with a gross annual income of less than Php250,000.00. The reason these individuals don’t need to file is that the taxable income threshold falls beneath what the government considers a taxable amount.
- An individual earning purely compensation income whose taxable income does not exceed P250,000.00
- An individual whose income tax has been withheld correctly by his employer, provided that such individual has only one employer for the taxable year
- An individual whose sole income has been subjected to final withholding tax or who is exempt from income tax pursuant to the Tax Code and other special laws.
- An individual who is a minimum wage earner
- e. Those who are qualified under “substituted filing.”
Exempted from Income Tax?
There are some people who are exempt from income. The following are:
- Income from abroad of a non-resident citizen who is:
- A citizen of the Philippines who establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside therein
- A citizen of the Philippines who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for employment permanently
- A citizen of the Philippines who works and derives income from abroad and whose employment thereat requires him to be physically present abroad most of the time during the taxable year
- A citizen previously considered as a non-resident citizen and who arrives in the Philippines at any time during the year to reside permanently in the Philippines will serve as a non-resident citizen during the taxable year in which he arrives in the Philippines, concerning his income derived from sources abroad until the date of his arrival in the Philippines.
- Overseas Filipino Worker, including overseas seaman
- General Professional Partnership
- Government Service Insurance System (GSIS)
- Social Security System (SSS)
- Philippine Health Insurance Corporation (PHIC)
- Local Water Districts (LWD)
Methods of Filing your ITR
You can pay and file your taxes over the following:
- Manual Filing
- Electronic Filing and Payment System (eFPS)
- Electronic BIR Forms (eBIRForms)
Manual filing of ITR
Manually filing your income tax return means a visit to the Regional District Office (RDO) or downloading the forms (found here, plus a detailed explanation on how to file your taxes).
- Download or get three (3) copies of the form (please get 4 copies, instead). Fill them up before going to the nearest RDO-accredited and authorized bank for payment.
- Go to the bank and present your filled-up form together with some documents. You can find them here. We mentioned four (4) copies to be safe, because some banks (like BPI) required to have four copies of the form.
- Keep the copy that has been stamped or verified. That’s your proof of payment and filing for the BIR. If you don’t have any payments, you need to show your documents to BIR for proofing.
Electronic Filing and Payment System (eFPS)
This is more of filing your taxes online using their website.
- Visit the website here and log in. If you don’t have an account, you must enroll first. But we suggest you do it before the deadline nears.
- Fill up the form, then click “SUBMIT.”
- You can file, pay (various online payment channels), and validate your ITR here simultaneously.
Electronic BIR Forms (eBIRForms)
The most easiest and best way to file your taxes! We highly suggest this if you’re a busy person.
- You can find and download the eBIRForms here.
- Extract and install the software.
- After everything goes smoothly, fill up your details and save your info.
- Fill up the required form and save your progress before validating.
- After validating your form, click submit. Wait for a confirmation email.
- Print your four (4) copies of the form and the confirmation email.
- Staple the copies and confirmation email, together with your photocopied COR, if possible.
- Visit an RDO-authorized bank and pay your taxes. That will serve as your proof of payment.
For freelancers and businesses
That’s not all. You alse need to submit your Audited Financial Statement (AFS). Filing your Audited Financial Statement (AFS) with the Bureau of Internal Revenue (BIR) can be done through both manual filing and online filing. For manual filing, you may visit the Regional District Office (RDO) of the BIR to file hard copies of your AFS.
On the other hand, filing may also be accomplished through the Electronic Audited Financial Statements (eAFS) System within the comfort of your own space. Through this system, filing your income tax return in the Philippines has been made more convenient and accessible.
When is the deadline for filing ITRs?
The deadline for filing your income tax return is April 15th of each calendar year, or four months after the closing of your fiscar calendar. This date is non-negotiable and a failure to submit the required filing within this timeline subjects one to possible fines, interest charges or further action from the BIR. Information related to filing an ITR such as application requirements and forms can be obtained through BIR’s website.
Tips on filing your income tax return
Filing your income tax return can be a stressful and time consuming process, but if done correctly you can save yourself time, money, and frustration. Here are six tips to keep in mind when filing your income tax return:
Start early
The earlier you start the process the more prepared you will be. Begin keeping accurate records of all your financial transactions at the beginning of the year so that when it comes time to file your taxes you already have everything ready to go. We suggest as soon as you close your books from the previous year.
Double check your records
Take some extra time before submitting to double check that all of your information is correct and up-to-date. Incorrect or outdated information could result in fines or even an audit from the BIR.
Pay early if you can
If you’re able to pay off any back taxes or other fees early then take advantage of it. This will help ensure that you meet all deadlines and won’t incur any additional penalties or interest charges for late payments.
Make changes now
Any changes that need to be made to accounts should be taken care of before April so that they can be accurately reflected on your tax return. Make sure you make these changes as soon as possible in January or February if you know they are going to occur.
Hire a professional accountant if needed
If filing taxes isn’t something you’re comfortable doing on your own then don’t hesitate to hire a qualified professional accountant who can do it for you and make sure everything is in order. There’s no shame in seeking assistance if needed.
Download programs beforehand
Another great tip is to download any necessary BIR programs or software at least a month prior to the deadline so that everything runs smoothly during the actual filing process and that all documents are processed without delays or issues.
By following these simple tips, you can ensure a stress-free experience when filing your income tax return so that nothing goes wrong and every deadline is met with ease.
