W

HO
HAT
HERE
HEN
HY
WHO are required to register?
1.SELF-EMPLOYED INDIVIDUALS /
PROFESSIONALS (including JOs and Contracts
of Service)

2.CORPORATIONS/ASSOCIATIONS/
COOPERATIVES/NGA’S
WHAT to do?

Submit COMPLETE requirements

to your RDO
Attend taxpayer’s briefing at the
RDO.
Once registered, you will
receive:

 CERTIFICATE OF REGISTRATION (COR)

 AUTHORITY TO PRINT INVOICES
 APPROVED BOOKS OF ACCOUNTS
 ETC.
WHERE to register?

Find the Revenue

District Office(RDO)
that has jurisdiction
over your principal
place of business.
WHEN to register?

ON OR BEFORE THE

START OF BUSINESS
OPERATION
(Sec. 236 of the Tax Code)
WHY would you register with the BIR?

Reasons include, but not limited to, the ff:

Itis a mandate of the government.

To avoid penalties
To issue valid receipts/invoices
Etc.
SELF-EMPLOYED INDIVIDUALS /
PROFESSIONALS
TAX DUE FORM TO BE DEADLINE
USED
1. Annual 0605 ON OR BEFORE JAN 31 OF
Registration Fee THE YEAR
(P 500.00)

2. Income Tax 1701-Q 1Q-May 15; 2Q-Aug 15; 3Q-Nov 15

Return 1701 APRIL 15 NEXT YEAR
- Quarterly
- Annual
SELF-EMPLOYED INDIVIDUALS /
PROFESSIONALS
TAX DUE FORM TO BE DEADLINE
USED
3. Percentage Tax 2551Q 1Q-April 25; 2Q-Jul 25;
(Quarterly) – (3M 3Q-Oct25; 4Q-Jan 25
and below)
or
Value-Added Tax
- quarterly 2550Q 1Q-April 25; 2Q-Jul 25;
(above 3M) 3Q-Oct25; 4Q-Jan 25
SELF-EMPLOYED INDIVIDUALS /
PROFESSIONALS
TAX DUE FORM TO DEADLINE
BE USED
4. Expanded
Withholding Tax (EWT)
- monthly 0619E 10th day of the ff month
- quarterly 1601E-Q Last day of the next month
after the close of the
quarter

5. Withholding on
Compensation 1601C 10th day of the ff month
HOW TO COMPUTE INCOME
TAX FOR INDIVIDUALS?
 INCOME TAX RATES ON INDIVIDUAL CITIZEN
AND INDIVIDUAL RESIDENT ALIEN

From Year 2023 Onwards:

RANGE OF TAXABLE INCOME TAX DUE = a + (b x c)
BASIC ADDITIONAL OF OVER
OVER NOT OVER (a) (b) (c)

- 250,000.00 -   -
250,000.00 400,000.00 - 15% 250,000.00
400,000.00 800,000.00 22,500.00 20% 400,000.00
800,000.00 2,000,000.00 102,500.00 25% 800,000.00
2,000,000.00 8,000,000.00 402,500.00 30% 2,000,000.00
8,000,000.00
BIR's IT Team - 2,202,500.00 35%17 8,000,000.00
(INDIVIDUALS – SELF-EMPLOYED)
BASIC FORMULA: SALES
less: DEDUCTIONS *
= NET TAXABLE INCOME

*ITEMIZED OR 40% OPTIONAL STANDARD DEDUCTION

A.OPTIONAL STANDARD DEDUCTION
- 40% of gross
sales/receipt/revenue/fees.

- No need to submit the Account

Information Form (AIF) or Financial
Statements

BACK
EXAMPLE:

1ST QTR GROSS SALES P 450,000.00

X 40%
OSD P 180,000.00
Gross Sales 450,000
Less: OSD 180,000
Taxable Income 270,000

1st quarter Income Tax Due

(270,000 – 250,000) x 15% 3,000.00
B. ITEMIZED DEDUCTION
- includes all the ordinary and necessary
expenses paid or incurred during the taxable
year related to the operation of your business
or practice of your profession.
- Keep a file of your Official
Receipt/Cash/Sales Invoice, Payroll,
Vouchers, Bank Statements, Debit/Credit
Memo.
BACK
* see list of itemized deductions.
EXAMPLES:

RENTAL EXPENSES
SALARIES AND WAGES
REPAIRS AND MAINTENANCE
PROFESSIONAL FEE
DEPRECIATION EXPENSE
TAXES AND LICENSES
and ETC.
EXAMPLE:

1ST QTR GROSS SALES P 450,000.00

Less: Total Itemized Deductions 180,000.00

Taxable Income P 270,000.00

Gross Sales 450,000
Less: OSD 180,000
Taxable Income 270,000

1st quarter Income Tax Due

(270,000 – 250,000) x 15% 3,000.00
PERCENTAGE TAX 1% of GROSS Sales
(Quarterly)

Computation:

1st month Gross Sales 30,000.00

2nd month Gross Sales 50,000.00
3rd month Gross Sales 60,000.00
Total quarterly Gross Sales 140,000.00

Percentage Tax Due =

(P 140,000 x 1%) P 1,400.00 BACK
VALUE ADDED TAX
(Monthly and Quarterly)

2550Q (Quarterly)

• Due on the 25th day of the month following the end of a

particular quarter (Form 2550Q)

*Include the Summary List of Sales and Purchases and

Importation
VALUE ADDED TAX 12% of NET SALES
(Monthly and Quarterly)

Computation:

Gross Sales of P300,000.00 Gross Purchases of P 180,000.00

Net Sales is P 267, 857.14 Net Purchases is P 160,714.29
(P300,000 / 1.12) (P180,000 / 1.12)

OUTPUT TAX is INPUT TAX is

(P267,857.14 x 12%) = (P160,714.29 x 12%) =
P 32, 142.86 P 19,285.71

VAT DUE = OUTPUT – INPUT

= 32, 142.86 – 19, 285.71
= 12, 857.15 BACK
OPTIONS IN FILING INCOME TAX RETURNS
(PER TRAIN LAW)
 USING GRADUATED  USING THE 8% INCOME
RATES TAX FLAT RATE (IN
EXCESS OF P 250,000)
YOU WILL FILE:
 INCOME TAX RETURN YOU WILL FILE:
 PERCENTAGE TAX  INCOME TAX RETURN
(WITH 8% FLAT RATE)
HOW TO COMPUTE THE 8% INCOME TAX
RATE?

EXAMPLE:

1ST QTR GROSS SALES P 100,000.00

Less: 250,000.00
Taxable Income (150,000.00)
Multiply by 8%
Income Tax Due P 0.00
HOW TO COMPUTE THE 8% INCOME TAX
RATE?

2nd QTR GROSS SALES P 180,000

Add: Previous Quarter Sales P 100,000
Total P 280,000
Less: P 250,000
Taxable Income P 30,000
Multiply by 8%
Income Tax Due P 2,400
Less: Paid 1st quarter P 0.00
Tax to be Paid P 2,400
SOME Expenses mandatorily required to be subjected to EWT:

1. ADVERTISING – 2%
2. RENTAL – 5%
3. SECURITY – 2%
4. MESSENGERIAL
ACTIVITIES/PROMOTIONS – 2%
5. PROFESSIONAL FEES – 5% OR 10%
6. CONTRACTORS – 2%

BACK
WITHHOLDING ON COMPENSATION
(1601-C):
Any employer who employs people
other than the Minimum Wage Earner
are required to withhold salaries from
its employees and remit the same to
the BIR.

REFUND any excess taxes you withheld

on the compensation of your
employees.
FILE the ANNUAL INFORMATION
RETURNS:

BIR FORM 1604 C (COMPENSATION)

ON OR BEFORE JANUARY 31

BIR FORM 1604-E (EXPANDED)

ON OR BEFORE MARCH 1
NON-INDIVIDUALS

TAX DUE FORM TO BE DEADLINE

USED
1. Annual 0605 ON OR BEFORE JAN 31 OF
Registration Fee THE YEAR
(P 500.00)

2. Income Tax
60 days after the close of the quarter
Return 1702-Q
APRIL 15 NEXT YEAR
- Quarterly 1702
- Annual
NON-INDIVIDUALS

TAX DUE FORM TO BE DEADLINE

USED
3. Percentage Tax 2551Q 1Q-April 25; 2Q-Jul 25;
(Quarterly) – (3M 3Q-Oct25; 4Q-Jan 25
and below)
or
Value-Added Tax
- quarterly 2550Q 25th day after the close of
(above 3M) the quarter
NON-INDIVIDUALS

TAX DUE FORM TO DEADLINE

BE USED
4. Expanded
Withholding Tax (EWT)
- monthly 0619E 10th day of the ff month
- quarterly 1601E-Q Last day of the next month
after the close of the
quarter

5. Withholding on
Compensation 1601C 10th day of the ff month
 HOW TO COMPUTE INCOME
TAX FOR NON-
INDIVIDUALS?
CORPORATE INCOME TAX (CREATE LAW) :
25% - Regular income tax rate
20% - whose net taxable income ≤5M
& total assets ≤100M, exclusive of land
1% - Proprietary Non-Profit Educational/Hospital
1% - MCIT (minimum corporate income tax)
 WHAT TO DO DURING ACTUAL BUSINESS
TRANSACTIONS? DO’S AND DON’T’S

Regularly issue valid receipts/invoices

Register CRM/POS machines before using
Record everyday transactions in the
books of accounts
Keep books of accounts in the place of
business
WHAT TO DO DURING ACTUAL BUSINESS
TRANSACTIONS? DO’S AND DON’T’S

Do not use unregistered books of

accounts
Display your COR and BIR form 0605
File and pay BIR returns regularly
WHAT TO DO DURING ACTUAL BUSINESS
TRANSACTIONS? DO’S AND DON’T’S

File returns even when there is no

payment to be made to avoid OPEN
CASES.
Update your BIR registration using BIR
Form 1905 when there is a change in
information ( e.g. address, trade
name, etc)
WHAT TO DO DURING ACTUAL BUSINESS
TRANSACTIONS? DO’S AND DON’T’S

SecureTax Clearance in the event of

BUSINESS CLOSURE OR CESSATION.
PENALTIES:

1. FOR LATE FILING

A. SURCHARGE (25%)
B. INTEREST (12% PER ANNUM)
C. COMPROMISE PENALTY (MINIMUM OF 1,000 PHP)

FOR NO PAYMENT RETURNS, COMPROMISE PENALTY

WILL BE BASED ON THE GROSS SALES DECLARED.
PENALTIES:

2. FOR WRONG VENUE RETURNS

(ex: EFPS filers paying manually)
a. 25% SURCHARGE
b. COMPROMISE PENALTY OF P1,000.00
OTHER PENALTIES:
2. FAILURE TO DISPLAY
1. FAILURE TO REGISTER YOUR ANNUAL
YOUR BUSINESS BEFORE REGISTRATION RETURN (BIR
THE START OF OPERATION. FORM 0605).
P 20,000.00 P 1,000.00 or
imprisonment of not
more than 6 months
OTHER PENALTIES:
4. FAILURE TO ATTACH
AUTHORIZED STICKER
3. FAILURE TO DISPLAY THE AUTHORIZING THE USE OF
COR (BIR FORM 2303). POS/CRM/CAS.
P 1,000.00 or P 1,000.00 per unit
imprisonment of of machine
not more than 6
months
OTHER PENALTIES:

5. USE OF UNREGISTERED 6. FAILURE TO ISSUE

MACHINE (POS/CRM/CAS) RECEIPTS/ INVOICES
P 25,000.00 per P 10,000.00 1st
unit of machine offense
P 20,000 2nd offense
OTHER PENALTIES:
8. USING INVOICES WHERE
THE ORIGINAL IS DETACHED
7. REFUSAL TO ISSUE AND THE DUPLICATE IS
RECEIPTS/INVOICES BLANK.
P 20,000 1st P 10,000 1ST offense
offense
25,000 2nd
offense
OTHER PENALTIES:
9. FAILURE TO SUPPLY
CORRECT INFORMATION IN
THE RECEIPTS/INVOICES.
P 1,000.00 per
incorrect/lacking
information
OTHER PENALTIES:
BOOKEEPING
REQUIREMENTS:
FAILURE TO:
 Register books of accounts 1,000 to 50,000
 Maintain books of depending on
accounts in the business
premises the annual gross
 Update entries in the sales
books
 DO NOT ATTEMPT TO EVADE OR
DEFEAT ANY IMPOSED TAX by the
NIRC for this violation cannot be
compromised because it involves
fraud.
Question and Answer
?