Annual Declaration of Income Tax for Individuals

Sec 74. Declaration of Income Tax for Individuals (amended by TRAIN Law)

 Individuals who receive self-employment income must make and file a declaration of his
estimated income for the current year on or before May 15
 The TRAIN Law has moved the deadline to May 15 (from April 15)
 Self-employed people do not need to file a new ITR on declaration of estimated income
tax since the annual ITR for the preceding year may serve as the declaration
 Self-employment income consists of earnings from the practice of a profession or
conduct of trade or business carried on as a sole proprietor or a partnership of which he
is a member.
 Quarterly payment of income tax in four installments:
o First -- at time of declaration
o Second – August 15
o Third – November 15
o Fourth – on or before May 15 (amended by TRAIN Law (previously April 15))

Quarterly Income Tax Return

Sec 75. Declaration of Quarterly Corporate Income Tax

 A corporation must file tax return for preceding quarter within 60 days following the
close of each quarter.

Final Adjustment Return

Sec 76. Final Adjustment Return

 A corporation will file the final return at the end of either fiscal or calendar year.
 If the sum of the quarterly returns is not equal to the total tax due, the corporation shall
either:
o Pay the balance
o Carry over the excess credit perpetually or
o Be credited or refunded with the excess amount

The corporation can choose only one option and it is irrevocable even if you did
Commented [ASCA1]: This may be discussed with Sec
not get the benefit of overpayment. 51(B) which discusses the filing of Individual Return

Where to File Where to file:

oAuthorized agent banks;
oRevenue District Officer;
Sec 77(A). Place and Time of Filing and Payment of Quarterly Corporate Income Tax oCollection agent;
oDuly authorized Treasurer where he is legally
 Where to file: residing
oOffice of the Commissioner
 o Authorized agent banks;
o Revenue District Officer;
o Collection agent;
o Duly authorized Treasurer of the city or municipality having jurisdiction
over the location of the principal office of the corporation filing the
return, or place where its main books of accounts and other data from
which the return is prepared are kept

When to File

Sec 77(B).Time of Filing the Income Tax Return Commented [ASCA2]: This may be discussed with Sec
51(C) which discusses the filing of Individual Return
 When to file: When to file:
o For quarterly declarations: within 60 days following the close of the o On or before April 15 of each year
quarter
o For final declarations: on or before April 15 or the 15 th day of the 4th
month following the close of the fiscal year

When to Pay

Sec 77(C).Time of Payment of the Income Tax (amended by TRAIN Law; the amendment
applies to both individuals (Sec 56(A)(2)) and corporations) Commented [ASCA3]: This may be discussed with Sec 56
which discusses the payment of Income Tax for Individuals
and Corporation
 When to pay:
o General Rule: It is “pay-as-you-file” and “pay-where-you-file”. When to file:
o Exception: A person may pay in 2 equal installments if the tax due o Same as corporations
exceeds P2, 000.
 TRAIN Law changed the deadline for paying the second
installment for taxes in excess of P2, 000 to October 15 (from July
15).
 The first installment shall be paid at the time the return is filed.

Withholding on Wages Commented [ASCA4]: May be discussed with Sections

57 and 58
Sec 78. Definitions: Wages, Payroll Period, Employee, Employer

 Wages are all remuneration other than fees paid to a public official for services
performed by an employee for his employer (cash or kind), EXCEPT:
 o Agricultural labor paid entirely in products of the farm where the labor is
performed
o Domestic service in a private home
o Casual labor not in the course of the employer’s trade or business
o Services by a citizen or resident of the Philippines for a foreign
government or international organization
 Backwages, allowances and benefits awarded in a labor dispute are considered
withholding tax on wages. (RMC 39-2012)

Sec 79. Income Tax Collected at Source

 General Rule: Every employer making payment of wages shall deduct and withhold from
wages.
 Exception: minimum wage earners
 Refunds or credits:
o To the employer: when there was an overpayment but only to the extent
that the amount of overpayment was not withheld by the employer
o To the employee: any excess of taxes withheld shall be returned or
credited within 3 months from April 15, these refunds will earn interest
at 6% per annum after the lapse of the 3-month period.

 The TRAIN Law has repealed Sections 79(D) and Section 79(F). In effect, the personal
and additional exemptions for which an employee is previously entitled, and the
withholding from the wages of the wife are not applicable anymore.

Sec 80. Liability for Tax

 Employer shall be liable if he fails to withhold and remit. It shall be collected from him
with penalties.

Sec 81. Filing of Return and Payment of Taxes Withheld

 Should be filed and paid within 25 days from the close of each calendar quarter

Sec 82. Return and Payment in Case of Government Employees and Sec 83. Statements and
Returns

 Employees must submit annual return on or before January 31 of the succeeding year
containing all relevant employee information