Income Tax - Bureau of Internal Revenue PDF

9/11/2019 Income Tax - Bureau of Internal Revenue
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You are here: Home (/index.php) Tax Information (/index.php/tax-information.html) Income Tax
Index for Income Tax:
Income Tax Description

Who Are Required to File Income Tax Returns?
Annual Income Tax For Individuals Earning Purely Compensation Income (Including Non-Business/Non-Profession Related Income)
Annual Income Tax For Individuals, Estates, and Trusts
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)
Quarterly Income Tax For Individuals, Estates and Trusts (Including Those With Mixed Income, i.e., Compensation Income and Income from Business and/or
Practice of Profession)
Annual Income Tax For Corporations and Partnerships
Account Information Form For Corporations and Partnerships
Quarterly Income Tax For Corporations and Partnerships
Improperly Accumulated Earnings Tax For Corporations
Annual Income Information Form for General Professional Partnerships
Income Tax Rates
Related Revenue Issuances
Frequently Asked Questions (FAQs)
Income Tax Description
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 if any, authorized for such types of income, by the Tax
Code, as amended, or other special laws.
Who are Required to File Income Tax Returns?
Individuals
Resident citizens receiving income from sources within or outside the Philippines
Employees deriving purely compensation income from two or more employers, concurrently or successively at any time 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
9/11/2019
Self-employed individuals receiving income from the conduct of tradeIncome Tax - Bureau
or business of Internal
and/or Revenue
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
Non-resident citizens receiving income from sources within the Philippines
Aliens, whether resident or not, receiving income from sources within the Philippines
Non-Individuals
Corporations including partnerships, no matter how created or organized.
Domestic corporations receiving income from sources within and outside the Philippines
Foreign corporations receiving income from sources within the Philippines
Estates and trusts engaged in trade or business
[return to index]
Annual Income Tax For Individuals Earning Purely Compensation Income (Including Non-Business/Non-Profession Related
Income)
BIR Form 1700 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82310BIR%20Form%201700.pdf) - Annual Income Tax For Individuals Earning Purely
Compensation Income (Including Non-Business/Non-Profession Related Income)
Documentary Requirements
1. Certificate of Income Tax Withheld on Compensation (BIR Form 2316 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/16992316.pdf))
2. Duly approved Tax Debit Memo, if applicable
3. Proofs of Foreign Tax Credits, if applicable

4. Income
9/11/2019 Tax Return previously filed and proof of payment, if filing an amended return
Income Tax for the
- Bureau sameRevenue
of Internal taxable year.
Procedures
1. For Electronic Filing and Payment System (eFPS) Filer
a. Fill-up applicable fields in the BIR Form No. 1700 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82310BIR%20Form%201700.pdf)
b. Pay electronically by clicking the "Proceed to Payment" button and fill-up the required fields in the "eFPS Payment Form" click "Submit" button.
c. Receive payment confirmation from eFPS-AABs (https://www.bir.gov.ph/index.php/list-of-authorized-agent-banks.html) for successful e-filing and e-payment.
2. For Non-eFPS Filer
a. Fill-up applicable fields in the BIR Form No. 1700 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82310BIR%20Form%201700.pdf) in the downloaded
Electronic Bureau of Internal Revenue Form (eBIRForm) Package
b. Print the duly accomplished BIR Form No. 1700 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82310BIR%20Form%201700.pdf)
c. Proceed to the nearest Authorized Agent Bank ( AAB (https://www.bir.gov.ph/index.php/list-of-authorized-agent-banks.html)) under the jurisdiction of the Revenue
District Office where you are registered and present the duly accomplished BIR Form 1700, together with the required attachments and your payment.
d. In places where there are no AABs (https://www.bir.gov.ph/index.php/list-of-authorized-agent-banks.html), 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 1700,
together with the required attachments and your payment.
e. Receive your copy of the duly stamped and validated form from the teller of the AABs (https://www.bir.gov.ph/index.php/list-of-authorized-agent-
banks.html)/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. For Manual Filer
a. Fill-up the BIR Form No. 1700 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82310BIR%20Form%201700.pdf) in triplicate copies.
b. Proceed to the Revenue District Office where you are registered or to any Tax Filing Center established by the BIR and present the duly accomplished BIR Form
1700 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82310BIR%20Form%201700.pdf), together with the required attachments.
c. Receive your copy of the duly stamped and validated form from the RDO/Tax Filing Center representative.
Deadline
On or
9/11/2019 before the 15th day of April of each year covering taxable income for calendar
Income year
Tax - Bureau 2018 and
of Internal thereafter
Revenue
[return to index]
Annual Income Tax For Individuals, Estates, and Trusts
BIR Form 1701 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82255BIR%20Form%201701.pdf) - Annual Income Tax Return Individuals, Estates and Trusts
1. Certificate of Income Tax Withheld on Compensation (BIR Form 2316 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/16992316.pdf)), if applicable
2. Certificate of Income Payments Not Subjected to Withholding Tax (BIR Form 2304 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/15532304PDF.pdf)), if
applicable
3. Certificate of Creditable Tax Withheld at Source (BIR Form 2307 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/16832307%20Final.pdf)), if applicable
5. Proof of Foreign Tax Credits, if applicable
6. Income Tax Return previously filed and proof of payment, if filing an amended return for the same year
7. Account Information Form (AIF) or the Certificate of the independent Certified Public Accountant (CPA) with Audited Financial Statements if the gross annual sales,
earnings, receipts or output exceed three million pesos (P3,000,000.00)
8. Account Information Form or Financial Statements not necessarily audited by an independent CPA if the gross annual sales, earnings, receipts or output do not
exceed P3,000,000.00 and is subject to graduated income tax rates under Section 24(A)(2)(a)
9. Proof of prior year’s excess tax credits, if applicable
Procedures
1. For eFPS Filer
a. Fill-up applicable fields in the BIR Form No. 1701 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82255BIR%20Form%201701.pdf)
b. Pay electronically by clicking the “Proceed to Payment” button and fill-up the required fields in the “eFPS Payment Form” then click “Submit” button.
9/11/2019
c. Receive Income Tax - Bureau of Internal Revenue
payment confirmation from eFPS-AABs (https://www.bir.gov.ph/index.php/list-of-authorized-agent-banks.html) for successful e-filing and e-payment.
a. Fill-up fields in the BIR Form No. 1701 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82255BIR%20Form%201701.pdf) in the downloaded Electronic
Bureau of Internal Revenue Form (eBIRForm) Package
b. Print the duly accomplished BIR Form No. 1701 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82255BIR%20Form%201701.pdf)
District Office where you are registered and present the duly accomplished BIR Form 1701
(https://www.bir.gov.ph/images/bir_files/old_files/pdf/82255BIR%20Form%201701.pdf), together with the required attachments and your payment.
3. For Manual Filer
a. Fill-up the BIR Form No. 1701 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82255BIR%20Form%201701.pdf) in triplicate copies.
1701 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82255BIR%20Form%201701.pdf), together with the required attachments.
Deadline
Final Adjustment Return or Annual Income Tax Return - On or before the 15th day of April of each year covering income for calendar year 2018 and thereafter
[return to index]
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)
BIR
9/11/2019 Form 1701 AIF (https://www.bir.gov.ph/images/bir_files/old_files/pdf/19091701AIF(ENCS)%20full.pdf)
Income Tax - Bureau of Internal Revenue - 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 Sec. 71 of RA 10963, otherwise known as Tax Reform Acceleration and Inclusion Act, amending Sec. 232 of the Tax Code, as amended,
in relation to Revenue Memorandum Circular No. 6 – 2001, corporations, companies or persons whose gross annual sales, earnings, receipts or output
exceed P3,000,000 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.
None
Procedures
1. Accomplish BIR Form 1701 AIF (https://www.bir.gov.ph/images/bir_files/old_files/pdf/19091701AIF(ENCS)%20full.pdf) in triplicate.
2. Attach the same to BIR Form 1701.
Deadline
Same deadline as BIR Form 1701 - On or before the 15th day of April of each year covering taxable income for calendar year 2018 and thereafter
[return to index]
Quarterly Income Tax For Individuals, Estates And Trusts Including Those With Mixed Income, i.e., Compensation Income and
Income from Business and/or Practice of Profession
BIR Form 1701Q (https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1701Q%20Jan%202018%20final%20rev2.pdf) -

Quarterly Income Tax Return For Individuals, Estates and Trusts
3. Proof of other payment/s made, if applicable
4. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source (SAWT), if applicable
Procedures
1. For eFPS Filer
a. Fill-up applicable fields in the BIR Form No. 1701Q

(https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1701Q%20Jan%202018%20final%20rev2.pdf)
a. Fill-up applicable fields in the BIR Form No. 1701Q

(https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1701Q%20Jan%202018%20final%20rev2.pdf) in the downloaded
Electronic Bureau of Internal Revenue Form (eBIRForm) Package
b. Print the duly accomplished BIR Form No. 1701Q

(https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1701Q%20Jan%202018%20final%20rev2.pdf)
c. Proceed to the nearest Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office where you are registered and present the duly
accomplished BIR Form 1701Q
(https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1701Q%20Jan%202018%20final%20rev2.pdf), together with the
required attachments and your payment.
Authorized City or Municipal Treasurer located within the Revenue District Office where you are registered and present the duly accomplished BIR Form 1701Q
(https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1701Q%20Jan%202018%20final%20rev2.pdf), together with the
required attachments and your payment.
e. Receive your copy of the duly stamped and validated tax return and BIR prescribed deposit slip from the teller of the AABs (https://www.bir.gov.ph/index.php/list-
of-authorized-agent-banks.html) or Electronic Revenue Official Receipt (eROR) from the Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. For Manual Filer
9/11/2019
a. Fill-up the BIR Income Tax - Bureau of InternalForm
Revenue No. 1701Q
(https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1701Q%20Jan%202018%20final%20rev2.pdf) in triplicate copies
(Compensation Income need not be reported in the Quarterly Income Tax Return and is to be declared only on the Annual Income Tax Return).
1701Q (https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1701Q%20Jan%202018%20final%20rev2.pdf), together with the
required attachments.
c. Receive your copy of the duly stamped and validated form from the RDO.
Deadlines
May 15 of the current taxable year– for the first quarter

August 15 of the current taxable year – for the second quarter
November 15 of the current taxable year – for the third quarter
[return to index]
Annual Income Tax For Corporations And Partnerships
BIR Form 1702 - Annual Income Tax Return (For Corporations and Partnerships)
1. Certificate of Income Payments Not Subjected to Withholding Tax (BIR Form 2304 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/15532304PDF.pdf)), if
applicable
4. Proof of Foreign Tax Credits, if applicable
5. Income tax return previously filed and proof of payment, if amended return is filed for the same taxable year
6. Account Information Form (AIF) or the Certificate of the independent CPA with Audited Financial Statements, if the gross annual sales, earnings, receipts or output
exceed P3,000,000.
9/11/2019
7. Proof of prior year’s excess tax credits, if applicable Income Tax - Bureau of Internal Revenue
Procedures
1. For eFPS Filer
a. Fill-up applicable fields in the BIR Form No. 1702
a. Fill-up fields in the BIR Form No. 1702 in the downloaded Electronic Bureau of Internal Revenue Form (eBIRForm) Package
b. Print the duly accomplished BIR Form No. 1702
District Office where you are registered and present the duly accomplished BIR Form 1702, together with the required attachments and your payment.
3. For Manual Filer
a. Fill-up the BIR Form No. 1702 in triplicate copies.
1702, together with the required attachments.
Deadline
Final Adjustment
9/11/2019 Return or Annual Income Tax Return - On or before the 15th
Income day
Tax of theof fourth
- Bureau Internalmonth
Revenuefollowing the close of the taxpayer’s taxable year
[return to index]
Account Information Form For Corporations And Partnerships
BIR Form 1702 AIF - Account Information Form (For Corporations and Partnerships)
NOTE: Pursuant to Sec. 71 of RA 10963, otherwise known as Tax Reform Acceleration and Inclusion Act, amending Sec. 232 of the Tax Code, as amended,
in relation toRevenue Memorandum Circular No. 6 – 2001, corporations, companies or persons whose gross annual sales, earnings, receipts or output
exceed P3,000,000 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.
None
Procedures
1. Accomplish BIR Form 1702 AIF in triplicate.
2. Attach the same to BIR Form 1702.
Deadline
Same deadline as BIR Form 1702 - On or before the 15th day of the fourth month following the close of the taxpayer’s taxable year
[return to index]
Quarterly Income Tax For Corporations And Partnerships
BIR Form 1702Q (https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf) - Quarterly Income Tax Return (For Corporations and
Partnerships)

9/11/2019
3. Previously filed return, if an amended return is filed for the same quarterIncome Tax - Bureau of Internal Revenue
Procedures
1. For eFPS Filer
a. Fill-up applicable fields in the BIR Form No. 1702Q (https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf)
a. Fill-up applicable fields in the BIR Form No. 1702Q (https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf) in the downloaded Electronic
Bureau of Internal Revenue Form (eBIRForm) Package
b. Print the duly accomplished BIR Form No. 1702Q (https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf)
District Office where you are registered and present the duly accomplished BIR Form 1702Q
(https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf), together with the required attachments and your payment.
Authorized City or Municipal Treasurer located within the Revenue District Office where you are registered and present the duly accomplished BIR Form 1702Q
(https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf), together with the required attachments and your payment.
e. Receive your copy of the duly stamped and validated tax return and BIR prescribed deposit slip from the teller of the AABs or Electronic Revenue Official Receipt
(eROR) from the Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. For Manual Filer
a. Fill-up the BIR Form No. 1702Q (https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf) in triplicate copies.
1702Q (https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf), together with the required attachments.
c. Receive your copy of the duly stamped and validated

https://www.bir.gov.ph/index.php/tax-information/income-tax.html form from the RDO. 12/28
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
[return to index]
Improperly Accumulated Earnings Tax For Corporations
BIR Form 1704 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/30121704%20(MAY2001)%20final.pdf) - Improperly Accumulated Earnings Tax Return (For
Corporations)
1. Photocopy of Annual Income Tax Return (BIR Form 1702) with Audited Financial Statements and/or Account Information Form of the covered taxable year duly
received by the BIR; and
2. Sworn declaration as to dividends declared taken from the covered year's earnings and the corresponding tax withheld, if any.
Procedures
1. Fill-up BIR Form 1704 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/30121704%20(MAY2001)%20final.pdf) in triplicate.
2. If there is payment:
Proceed to the nearest Authorized Agent Bank ( AAB (https://www.bir.gov.ph/index.php/list-of-authorized-agent-banks.html)) of the Revenue District Office where
you are registered and present the duly accomplished BIR Form 1704, together with the required attachments and your payment.
In places where there are no AABs (https://www.bir.gov.ph/index.php/list-of-authorized-agent-banks.html), 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 1704.
Receive your copy of the duly stamped and validated form from the teller of the AABs (https://www.bir.gov.ph/index.php/list-of-authorized-agent-
3. If there is no payment:
Proceed to the Revenue District Office where you are registered and present the duly accomplished BIR Form 1704
(https://www.bir.gov.ph/images/bir_files/old_files/pdf/30121704%20(MAY2001)%20final.pdf), together with the required attachments.
9/11/2019
Receive your copy of the duly stamped and validated form from the Income Tax - Bureau of Internal Revenue
RDO representative
Deadline
Within fifteen (15) days after the close of the taxable year
[return to index]
Annual Income Information Form for General Professional Partnerships
Sec. 55. Returns of General Professional Partnership (Tax Code of 1997, as amended)
Every general professional partnership shall file, in duplicate, a return of its income, except income exempt under Section 32 (B) of this Title, setting forth the
items of gross income and of deductions allowed by this Title, and the names, Taxpayer Identification Numbers (TIN), addresses and shares of each of the
partners.
[return to index]
Income Tax Rates
I. For Individual Citizens and Resident Aliens Earning Purely Compensation Income and Individuals Engaged in Business and Practice of Profession
A. Graduated Income Tax Rates under Section 24(A)(2) of the Tax Code of 1997, as amended by Republic Act No. 10963
Amount of Net Taxable Income Rate

Over But Not Over
- P250,000 0%
P250,000 P400,000 20% of the excess over P250,000
P400,000 P800,000 P30,000 + 25% of the excess over P400,000
P800,000 P2,000,000 P130,000 + 30% of the excess over P800,000
P2,000,000 P8,000,000 P490,000 + 32% of the excess over P2,000,000
P8,000,000 P2,410,000 + 35% of the excess over P8,000,000
B. For Purely Self-Employed Individuals and/or Professionals Whose Gross Sales/Receipts and Other Non-Operating Income Do Not Exceed the VAT Threshold of
P3,000,000, the tax shall be, at the taxpayer’s option:
1. 8% Income Tax on Gross Sales or Gross Receipts in Excess of P250,000 in Lieu of the Graduated Income Tax Rates and the Percentage Tax; Or
2. Income Tax Based on the Graduated Income Tax Rates

C. For
9/11/2019 Individuals Earning Both Compensation Income and Income from Business
Income and/or
Tax - Bureau of Practice of Profession, their income taxes shall be:
Internal Revenue
1. For Income from Compensation: Based on Graduated Income Tax Rates; and
2. For Income from Business and/or Practice of Profession:
a. If the total Gross Sales/Receipts Do Not Exceed VAT Threshold of P3,000,000, the Individual Taxpayer May Opt to Avail:
i. 8% Income Tax on Gross Sales/Receipts and Other Non-Operating Income in Lieu of the Graduated Income Tax Rates and the Percentage Tax; Or
ii. Income Tax Based on Graduated Income Tax Rates
b. If the total Gross Sales/Receipts Exceed VAT Threshold of P3,000,000
i. Income Tax Based on Graduated Income Tax Rates
D. On Certain Passive Income of Individual Citizens and Resident Aliens
Passive Income Tax Rate

1. Interest from currency deposits, trust funds and deposit substitutes 20%
2. Royalties (on books as well as literary & musical compositions) 10%
- In general 20%
3. Prizes (P10,000 or less ) Graduated
Income Tax
Rates
- Over P10,000 20%
4. Winnings (except from PCSO and Lotto amounting to P10,000 or less ) 20%
- From PCSO and Lotto amounting to P10,000 or less exempt
5. Interest Income from a Depository Bank under the Expanded Foreign 15%
Currency Deposit System
6. Cash and/or Property Dividends received by an individual from a domestic 10%
corporation/ joint stock company/ insurance or mutual fund companies/ Regional
Operating Headquarter of multinational companies
7. Share of an individual in the distributable net income after tax of a partnership 10%
(except GPPs)/ association, a joint account, a joint venture or consortium
taxable as corporation of which he is a member or co-venture
8. Capital gains from sale, exchange or other disposition of real property located 6%
in the Philippines, classified as capital asset
9. Net Capital gains from sale of shares of stock not traded in the stock 15%
exchange
9/11/2019 Income Tax
10. Interest Income from long-term deposit or -investment
Bureau of Internal
in theRevenue
form of savings, Exempt
common or individual trust funds, deposit substitutes, investment management
accounts and other investments evidenced by certificates in such form
prescribed by the Bangko Sentral ng Pilipinas (BSP)
Upon pre-termination before the fifth year, there should be imposed on the
entire income from the proceeds of the long-term deposit based on the
remaining maturity thereof:
Holding Period
- Four (4) years to less than five (5) years 5%
- Three (3) years to less than four (4) years 12%
- Less than three (3) years 20%
II. For Non-Resident Aliens Not Engaged in Trade or Business
A. Tax Rate in General – on taxable income from all sources within the same manner
Philippines as individual
citizen and
resident alien
individual
B. Certain Passive Income Tax Rates
1. Interest from currency deposits, trust funds and deposit substitutes 20%
2. Royalties (on books as well as literary & musical compositions) 10%
- In general 20%
3. Prizes (P10,000 or less ) Graduated
Income Tax
Rates
- Over P10,000 20%
4. Winnings (except from PCSO and Lotto) 20%
- From PCSO and Lotto exempt
5. Cash and/or Property Dividends received from a domestic corporation/ joint 20%
stock company/ insurance/ mutual fund companies/ Regional Operating
Headquarter of multinational companies
6. Share of a non-resident alien individual in the distributable net income after 20%
tax of a partnership (except GPPs) of which he is a partner or from an
association, a joint account, a joint venture or consortium taxable as
corporation of which he is a member or co-venture
9/11/2019 Income Taxor- Bureau
7. Interest Income from long-term deposit of Internal
investment inRevenue
the form of Exempt
savings, common or individual trust funds, deposit substitutes, investment
management accounts and other investments evidenced by certificates in
such form prescribed by the Bangko Sentral ng Pilipinas (BSP)
Upon pre-termination before the fifth year, there should be imposed on the
entire income from the proceeds of the long-term deposit based on the
remaining maturity thereof:
Holding Period
- Four (4) years to less than five (5) years 5%
- Three (3) years to less than four (4) years 12%
- Less than three (3) years 20%
8. Capital from the sale, exchange or other disposition of real property located 6%
in the Philippines classified as capital asset
9. Net Capital gains from sale of shares of stock not traded in the Stock
Exchange
- Not over P100,000 5%
- Any amount in excess of P100,000 10%
III. For Non-resident Aliens Not Engaged in Trade or Business
1. Gross amount of income derived from all sources within the Philippines 25%
2. Capital gains from the exchange or other disposition of real property located in the 6%
Philippines
3. Net Capital gains from the sale of shares of stock not traded in the Stock Exchange
- Not Over P100,000 5%
- Any amount in excess of P100,000 10%
IV. For Alien Individuals Employed by Regional Headquarters (RHQ) or Area Headquarters and Regional Operating Headquarters (ROH) of Multinational Companies,
Offshore Banking Units (OBUs), Petroleum Service Contractor and Subcontractor
On the gross income consisting of salaries, wages, annuities, compensation, Graduated

remuneration and other emoluments, such as honoraria and emoluments Income Tax
derived from the Philippines Rates
V. For General Professional Partnerships
Net Income of the Partnerships 0%
VI. For Domestic Corporations
9/11/2019 Rates of Tax on Certain Passive Income ofTax
Income Corporations
- Bureau of Internal Revenue Tax Rate
1. Interest from currency deposits, trust funds, deposit substitutes and similar 20%
arrangements received by domestic corporations
2. Royalties from sources within the Philippines 20%
3. Interest Income from a Depository Bank under Expanded Foreign Currency 15%
Deposit System
4. Cash and Property Dividends received by a domestic corporation from 0%
another domestic corporation
5. Capital gains from the sale, exchange or other disposition of lands and/or 6%
building
6. Net Capital gains from sale of shares of stock not traded in the stock 15%
exchange
*Beginning on the 4th year immediately following the year in which such corporation commenced its business operations, when the minimum corporate income tax
is greater than the tax computed using the normal income tax.
VII. For Resident Foreign Corporation
1) a. In General – on taxable income derived from sources within the 30%

Philippines
b. Minimum Corporate Income Tax – on gross income 2%
c. Improperly Accumulated Earnings – on improperly accumulated taxable 10%
income
2) International Carriers – on gross Philippine billings 2½%
3) Regional Operating Headquarters of Multinational Companies– on taxable 10%
income
4.) Regional or Area Headquarters of Multinational Companies exempt
5) Corporation Covered by Special Laws Rate specified
under the
respective
special laws
6) Offshore Banking Units (OBUs) 10%
In general – Income derived by OBUs from foreign currency transactions with Exempt
non-residents, other OBUs, local commercial banks and branches of foreign
banks authorized by BSP
On interest income derived from foreign currency loans granted to 10%
residents other than offshore banking units or local commercial banks, local
branches of foreign banks authorized by BSP to transact business with OBUs
7) Income derived under the Expanded Foreign Currency Deposit System
Interest income derived by a depository bank under the expanded foreign 7½%
currency deposit system.
On Income derived by depository banks under the expanded foreign exempt
currency deposit systems from foreign currency transactions with non-
residents, OBUs in the Philippines, local commercial banks including
branches of foreign banks that may be authorized by BSP
9/11/2019 On interest income derived from foreign
Incomecurrency loans
Tax - Bureau granted
of Internal by
Revenue 10%
depository banks under the expanded foreign currency deposit systems to
residents other than offshore banking units in the Philippines or other
depository banks under the expanded system
8.) Branch Profit Remittances – on total profits applied or earmarked for 15%
remittance without any deduction for the tax component thereof (except those
activities which are registered with the Philippines Economic Zone Authority)
9.) Interest from currency deposits, trust funds, deposit substitutes and similar 20%
arrangements
10. Royalties derived from sources within the Philippines 20%
Related Revenue Issuances
RMO No. 23-2018, RR No. 8-2018, RA No. 10963, RR No. 12-2007, RR No. 14-2002, RA No. 9337, RR No. 9-98, RR No. 1-98, RR No. 5-97, RR No. 4-96
[return to index]
Frequently Asked Questions
1) What is income?
Income means all wealth which flows into the taxpayer other than as a mere return of capital.
2) What is Taxable Income?
Taxable income means the pertinent items of gross income specified in the Tax Code as amended, less the deductions, if any, authorized for such types of income, by
the Tax Code or other special laws.
3) What is Gross Income?
Gross income means all income derived from whatever source.
4) What comprises gross income?
Gross income includes, but is not limited to the following:
Compensation for services, in whatever form paid, including but not limited to fees, salaries, wages, commissions and similar items
Gross income derived from the conduct of trade or business or the exercise of profession
Gains derived from dealings in property
Interest
Rents
Royalties
Dividends
Annuities
Prizes and winnings
Pensions
Partner's distributive share from the net income of the general professional partnerships
5) What are some of the exclusions from gross income?
Life insurance
Amount received by insured as return of premium
Gifts, bequests and devises
Compensation for injuries or sickness
Income exempt under treaty
Retirement benefits, pensions, gratuities, etc.
Miscellaneous items
Income derived by foreign government

Income derived by the government or its political subdivision
Prizes and awards in sport competition
Prizes and awards which met the conditions set in the Tax Code
13th month pay and other benefits not exceeding P90,000
GSIS, SSS, Medicare and other contributions
Gains from the sale of bonds, debentures or other certificate of indebtedness with a maturity of more than five (5) years
Gains from redemption of shares in mutual fund
6) What are the allowable deductions from gross income?
a) *Optional Standard Deduction - an amount not exceeding 40% of the gross sales/receipts for individuals and gross income for corporations; or
b) Itemized Deductions which include the following:
- Expenses
- Interest
- Taxes
- Losses
- Bad Debts
- Depreciation
- Depletion of Oil and Gas Wells and Mines
- Charitable Contributions and Other Contributions- Research and Development
- Pension Trusts
9/11/2019 * Not allowed to non-resident alien individual Income Tax - Bureau of Internal Revenue
* A General Professional Partnership (GPP) may avail of the OSD only once, either by the GPP or the partners comprising the partnership
7) Who are not required to file Income Tax returns?
a. An individual earning purely compensation income whose taxable income does not exceed P250,000.00
b. An individual whose income tax has been withheld correctly by his employer, provided that such individual has only one employer for the taxable year
c. 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.
d. An individual who is a minimum wage earner
e. Those who are qualified under “substituted filing”. However, substituted filing applies only if all of the following requirements are present:
- the employee received purely compensation income (regardless of amount) during the taxable year;
- the employee received the income from only one employer in the Philippines during the taxable year;
- the amount of tax due from the employee at the end of the year equals the amount of tax withheld by the employer;
- the employee’s spouse also complies with all 3 conditions stated above;
- the employer files the annual information return (BIR Form No. 1604-CF); and
- the employer issues BIR Form No. 2316 (Oct 2002 ENCS version) to each employee.
8.) Who are exempt from Income Tax?
a. Income from abroad of a non-resident citizen who is:
i. 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
ii. A citizen of the Philippines who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for employment on a permanent
basis
iii. 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
iv. A citizen who has been 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 likewise be treated as a non-resident citizen during the taxable year in which he arrives in the Philippines, with respect to his income
derived from sources abroad until the date of his arrival in the Philippines.
b. Overseas Filipino Worker, including overseas seaman

An individual
9/11/2019 citizen of the Philippines who is working and deriving income from
Income Tax abroad
- Bureau as anRevenue
of Internal overseas Filipino worker is taxable only on income from sources
within the Philippines; provided, that a seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of
the complement of a vessel engaged exclusively in international trade will be treated as an overseas Filipino worker.
NOTE: A Filipino employed as Philippine Embassy/Consulate service personnel of the Philippine Embassy/consulate is not treated as a non-resident citizen;
hence, his income is taxable.
c. General Professional Partnership
d. Government Service Insurance System (GSIS)
e. Social Security System (SSS)
f. Philippine Health Insurance Corporation (PHIC)
g. Local Water Districts (LWD)
9) What are the procedures in filing Income Tax returns (ITRs)?
a. For “with payment” ITRs (BIR Form Nos. 1700 / 1701 / 1701Q / 1702 / 1702Q / 1704)
File the return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) of the place where taxpayer is registered or
required to be registered. In places where there are no AABs, file the return directly with the Revenue Collection Officer or duly Authorized Treasurer of the city or
municipality in which such person has his legal residence or principal place of business in the Philippines, or if there is none, filing of the return will be at the Office
of the Commissioner.
b. For “no payment” ITRs -- refundable, break-even, exempt and no operation/transaction, including returns to be paid on 2nd installment and returns paid through
a Tax Debit Memo(TDM)
File the return with the concerned Revenue District Office (RDO) where the taxpayer is registered. However, "no payment" returns filed late shall not be accepted
by the RDO but instead, they shall be filed with an Authorized Agent Bank (AAB) or Collection Officer/Deputized Municipal Treasurer (in places where there are no
AABs), for collection of necessary penalties.
10) How is Income Tax payable of individuals (resident citizens and non-resident citizens) computed?
A. Based on Graduated Income Tax Rate
Gross Income P ___________

Less: Allowable Deductions (Itemized or Optional) ___________
Net Taxable Income P ___________
Multiply by Tax Rate (0% to 35%) ____________
Income Tax Due P ___________
9/11/2019 Less: Tax Withheld (per BIR From 2316) Income Tax - Bureau of Internal Revenue ____________
Income Tax Payable P____________
B. Based on Preferential Tax Rate of 8%
i. Taxpayers source of income is purely from self-employment
Gross Sales/Receipts P ___________

Add: Non-operating Income ____________
Gross Taxable Income P ___________
Less: Amount allowed as deduction under Sec. 24 (A)(2)(b) of NIRC, as
250,000.00
amended
Net Taxable Income P ___________
Multiply by Tax Rate 8%
Tax Withheld (per BIR From 2307) ____________
Income Tax Payable P ___________
ii. Mixed Income Earner
On Compensation
Total Compensation Income P ___________
Less: Non-taxable Income ____________
13th month pay and other benefits (max) 90,000.00
Taxable Compensation Income P ----------------

Multiply by Tax Rate (0% to 35%) ____________
Tax Due on Compensation P ___________
On Business Income
Gross Sales/Receipts P ___________
Add: Non-operating Income ____________
Taxable Business Income P ___________
Multiply by Tax Rate 8%
Tax Due on Business Income P ___________
Total Income Tax Due (Compensation + Business) P ___________

Tax Withheld (per BIR From 2316/2307) ____________
Income Tax Payable P ___________
11) How is Income Tax Paid?
A. Through withholding
a. Individual Payee: Rate

If the gross annual business or professional income did not exceed 5%
P3,000,000.00
If the gross annual business or professional income is more than 10%
P3,000,000.00
b. Non-individual Payee Rate
If the gross annual business or professional income did not exceed 10%
P720,000.00
If the gross annual business or professional income is more than 15%
P720,000.00
B. Pay the balance as you file the tax return, computed as follows:

Less: Withholding Tax ___________
Net Income Tax Due* P ___________
*Note: When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal installments, the first installment to shall be paid at the time
the return is filed and the second installment on or before October 15 following the close of the calendar year to the Authorized Agent Bank (AAB) within the
jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered
12) Is the Minimum Corporate Income Tax (MCIT) an addition to the regular or normal income tax?
No, the MCIT is not an additional tax. An MCIT of 2% of the gross income as of the end of taxable year (whether calendar or fiscal year, depending on the
accounting period employed) is imposed on a corporation taxable under Title II of the Tax Code, as amended, beginning on the 4th taxable year immediately
following the taxable year in which such corporation commenced its business operations when the MCIT is greater than the regular income tax. The MCIT is
compared with the regular income tax, which is due from a corporation. If the regular income is higher than the MCIT, then the corporation does not pay the MCIT
but the amount of the regular income tax.
13) Who are covered by MCIT?
The
9/11/2019 MCIT covers domestic and resident foreign corporations which Income
are subject to the
Tax - Bureau regularRevenue
of Internal income tax. The term “regular income tax” refers to the regular
income tax rates under the Tax Code. Thus, corporations which are subject to a special corporate tax or to preferential rates under special laws do not fall within
the coverage of the MCIT.
For corporations whose operations or activities are partly covered by the regular income tax and partly covered by the preferential rate under special law, the MCIT
shall apply the regular income tax rate on its operations not covered by the tax incentives. Newly established corporations or firms which are on their first 3 years
of operations are not covered by the MCIT.
14) When does a corporation start to be covered by the MCIT?
A corporation starts to be covered by the MCIT on the 4th year following the year of the commencement of its business operations. The period of reckoning which
is the start of its business operations is the year when the corporation was registered with the BIR. This rule will apply regardless of whether the corporation is
using the calendar year or fiscal year as its taxable year.
15) When is the MCIT reported and paid? Is it quarterly?
The MCIT is paid on an annual basis and quarterly basis. The rules are governed by Revenue Regulations No. 12-2007.
16) How is MCIT computed?
The MCIT is 2% of the gross income of the corporation at the end of the taxable year.
The computation and the payment of MCIT, shall likewise apply at the time of filing the quarterly corporate income tax as prescribed under Section 75 and Section
77 of the Tax Code, as amended. Thus, in the computation of the tax due for the taxable quarter, if the computed quarterly MCIT is higher than the quarterly
normal income tax, the tax due to be paid for such taxable quarter at the time of filing the quarterly income tax return shall be the MCIT which is two percent (2%)
of the gross income as of the end of the taxable quarter.
“Gross income” means gross sales less sales returns, discounts and cost of goods sold. Passive income, which have been subject to a final tax at source do not
form part of gross income for purposes of computing the MCIT.
Cost of goods sold includes all business expenses directly incurred to produce the merchandise to bring them to their present location and use.
For trading or merchandising concern, cost of goods sold means the invoice cost of goods sold, plus import duties, freight in transporting the goods to the place
where the goods are actually sold, including insurance while the goods are in transit.
For a manufacturing concern, cost of goods manufactured and sold means all costs of production of finished goods such as raw materials used, direct labor and
manufacturing overhead, freight cost, insurance premiums and other costs incurred to bring the raw materials to the factory or warehouse.
For sale of services, gross income means gross receipts less discounts and cost of services which cover all direct costs and expenses necessarily incurred to
provide the services required by the customers and clients including:
Salaries and employees benefits of personnel, consultants and specialists directly rendering the service;
Cost of facilities directly utilized in providing the service such as depreciation or rental of equipment used;
Cost of supplies
Interest
9/11/2019 Expense is not included as part of cost of service, except in the caseTax
Income of -banks
Bureauand otherRevenue
of Internal financial institutions.
“Gross Receipts” means amounts actually or constructively received during the taxable year. However, for taxpayers employing the accrual basis of accounting, it
means amounts earned as gross income.
17) What is the carry forward provision under the MCIT?
Any excess of the MCIT over the normal income tax may be carried forward and credited against the normal income tax for the three (3) immediately succeeding
taxable years.
18) How would the MCIT be recorded for accounting purposes?
Any amount paid as excess minimum corporate income tax should be recorded in the corporation’s books as an asset under account title “Deferred charges-MCIT”
19) How long can we amend our income tax return?
There is no prescription period for amending the return. When the taxpayer has been issued a Letter of Authority, he can no longer amend the return.
20) Can a benefactor of a senior citizen claim him/her as additional dependent in addition to his/her 3 qualified dependent children at Php25,000 each?
No, pursuant to Revenue Regulations 2-94, the benefactor of a senior citizen cannot claim the additional exemption. Further, additional exemptions of individual
taxpayers are removed under RA 10963 (Tax Reform for Acceleration and Inclusion).
[return to index]
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International Tax Matters

Index for Income Tax:

Income Tax Description

Income Tax Description

Who are Required to File Income Tax Returns?

Non-resident citizens receiving income from sources within the Philippines

Corporations including partnerships, no matter how created or organized.

Foreign corporations receiving income from sources within the Philippines

Estates and trusts engaged in trade or business

1. Certificate of Income Tax Withheld on Compensation (BIR Form 2316 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/16992316.pdf))

2. Duly approved Tax Debit Memo, if applicable

3. Proofs of Foreign Tax Credits, if applicable

1. For Electronic Filing and Payment System (eFPS) Filer

a. Fill-up applicable fields in the BIR Form No. 1700 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82310BIR%20Form%201700.pdf)

2. For Non-eFPS Filer

3. For Manual Filer

a. Fill-up the BIR Form No. 1700 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82310BIR%20Form%201700.pdf) in triplicate copies.

Annual Income Tax For Individuals, Estates, and Trusts

4. Duly approved Tax Debit Memo, if applicable

5. Proof of Foreign Tax Credits, if applicable

9. Proof of prior year’s excess tax credits, if applicable

1. For eFPS Filer

a. Fill-up applicable fields in the BIR Form No. 1701 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82255BIR%20Form%201701.pdf)

2. For Non-eFPS Filer

b. Print the duly accomplished BIR Form No. 1701 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82255BIR%20Form%201701.pdf)

3. For Manual Filer

a. Fill-up the BIR Form No. 1701 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/82255BIR%20Form%201701.pdf) in triplicate copies.

1. Accomplish BIR Form 1701 AIF (https://www.bir.gov.ph/images/bir_files/old_files/pdf/19091701AIF(ENCS)%20full.pdf) in triplicate.

2. Attach the same to BIR Form 1701.

BIR Form 1701Q (https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1701Q%20Jan%202018%20final%20rev2.pdf) -

2. Duly approved Tax Debit Memo, if applicable

3. Proof of other payment/s made, if applicable

1. For eFPS Filer

a. Fill-up applicable fields in the BIR Form No. 1701Q

2. For Non-eFPS Filer

a. Fill-up applicable fields in the BIR Form No. 1701Q

b. Print the duly accomplished BIR Form No. 1701Q

3. For Manual Filer

May 15 of the current taxable year– for the first quarter

Annual Income Tax For Corporations And Partnerships

3. Duly approved Tax Debit Memo, if applicable

4. Proof of Foreign Tax Credits, if applicable

1. For eFPS Filer

a. Fill-up applicable fields in the BIR Form No. 1702

2. For Non-eFPS Filer

b. Print the duly accomplished BIR Form No. 1702

3. For Manual Filer

a. Fill-up the BIR Form No. 1702 in triplicate copies.

Account Information Form For Corporations And Partnerships

1. Accomplish BIR Form 1702 AIF in triplicate.

2. Attach the same to BIR Form 1702.

Quarterly Income Tax For Corporations And Partnerships

2. Duly approved Tax Debit Memo, if applicable

1. For eFPS Filer

a. Fill-up applicable fields in the BIR Form No. 1702Q (https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf)

2. For Non-eFPS Filer

b. Print the duly accomplished BIR Form No. 1702Q (https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf)

3. For Manual Filer

a. Fill-up the BIR Form No. 1702Q (https://www.bir.gov.ph/images/bir_files/old_files/pdf/267751702Qjuly2008.pdf) in triplicate copies.

c. Receive your copy of the duly stamped and validated