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How to register as professional self employed tax payer? Philippines

Community Guru
Juvy Ann P Member Since: Oct 29, 2015

I have a proof of inward remittances that my bank receives via the Philippine Clearing House Corporation (PCHC) which facilitates telegraphic fund transfer within Philippine banks.  For each remittance, there are corresponding deductions, say for instance, in my case my earnings are deducted US$0.99 prior to the release of funds to my bank.  Then when it reaches my bank, additional bank charges are applied to my earnings.  For my Union Bank EON account, a bank charge of Php50.00 (since I started freelancing last 2015) grew to become Php 100.00 by 04 May 2016 up to the current date.

 

According to a bank teller I spoke with, the bank does not release the Certificate of Inward Remittances (CIR).  PCHC may be reached at https://pchc.com.ph. The insititution probably can release that document.  If I am not mistaken, the document is needed by individuals who wish to avail of the zero-rated VAT benefits.  Any freelancer who has proof that he/she imports goods to his/her clients may apply for zero-rated VAT and if his/her gross annual sales exceeds Php 1,919,500.00 or US$ 38, 278.23 (using the current conversion rate).

 

I am not sure if it is appropriate to use the phrase "payments that are received from clients" since if it is a direct process then it can be circumvention and this is a grave matter.  Upwork serves as the mediatrix between freelancers and clients.  Are you referring to Paypal or Payoneer services?

 

Before I forget, here's the document I was teling you about in my first paragraph.  Thanks.

 

proof_of_inward_remittance.jpg

Community Guru
Juvy Ann P Member Since: Oct 29, 2015

Updates as of April 1, 2017:

 

Yesterday, I went to the PCHC main office in order to verify facts myself. PCHC is located at the 10th floor of the ExpoBank Plaza situated at the corner of Sen. Gil Puyat Avenue and Chino Roces Avenue.  It can be reached using your own car, via MRT (Buendia station) or through a bus (via Ayala-Leveriza).  I found out that the Certificate of Inward Remittances is a combination of a bank certificate and bank statements.  PCHC does not entertain clients like UW users.  They transact business only with banks and institutions.  They can release the Certificate of Inward Remittances only when the bank requests them to furnish them with that document but that certificate is for the consumption of the bank only.

 

The bank issues a bank certificate for a fee of at least Php 150.00 to be debited to the account.  It, precisely, is a piece of document stating that by the time the request for bank certificate was made, the UW user has an existing deposit of a specific amount under a certain account type and number.  It also states when the account was opened and that the request is being made for the prupose of BIR requirement compliance.

 

bank_certificate.jpg

 

As regards the Professional Tax Receipt which you mentioned in this thread, I have documents stating the type of professionals who  have PTRs -- the Notary Public lawyer, the Certified Public Accountant.  Probably dermatologists and physicians who run their own clinics or hospitals may have that.  It looks like PTRs are for professionals who are self-employed and conduct their business within the Philippine territory.  I have yet to find out if professionals who earn certificates via online courses can apply as a self-employed individuals under the professional category and be granted the PTR benefits.

 

Updates as of April 4, 2017:

 

I went to the BIR office yesterday.  So far, what is clear is that for freelance contractors, being a sole proprietor is the same as being a professional taxpayer as long as it is specified in the COR that the sole proprietor conducts his/her business under code 7499 which refers to professional services.

 

Professionals who earn in the Philippine currency have additional taxes called professional tax.  Proceeds coming from Professional Tax Receipts (PTRs) that are issued by freelancers will go to the local government (either at the city or municipality levels) unit.  Professionals who do not run a DTI-based business have to pay for their occupational taxes and, consequently, issue what is known as Occupational Tax Receipts.  Freelance contractors, including professionals who earn their degrees or certificates via online courses, are exempt from any of these taxes since they earn in US dollars.

 

As for the Certificate of Inward Remittances, it looks like the document is released by the Philippine Clearing House Corporation to the bank concerned and not to the freelance contractor who requests for the document.  The bank issues a bank certificate stating the date the request for the document was made, that the client has an existing deposit in the bank, the specific amount deposited in the bank account, the bank account number, the date the account was opened, the purpose of the request (for instance, BIR requirement compliance).  The bank statement specifies that the client has inward remittances and the amount credited to the account per deposit or withdrawal.  I think I already mentioned this in my previous "report".

 

The said documents, accompanied by the Certificate of Earnings Report, must be presented to the BIR office upon registration.

Active Member
John Paul Z Member Since: Mar 19, 2017

Thanks for the info regarding the PCHC so it means that you just need to request for the Certificate of Inward Remittances directly from your bank branch (in my case Unionbank too)

 

Right now what I did so far is to transfer my RDO from taguig-pateros to RDO caloocan and as expected I was not able to get knowledgeable answers from BIR its like automatic that when they hear sole proprietor their immediate answer is you need to have a DTI 

you are even more knowledgeable than them Smiley Happy but seriously yes.

maybe after lenten season I'll set work on my schedule then I'll pay a visit to RDO caloocan. Apparently its situated in the south part of the city and Im located in the North haha

Thank you Juvy

Active Member
John Paul Z Member Since: Mar 19, 2017

Hey Juvy!

I finally got my COR few days back. It was quite a process, i wonder why BIR havent really thought of making it more "user friendly" I bet that way alot of people will be able to pay their taxes - for the love of the country LOL

 

Capture1.JPG

 

Will be working on the books and the invoices asap. Thanks for all your inputs. 

 

PS. For the "LIne of business/industry" no clue why BIR put that wholesale on a fee or contract basis of other products. I think it wont matter as long as I pay my dues religiously LOL Smiley Very Happy

Active Member
John Paul Z Member Since: Mar 19, 2017

BIR REGISTRATION FOR FREELANCE ARTISTS IN THE PHILIPPINES

(http://www.deivcalviz.com/2016/02/06/bir-for-freelance-artists-in-the-philippines/)

 

Hi guys, I made a guide on how to be a registered freelancer in the Philippines like me. Hopefully this is clear enough to help anyone interested.

 

To be honest, I’m not yet sure how much the pros and cons weight in the long term by doing this. I know most people will say that you can get away without ever registering but if this is something that you plan to do in the long term, and you’re not employed in any full-time job, then being legit will definitely help you out.

 

PROS:

  • You’ll be a law abiding citizen.
  • You have proof that you are earning money. This proof can be used for things like getting a credit card, a phone line, a car or housing loan in the future, etc.
  • You actually have official receipts enabling you to get big clients without worry.
  • You are in control of how much you earn, spend, and declare.

 

CONS:

  • You will do all the paper work on your own.
  • You need to paypercentage tax once a month, income taxes 4 times a year, and a registration fee once a year.
  • You need to give out receipts to your customers and maintain books of accounts.

 

The cons aren’t really that bad. You only need a few hours per month to organize and pay things and that’s it. Below are the steps on how to get registered assuming you already have a TIN number.

 

Important Terms

 

RDO – Regional District Office

 

RDOs only handle people’s taxes in their specified areas so for example you previously worked at Quezon but started freelancing in Makati, you need to go to the RDO in Quezon and get them to change your RDO to Makati. They will take around 5 days to transfer your papers and information to the other RDO.

 

Form 0605 – Payment Form

 

You will use this form to pay for the annual registration fee of Php500.00. Make sure to photocopy this form at least 4 times since it will be attached on other forms.

 

Form 1905 – Application for Registration Information Update/Correction/Cancellation

 

This form is used to update information/ change status, change RDO, etc

 

 

 

Form 1901 – Application for Registration

 

Only fill up the information you know. As a freelance artist you just need to indicate that you are a professional engaging in freelance illustration services as well as the 3 taxes you need to pay:

 

  1. Registration Fee
  2. Income Tax
  3. Percentage Tax

 

 

STEP 1: Confirm or change your RDO

 

  1. You need to have a TIN number first. Not sure how to do this since I got mine when I got my first job.
  2. Go to nearest BIR to check if your RDO correctly matches your home address since you are engaging in freelance at home.
  3. If it is not correct, get the form 1905 go to the old RDO and submit form 1905 to change to your new RDO and wait around 1 week of processing. (if you have a fax machine, try to ask if you can fax it instead of going to the old RDO since it can be inconvenient.)
  4. While doing this, it is recommended that you also fill up the form 1901 so you can ask and double check future requirements needed.

 

 

STEP 2: Registration Requirements

 

MAIN Requirements for 1901 (Registration for professional)

 

  1. Paid Form 0605
  2. Barangay clearance

 

Requirements of 0605

 

  • 3x xerox of form 0605
  • 500 pesos registration fee – pay it at a bank that serves your RDO

 

Requirements for barangay clearance

 

  • xerox of valid ID (postal ID is easiest to obtain if you don’t have a work ID)
  • xerox of voters receipt (you can use your postal ID to get this too)

 

*It is recommended that you DO NOT tell BIR that you are renting in an apartment if you are. This is because they will assign a new tax type to you (widtholding tax) that will involve the owner of the apartment. For example, if you pay 9,000 per month on rent, you will need to tell the apartment owner that you cannot pay the full amount anymore because you are forced to withold a certain amount from them BIR. If the apartment owner doesn’t pay taxes correctly or if they don’t want you engaging in business within their place, you might be kicked out if they find out. The way is to register a permanent address owned by a family member or friend that is near where you live.

 

 

STEP 3: COR, Seminar, and additional requirements

 

  1. Once your forms have been accepted, you must now attend a seminar to determine taxes needed to be paid by freelance artists.

 

  • 3% percent tax (Form 2251M)
  • annual 500 registration ( Form 0605)
  • income tax (Form 1701)
  • if renting an office, widtholding tax

 

  1. Pay Php 15.00 for the stamp on the COR just wait and get it signed by different people.

 

  1. Get your COR. This is your proof that you are officially registered now.

 

  1. Get a printer( to print receipts) from BIR and fill up form 1906

 

  • The minimum cost at BIR is Php 1000.00 for 10 stacks of the receipts. If you want to save money, it will be better to find a different printer service but I can’t guarantee finding a cheaper one. The receipts last for 5 years I believe.

 

  1. Buy two ledgers from national bookstore need 10 – 12 columns (around P220 each)

 

  1. Fill up the form 1905 again but this time for the ledgers. Bring the ff:

 

  • Xerox of form 0605
  • Xerox of COR
  • stamp the ledgers (ask the guard how to stamp it)

 

 

STEP 4: Now you are officially registered!

 

  1. Get the Receiptswhen it is available and get the “Ask for Receipt Signboard” at the same time.
  2. Download eBIRFormsfrom the website.

 

* Technically, each step can be done within one day so you only need at least 4 working days to register yourself as a professional freelancer.

 

STEP 5: Setup

 

  1. Display the Ask for receiptnotices and COR on your wall where you work.
  2. Buy carbon copy paper and fill up the receipt whenever you get paid. (Make sure the carbon copy paper will transfer to your copy of the receipt)
  3. Give your client the receipt for each payment received.
  4. Write down the proper information in your ledgers for each sale or expense (if you want to use itemized deductions).

 

STEP 6: BIR filing of payment for 0605 and 2551M

 

12.JPG

 

  1. Open the eBIRForms software, fill it up, and make sure the information is the same as your COR.
  2. Select the form you need. (it is recommended that you do this step for the first time inside the BIR office so you can ask someone to help you.)
  3. Once inside the form page, select ATC and click the correct category. (PT010 for form 2551M, MC180 for form 0605)
  4. Press Validate
  5. Press Save to save a local copy.
  6. Print 3 copies.
  7. Press Final Copy to submit to BIR. Click cancel if it asks if you are a member online
  8. Click Agree to terms then you should receive an email of the proof of the transaction.
  9. Print 3 copies of the emails too and attach them to the 3 printed copies of the form
  10. Go to the nearest RDO bank and pay for it and you are done for the month!

 

STEP 7: ITR filing

 

  • This step is still under construction but it is similar to step 6 only with additional computations and tips. I’ll continue to update this as I understood this process better.
  • You have to choose between using Itemized deductionor the Optional 40% deduction.
  • These deductions can reduce the income tax you need to pay. For freelance artists, it is usually better to choose the optional standard 40% deduction unless you spend more than 40% your income on business related expenses. Personally, I don’t spend that much on business related expenses since most business spending I have are only for maintaining the business such as internet, electricity, occasional computer repair/upgrades. Unfortunately we cannot deduct expenses such as food, personal insurance. There is also certain limits to some deductibles. You can read more about them here.
  • If you still plan to use the itemized deduction method, be prepared to have all the proof(receipts, etc.) of your purchases all logged in your Cash Disbursement book.
  • Quarterly ITRs are very easy to file if you use the optional 40% deductions.
  • For more information on filing the last ITR which accounts for the whole year, please check others sites for now since I am not yet familiar on the steps regarding it since it will be more complex due to the personal exemption deduction.

 

STEP 8: Books of accounts/ledgers

 

  • Basically you need to record your professional expenses(cash disbursement) and Sales(cash receipts) in these columnar books.
  • You can buy these books in any bookstore and they come in lots of columns. Personally, I’m not a specialist in this area but the only important thing to do is to make sure to note down important details such as Date, Invoice number, Merchant or Client (for Sales Book), Transaction, and Amount.
  • The purpose of these books is simply to compile all transactions.
  • If you do not plan to use the itemized deduction method for the ITR, then you don’t really need to fill up the Cash Disbursement Book.

 

 

 

DEADLINES

 

  1. Annual Registration – (0605) – Due on or before January 31

 

  1. 3% Percentage Tax Returns (2551M)– Due on the 20th of the next month of the period covered. Ex. For the payment of March, the deadline will be on April 20

 

  1. Income Tax Returns – (1701Q and 1701):

 

  • 1st Qtr due on April 15
  • 2nd Qtr due on August 15
  • 3rd Qtr due on November 15
  • Final Return due on April 15 the following year

 

 

FAQ

 

Now that I’m registered, do I still need to go back to BIR everytime?

 

  • No, you don’t need to go to BIR anymore. Just make sure to pay on time using eBIRForms and pay to your nearest RDO bank or online using GCash.

 

How will BIR know how much I earned for the month?

 

  • They won’t since it is mostly an honestybased system. You should be good so long as you keep a clean record and file the necessary documents on time always.

 

What will I do if I did not earn anything for a month?

 

  • Continue to file using eBIRForms like normal but make sure you indicate that your earning is 0. Not filing anything online will result in your account getting an open case. This is automatically generated by the system.

 

How will I know if the payment worked?

 

  • You need to check if you received an email of confirmation from eBIRForms for each filing. This email will let you know that your filing online worked. Just make sure you actually pay before the deadline what you filed.

 

  • The best way to check is just go to BIR and ask if you have any open cases. Each penalty is worth at least Php 1,000.00 so make sure you remember your deadlines.

 

How to fill receipt if the client is foreign?

 

  • Just fill whatever info you get and convert the dollar amount to peso on the day you received it.

 

For the ITR, Is the personal exemption deductible?

 

  • Yes but you can only deduct it on the final ITR on the year. If it turns out that BIR owes you money after this, then you can use that extra credits to reduce your taxes next year.

 

I’m still new to all of this and it is not yet that detailed and complete but I hope this guide will help make things easier.  For more details, there is always the official website. I will still update this soon once I’m able to pass through the ITR process next.

 

Community Guru
Juvy Ann P Member Since: Oct 29, 2015

@John Paul Z wrote:

BIR REGISTRATION FOR FREELANCE ARTISTS IN THE PHILIPPINES

(http://www.deivcalviz.com/2016/02/06/bir-for-freelance-artists-in-the-philippines/)

 

-->How about freelance scientists?

 

Hi guys, I made a guide on how to be a registered freelancer in the Philippines like me. Hopefully this is clear enough to help anyone interested.

 

--> Congratulations, John Paul!  Are you addressing gals and guys alike? Hahaha!

 

To be honest, I’m not yet sure how much the pros and cons weight in the long term by doing this. I know most people will say that you can get away without ever registering but if this is something that you plan to do in the long term, and you’re not employed in any full-time job, then being legit will definitely help you out.

 

--> I agree.

 

PROS:

  • You’ll be a law abiding citizen. (Duh!)
  • You have proof that you are earning money. This proof can be used for things like getting a credit card, a phone line, a car or housing loan in the future, etc. Woohooo!
  • You actually have official receipts enabling you to get big clients without worry.
  • You are in control of how much you earn, spend, and declare.

 

CONS:

  • You will do all the paper work on your own. True.  But I think it's an advantage because brisk walking is a good exercise.  Doing all the paper work will certainly involve a lot of walking.
  • You need to paypercentage tax once a month, income taxes 4 times a year, and a registration fee once a year. Quarterly earnings below the previous quarter may indicate zero tax.
  • You need to give out receipts to your customers and maintain books of accounts. Hopefully, they will get to like your signature haha!

 

The cons aren’t really that bad. You only need a few hours per month to organize and pay things and that’s it. Below are the steps on how to get registered assuming you already have a TIN number.

 

Important Terms

 

RDO – Regional District Office

 

RDOs only handle people’s taxes in their specified areas so for example you previously worked at Quezon but started freelancing in Makati, you need to go to the RDO in Quezon and get them to change your RDO to Makati. They will take around 5 days to transfer your papers and information to the other RDO.

 

Form 0605 – Payment Form

 

You will use this form to pay for the annual registration fee of Php500.00. Make sure to photocopy this form at least 4 times since it will be attached on other forms.

 

Form 1905 – Application for Registration Information Update/Correction/Cancellation

 

This form is used to update information/ change status, change RDO, etc

 

 

 

Form 1901 – Application for Registration

 

Only fill up the information you know. As a freelance artist you just need to indicate that you are a professional engaging in freelance illustration services as well as the 3 taxes you need to pay:

 

I'm not an artist.  I'm an actress! haha!

 

  1. Registration Fee
  2. Income Tax
  3. Percentage Tax

 

 

STEP 1: Confirm or change your RDO

 

  1. You need to have a TIN number first. Not sure how to do this since I got mine when I got my first job.
  2. Go to nearest BIR to check if your RDO correctly matches your home address since you are engaging in freelance at home.
  3. If it is not correct, get the form 1905 go to the old RDO and submit form 1905 to change to your new RDO and wait around 1 week of processing. (if you have a fax machine, try to ask if you can fax it instead of going to the old RDO since it can be inconvenient.)
  4. While doing this, it is recommended that you also fill up the form 1901 so you can ask and double check future requirements needed.

 

 

STEP 2: Registration Requirements

 

MAIN Requirements for 1901 (Registration for professional)

 

  1. Paid Form 0605
  2. Barangay clearance

Sole proprietors need not present a barangay clearance, at least in my RDO.

 

Requirements of 0605

 

  • 3x xerox of form 0605
  • 500 pesos registration fee – pay it at a bank that serves your RDO

 

Requirements for barangay clearance

 

  • xerox of valid ID (postal ID is easiest to obtain if you don’t have a work ID)
  • xerox of voters receipt (you can use your postal ID to get this too)

 

*It is recommended that you DO NOT tell BIR that you are renting in an apartment if you are. This is because they will assign a new tax type to you (widtholding tax) that will involve the owner of the apartment. For example, if you pay 9,000 per month on rent, you will need to tell the apartment owner that you cannot pay the full amount anymore because you are forced to withold a certain amount from them BIR. If the apartment owner doesn’t pay taxes correctly or if they don’t want you engaging in business within their place, you might be kicked out if they find out. The way is to register a permanent address owned by a family member or friend that is near where you live.

 

That is why it is better to declare my freelancing career as a sole proprietorship.  There is no need for these issues to be sorted out.  Also, professional tax payers are bound by law to pay for the professional tax at the city or municipal hall apart from the BIR stuff.  Sole proprietors can rent an apartment and live independently.

 

STEP 3: COR, Seminar, and additional requirements

 

  1. Once your forms have been accepted, you must now attend a seminar to determine taxes needed to be paid by freelance artists.

 

  • 3% percent tax (Form 2251M)
  • annual 500 registration ( Form 0605)
  • income tax (Form 1701)
  • if renting an office, widtholding tax

 

  1. Pay Php 15.00 for the stamp on the COR just wait and get it signed by different people.

 

  1. Get your COR. This is your proof that you are officially registered now.

 

  1. Get a printer( to print receipts) from BIR and fill up form 1906

 

  • The minimum cost at BIR is Php 1000.00 for 10 stacks of the receipts. If you want to save money, it will be better to find a different printer service but I can’t guarantee finding a cheaper one. The receipts last for 5 years I believe.

It would be better to stick to the service provider recommended by BIR since they are "legitimate".

 

  1. Buy two ledgers from national bookstore need 10 – 12 columns (around P220 each)

 Why, that's so expensive!  BIR sells those ledgers for Php 50.00 each (at least in my RDO) only.

 

  1. Fill up the form 1905 again but this time for the ledgers. Bring the ff:

 

  • Xerox of form 0605
  • Xerox of COR
  • stamp the ledgers (ask the guard how to stamp it)

I like this part. I mean, without the guard on duty.

 

STEP 4: Now you are officially registered!

 

  1. Get the Receiptswhen it is available and get the “Ask for Receipt Signboard” at the same time.
  2. Download eBIRFormsfrom the website.

 

* Technically, each step can be done within one day so you only need at least 4 working days to register yourself as a professional freelancer.

 

And filing for taxes takes a few minutes only once the software is installed in a home PC.

 

STEP 5: Setup

 

  1. Display the Ask for receiptnotices and COR on your wall where you work.  Hahaha! I actually did this before.
  2. Buy carbon copy paper and fill up the receipt whenever you get paid. (Make sure the carbon copy paper will transfer to your copy of the receipt)
  3. Give your client the receipt for each payment received.  I usually scan my ORs first before I send files to my clients.
  4. Write down the proper information in your ledgers for each sale or expense (if you want to use itemized deductions).

 

STEP 6: BIR filing of payment for 0605 and 2551M

 

12.JPG

 

  1. Open the eBIRForms software, fill it up, and make sure the information is the same as your COR.
  2. Select the form you need. (it is recommended that you do this step for the first time inside the BIR office so you can ask someone to help you.)
  3. Once inside the form page, select ATC and click the correct category. (PT010 for form 2551M, MC180 for form 0605)
  4. Press Validate
  5. Press Save to save a local copy.
  6. Print 3 copies.
  7. Press Final Copy to submit to BIR. Click cancel if it asks if you are a member online
  8. Click Agree to terms then you should receive an email of the proof of the transaction.
  9. Print 3 copies of the emails too and attach them to the 3 printed copies of the form
  10. Go to the nearest RDO bank and pay for it and you are done for the month!

 Wow!

 

STEP 7: ITR filing

 

  • This step is still under construction but it is similar to step 6 only with additional computations and tips. I’ll continue to update this as I understood this process better.
  • You have to choose between using Itemized deductionor the Optional 40% deduction.  Sometimes I feel ambivalent towards these options.
  • These deductions can reduce the income tax you need to pay. For freelance artists, it is usually better to choose the optional standard 40% deduction unless you spend more than 40% your income on business related expenses. Personally, I don’t spend that much on business related expenses since most business spending I have are only for maintaining the business such as internet, electricity, occasional computer repair/upgrades. Unfortunately we cannot deduct expenses such as food, personal insurance. There is also certain limits to some deductibles. You can read more about them here.
  • If you still plan to use the itemized deduction method, be prepared to have all the proof(receipts, etc.) of your purchases all logged in your Cash Disbursement book.
  • Quarterly ITRs are very easy to file if you use the optional 40% deductions.  Corporations will benefit more with itemized deductions.  I used to do this before when I was still at the convent.  The nuns assigned me to the kitchen for a quite a long period of time not because I was a good cook but because they were fascinated with my record-keeping practices.
  • For more information on filing the last ITR which accounts for the whole year, please check others sites for now since I am not yet familiar on the steps regarding it since it will be more complex due to the personal exemption deduction.

 

STEP 8: Books of accounts/ledgers

 

  • Basically you need to record your professional expenses(cash disbursement) and Sales(cash receipts) in these columnar books.
  • You can buy these books in any bookstore and they come in lots of columns. Personally, I’m not a specialist in this area but the only important thing to do is to make sure to note down important details such as Date, Invoice number, Merchant or Client (for Sales Book), Transaction, and Amount.
  • The purpose of these books is simply to compile all transactions.
  • If you do not plan to use the itemized deduction method for the ITR, then you don’t really need to fill up the Cash Disbursement Book.

The Cash Disbursement Book still has to be accomplished.  This was necessary when I asked a CPA and two accountants to process my Financial Statement of Business.

 

DEADLINES

 

  1. Annual Registration – (0605) – Due on or before January 31

 

  1. 3% Percentage Tax Returns (2551M)– Due on the 20th of the next month of the period covered. Ex. For the payment of March, the deadline will be on April 20

 

  1. Income Tax Returns – (1701Q and 1701):

 

  • 1st Qtr due on April 15
  • 2nd Qtr due on August 15
  • 3rd Qtr due on November 15
  • Final Return due on April 15 the following year

The penalty masking as compromise is Php 1000.00 per tax return that has been filed after the due date.

 

FAQ

 

Now that I’m registered, do I still need to go back to BIR everytime?

 

  • No, you don’t need to go to BIR anymore. Just make sure to pay on time using eBIRForms and pay to your nearest RDO bank or online using GCash.

I haven't tried GCash yet.

 

How will BIR know how much I earned for the month?

 

  • They won’t since it is mostly an honestybased system. You should be good so long as you keep a clean record and file the necessary documents on time always.

The Official Receipts will serve as BIR's basis for detemining our earnings.

 

What will I do if I did not earn anything for a month?

 

  • Continue to file using eBIRForms like normal but make sure you indicate that your earning is 0. Not filing anything online will result in your account getting an open case. This is automatically generated by the system.

 

How will I know if the payment worked?

 

  • You need to check if you received an email of confirmation from eBIRForms for each filing. This email will let you know that your filing online worked. Just make sure you actually pay before the deadline what you filed.

 

  • The best way to check is just go to BIR and ask if you have any open cases. Each penalty is worth at least Php 1,000.00 so make sure you remember your deadlines.

 

How to fill receipt if the client is foreign?

 

  • Just fill whatever info you get and convert the dollar amount to peso on the day you received it.

A client's VAT or TIN number or address is desired but not strictly required.

 

For the ITR, Is the personal exemption deductible?

 

  • Yes but you can only deduct it on the final ITR on the year. If it turns out that BIR owes you money after this, then you can use that extra credits to reduce your taxes next year.

 

I’m still new to all of this and it is not yet that detailed and complete but I hope this guide will help make things easier.  For more details, there is always the official website. I will still update this soon once I’m able to pass through the ITR process next.

 


Fantastic!  I thoroughly enjoyed reading your post, John Paul.  I am giving you 1500 kudos for this work.  When you get this published as a book, I want to be your editor.  Let's share the royalte fee. Hahaha!

Active Member
Margareth M Member Since: Jun 23, 2015

hello,  thanks for this post Smiley Happy I just paid my Monthly percentage tax last week.. landbank says that 0605 and 2551M are just the same  so the teller only took my  2551M form.. is that okay? but I did not use eBIRForms for filling I just made it manually... aslo I have 3 kinds of Books, General Ledger, Cash Receipts and Cash Disburesment I need some help since I dont know what to input here especially on the Cash Disburesment book... hope you can help me on this by providing some samples ? please po... 

 

Regards,

Margie

Community Guru
Juvy Ann P Member Since: Oct 29, 2015

@Margareth M wrote:

hello,  thanks for this post Smiley Happy I just paid my Monthly percentage tax last week.. landbank says that 0605 and 2551M are just the same  so the teller only took my  2551M form.. is that okay? but I did not use eBIRForms for filling I just made it manually... aslo I have 3 kinds of Books, General Ledger, Cash Receipts and Cash Disburesment I need some help since I dont know what to input here especially on the Cash Disburesment book... hope you can help me on this by providing some samples ? please po... 

 

Regards,

Margie


Three copies of Form 2551M and a copy of the BIR software-generated Tax Confirmation Receipt usually sent via email suffices for me every time I pay for my monthly PTR.

 

As I promised to you via a private message, I am allowing you to take a look at one of my Cash Disbursement Ledger pages.  I chose the annual summary for last year since it has majority of the categories that are relevant to our business.

 

cash_disbursement_annual_summary_2016.jpg

Active Member
Margareth M Member Since: Jun 23, 2015

Hello Ms Juvy,

Thanks for tje big help. Just a clarifiaction on the column of Amount in Peso and Amount of Operating Expenses is these two have different amount? also how is the process for EBirForms do I need my email address register @ BIR for them to activate ? or via online I can register? sorry im not aware on this EBirform ... 

Community Guru
Juvy Ann P Member Since: Oct 29, 2015

1. Type "bir" on your browser.  Then click on the appropriate link.

 

step_01_software_setup.jpg

 

 

2.  You will be redirected to BIR's home page.  Download the latest version of the eBIR forms package.

 

step_02_software_setup.jpg

 

3. When the zip file has been downloaded, left click (if you're using a mouse) on "Show in Folder".  Locate the item at the "Downloads" page.  Then right click on "Scan for viruses".  When the scanning procedure is done, open the file.  You may want to read the Job Aid file first just to acquaint you with what the software can offer.  Afterwards, right click on the application.  Extract all files by clicking on the appropriate command.

 

step_03_software_setup.jpg

 

4.  After extracting all files, right click on the application and choose "Run as administrator".  Open the file.

 

step_04_software_setup.jpg

 

5.  The interface looks like this:

 

step_04_software_setup.jpg

 

6.  You may now start encoding your tax details.  The software is not for sale.  After validating, editing and printing your tax form, you may submit the form online by clicking on the "Submit" button and you will receive a confirmation receipt via email.

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