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How to register as professional self employed tax payer? Philippines

Frequent Visitor
Mary Rose B Member Since: Sep 18, 2018

Hi Juvy, what are the requirements you prepared aside from the Certificate of Earnings? 

Active Member
Stella F Member Since: Sep 4, 2015

Hello Juvy and John Paul.

 

Please allow me to join this discussion. I am planning to register as a self-employed tax payer as well and this has been a fantastic read for me.

 

There is one thing that still boggles my mind though and I hope you can enlighten me.

 

If I were to register this month of November, how would that work exactly? From everything I've read so far, as a freelance contractor, I am to pay for my A) P500 Registration Fee; B) Monthly Percentage Tax; C) Quarterly Income Tax; and D) Annual Income Tax. Supposing I become registered this November, do I have to pay for my Jan to October Monthly Percentage Tax PLUS the Income Tax for the three quarters of this year? 

 

Is it even wise to do a Nov. registration in the first place? I mean, come January, I'd have to pay another P500 Registration Fee again, correct? 

 

I look forward to heairng your inputs. 

 

Please and thank you.

 

Regards,

Stella

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

Say you registered this November, then your taxable month will only be November and December of 2017. No need to bother for the previous months.

 

As for the registration fee, since we renew it annually which happens to be January of the calenday year, yes you need to shed out another 500 bucks come by January 2018 and by the way its deadline is every 31st of January :-)

 

Hope this helps.

Active Member
Stella F Member Since: Sep 4, 2015

Hello John Paul,

 

Thanks for your response. It's a bit clearer now.

 

Another noob question please, if you don't mind. Smiley Happy  How does one go about getting an annual ITR exactly? Supposing I register on January instead, then the one due on April 15 is just my Quarterly Tax, correct? (Plus my monthly percentage tax for the month). So I can't have an annual ITR (which is a requirement in visas, banks, etc.) until...April 2019? 

 

Please and thank you very much.

 

Regards,

Stella

Active Member
Margareth M Member Since: Jun 23, 2015

Hello Sir, 

 

Do you have a guide how is the process fill up for Annul Income tax? also Tax reform is now approve.. 

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

@Stella F wrote:

Hello Juvy and John Paul.

 

Please allow me to join this discussion. I am planning to register as a self-employed tax payer as well and this has been a fantastic read for me.

 

There is one thing that still boggles my mind though and I hope you can enlighten me.

 

If I were to register this month of November, how would that work exactly? From everything I've read so far, as a freelance contractor, I am to pay for my A) P500 Registration Fee; B) Monthly Percentage Tax; C) Quarterly Income Tax; and D) Annual Income Tax.

 

That is correct, Stella.

 

Supposing I become registered this November, do I have to pay for my Jan to October Monthly Percentage Tax PLUS the Income Tax for the three quarters of this year? 

 

No.

 

Is it even wise to do a Nov. registration in the first place? I mean, come January, I'd have to pay another P500 Registration Fee again, correct? 

 

I think it is good to register as early as possible.  By the way, this is in reference to your latest post -- April 15 covers all of your earnings for the year 2017.  I declared my earnings for the year 2015 even when I registered for the annual ITR filing last March, 2016.  It was when I actually learned about the other tax returns that I need to file.

 

I look forward to heairng your inputs. 

 

Please and thank you.

 

Regards,

Stella


 

Active Member
Stella F Member Since: Sep 4, 2015

Hello Juvy,

 

Thanks for responding. In reference to declaring your 2015 income during your Mar 2016 registration, were you subjected to any penalty/fines? I am thinking of doing this too so I can have an ITR already....but I'm concerned about the potentially huge fees from the late declaration or something. 

 

Please and thank you.

 

Regards,

Stella

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

I was penalized when I was already registered as a self-employed individual and that was when I failed to file my returns on time.

Active Member
Margareth M Member Since: Jun 23, 2015

Hello Ms Juvy.. do you have a Post regarding on how to file ITR  Annual Income Tax really need help as this is my first time to file :/ dont know how to start.. perhaps you can share your expericne and process with us?

 

Regards,

Margie

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

@Margareth M wrote:

Hello Ms Juvy.. do you have a Post regarding on how to file ITR  Annual Income Tax really need help as this is my first time to file :/ dont know how to start.. perhaps you can share your expericne and process with us?

 

Regards,

Margie


Hi Margareth,

 

As early as the third week of January, tax calculations may be done using the eBIRforms offline software.  This is because of the two-week security period that enables us to have processed payments with FOREX rates.

 

These are the important dates to remember:

 

January 31, 2018: 

Deadline for the filing  of BIR Forms 1905 & 1906 (New set of Invoices -- Php 1,000.00 for 10 booklets)

Deadline for the renewal of annual registration (Php 500.00)

 

April 15, 2018:

Deadline for the filing of the Annual Income Tax Return

Deadline for the filing of the First Quarterly Tax Return

 

In renewing our registration as business owners we need to bring old (2017) duplicates of all invoices that we issued to our clients, and our old (2017) cash receipt ledger and cash disbursement ledger.

 

For the filing of our 2017 ITR, we need to bring a government-issued license (such as the one issued by PRC) or a community tax certificate (otherwise known as "cedula") for page 1.

 

A married taxpayer with qualified dependents (including individuals below 21 years old and who are unemployed) have a Php 50,000.00 worth of tax exemption (it means this amount is non-taxable) and Php 25,000.00 per child (I am not sure if the maximum number of tax exemption is up to 100,000.00 equivalent to 4 children).  If a freelance contractor is married to an employee, then he or she may apply for a waiver of right to claim for an additional exemption and the form must be signed by the spouse's employer as a form of acknowledgment so that changes may be integrated in computing for the annual tax of the spouse.

 

Upwork service fees and direct-to-local bank transaction fees as well as bank fees are not to be counted as taxable.  Only the net income that is reflected in our bank statement has to be declared.  In the ITR form, this is described as Total Sales/Revenues/Receipts/Fees.

 

Current assets refer to the total sales for 2017. If you have long-term assets and liabilities, it would be wise to consult an accountant.  But essentially, for our business, we need to include the total amount of equipment we purchased for 2017 and the total sales from January until December.

 

Passive income that are considered as tax-exempt are the following:

a) proceeds of a life insurance policy

b) return of premium 

c) retirement benefits, pensions, and gratuities (for SSS members, this information is available at their website--just make sure your passwords are still viable as the system imposes an expiration date for passwords)

d) Pag-IBIG Fund dividends (the information is available in the membership verification form)

e) personal/real properties that were given as gifts

 

NOTE: If the gift was donated, the donor must not ask for an official receipt.

 

If one is an employee while holding a freelance contractor status, any income below the minimum wage is considered as tax exempt.  Yesterday, the TRAIN (referring to the tax reform bill) has been signed already and this will be effective come 2018.  Excise taxes, however, will be expected to be higher.  The price of liquefied petroleum gases and gasoline, for instance, will be higher next year than this year.

 

Paying for taxes is like nothing is happening but then once we have an ITR, we become validated as members of the employment sector of our society, hence, capable of receiving all the benefits that are available for us to enjoy with our families.