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Ways for Filipino Freelancers to Pay Taxes in the Philippines

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

ERRATUM:

 

In the previous post, the word "employess" is supposed to be spelled as "employee".  The word is found in the first sentence of the first paragraph.

Frequent Visitor
Mary Grace D Member Since: Mar 26, 2018

hi juvy, I read everything on this site and some blogs regarding tax for freelancers. I was wondering if it's better to choose graduated than 8%? 

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

@Mary Grace D wrote:

hi juvy, I read everything on this site and some blogs regarding tax for freelancers. I was wondering if it's better to choose graduated than 8%? 


That question is valid, Mary Grace.  Some debatable questions when it comes to taxes are going to be answered this year.  I have new updates:

 

It is through the United States Agency for International Development or USAID that the Bureau of Internal Revenue (BIR) is continually enhancing its tax collection systems and processes.

 

As published in the online portal of the BIR, its ePay Channels which are bound to accept online tax payments next year will include two major banks and Globe’s GCASH arm.

 

Land Bank of the Philippines (LBP)

 

I learned through web search that taxes may be paid via the LANDBANK LinkBiz Portal. The following client accounts may be used to remit tax payments via LBP:

 

  1. ATM Savings Account
  2. LANDBANK VISA Debit Cards
  3. Current Account with ATM Access
  4. BancNet-Member Banks ATM Cards
  5. International Credit/Debit Cards
  6. Globe GCash

Development Bank of the Philippines (DBP)

 

DBP allows tax payments using VISA and MASTERCARD credit cards, Bancnet ATM/debit cards, OTC Non-Bank, and eWallet (which is yet to become operational) options.

 

NOTE:

 

The Electronic Payment Service Provider (EPSP) will charge a Convenience Fee (2% of the Tax Amount plus PhP 35.00) for MasterCard/Visa Card tax payments and Php 35.00 for BancNet Card tax payments.

 

Banks that are allowed to remit tax payments to BIR via the DBP portal specifically through debit card access are the following:

 

  • BPI Direct Banko – a product of a merger between BPI DirectSavings Bank (the Philippines' first internet bank), and BPI Globe BanKo (the country's first mobile savings bank)

 

NOTE:

 

BPI has released an important (according to Google magic) advisory via email stating that beginning January 11, 2019, BPI Express Online will no longer be accessible to process BIR tax payments.

 

Today, December 3, 2018, I was told by one BPI bank teller that over-the-counter BIR payments will only be accepted until this month.  My hypothesis is that they are probably going to debunk the BIR feature via the BEA terminal.  As a result, either 2551M or 2551Q will not be accepted anymore.  The debate is over as far as the bank is concerned.

 

This implies that if I paid for two 2551M forms this year then I will have to file a synoptic form come January, 2019.

 

I am so grateful to BPI bank tellers especially the ones who attend to my bank needs at this rural-but-class-A-area.  I think that they are highly commendable for their selfless service to the government because they finished the entire calendar year and notified us appropriately and respectfully even when we do not have outstanding balances in our accounts with them.  Theirs is an example of prudent professionalism that is worth emulating.

 

  • Asia United Bank – a universal bank
  • CTBC Bank – is among the largest privately owned banks in Taiwan
  • Citystate Savings Bank - isa publicly listed thrift bank listed in the Philippine Stock Exchange
  • Development Bank of the Philippines - is a state-owned development bank headquartered in Makati City, Philippines
  • Enterprise Bank - a savings bank established on 10 May 1976 as a community-based Rural Bank
  • Entrepreneur Bank – a rural bank
  • Equicom Savings Bank – a thrift bank
  • MASS SPECC Cooperative Development Center – a federation of 334 affiliate primary cooperatives operating in different parts of Mindanao
  • Malayan Bank – a savings bank
  • Overseas Filipino Bank – a state-owned bank in the Philippines which is formerly known as the Philippine Postal Savings Bank or PostBank
  • Philippine Bank of Communications (PBCom) - one of the largest commercial banks in the Philippines
  • Philippine Business Bank – is geared towards thrift banking as it is a Total Savings Bank
  • Philippine Veterans Bank – is a private commercial bank
  • Philtrust Bank – formerly known as the Philippine Trust Company; is one of the oldest private universal banks in the Philippines
  • Sterling Bank of Asia - is a savings bank principally owned by the JTKC Group of Companies, Surewell Equities, and Star Equities engaged in diverse industries ranging from logistics to finance, real estate, manufacturing, hotel and resort properties
  • Sun Savings Bank - customer–oriented thrift bank committed to offer “value for money” financial services to consumers and small and medium size businesses through the effective use of information technology
  • Tiaong Rural Bank - the most preferred rural bank in CALABARZON area

 

NOTE: 

 

For 2019, Authorized Agent Banks (AABs) that will transact business on behalf of BIR will exclude BPI and BDO.  Metrobank and UCPB will still be accepting 2551Qs next year although these banks do not appear as BIR-recognized ePay channels. What is certain is that MasterCard, Visa Card, Bancnet Card accounts will still be within the realm of taxation next year.

 

The trend that I am seeing is that rural banks and those banks which have yet to accept remittances from Upwork are going to be empowered next year.  This invites less works for bank tellers. Amen. 

 

Globe GCASH

 

NOTE:

The Globe GCASH mode does not recognize BIR as a biller if the phone is the landline phone as we know it.  There is a need to purchase a new Android phone but we may have the phone by upgrading our existing Internet service plan.  The lowest alternative costs Php 599.00 and the phone comes as a bonus item.  Say, for instance, given that my current plan is Plan 1299 it will only be after 6 months that I will be able to avail of this option because my monthly internet service fees will begin to stabilize at around this time.  The GCASH app may only be downloaded using this Android phone.  It seems that it cannot be downloaded using a desktop computer especially that nowadays I seem to be recognized as a robot.  Kidding aside, I am hopeful that BIR will be recognized as a biller using this route.

 

References:

 

Bureau of Internal Revenue.  2018.  Retrieved from https://www.bir.gov.ph/

 

LandBank of the Philippines.  2018.  Link.BizPortal.  Retrieved from https://www.landbank.com/Link.Biz-Portal

 

Development Bank of the Philippines.  2017.  Tax Payment.  Retrieved from https://www.dbppaytax.com/