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Ways for Filipino Freelancers to Pay Taxes in the Philippines

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

What do you usually do with earnings that fall within a transition period say for instance from the last days of January to the first days of February 2017?

 

I had this dilemma last week as I tried to budget the Team App hours allocated for one of my contracts.  To solve my probem, I downloaded the CSV file of my Transaction Report.  Then I calculated the gross earnings in US$ and translated the amount in Philippine peso using the FOREX rate given in the invoice that Upwork releases after payment has been processed.  Next, I divided the total amount by the amount in US$ and established this as my variable in order to get the value of my net earnings (gross earnings less Upwork service fees and payment for local funds transfer).

 

After getting the amount for each division, it was then easy to encode tax values using the BIR software.

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

Updates:

 

I never thought February could be a long month to consider when filing tax returns.  Whew!  I just finished solving my matrix puzzle again.

 

I had a few discoveries which I think other UW users might be interested in.

 

I learned that a freelancer (I am not sure if it is safe to use the word user since I am not a client) can have a different location while using the same invoice address.  The COR states that registration can be done or renewed on or before the 31st day of January every year.  As long as the Authority to Print Receipts/Invoices and Books of Accounts are accomplished within 30 days from registration date, a move-in procedure that will take place within the year does not have to be a tax matter.

 

Another thing that I discovered is that transactions may be recorded in a lengthy manner when there is a paid trial (I am referring to a fixed-price contract) and a separate bonus payment transaction.  I think that this means that longer records mean higher taxable income.  I am grateful to my clients for making it possible for me to have longer records [lol].  The engineering and finance teams of UW deserve recognition also for their perseverance in maintaining my records and for on time processing of payments (although I find it puzzling that an ATM refused to let me withdraw my most recent earnings hahaha) via local fund transfer.

 

Erroneous Official Receipts may be corrected by writing "NULL" on each page.  It is considered used and therefore cannot be accounted for when accomplishing the ATP for next year.  Of course, clients need to be notified as regards these changes.  The important thing is to double-check entries so as to avoid complications later on.

 

I am done with my taxes for the month of February.  My last Team App entry was last February 28, 2017 but considering the security period gave me a glimpse as to the logic behind the deadline for the submission of monthly percentage tax returns.  Indeed, Philippine tax laws provide enough provision even for the processing of payments after the security period that an online platform like Upwork has.

 

So, for every UW user who wish to make payments and avoid tax penalties of at least Php 1,000.00 per tax return, the deadline is on the 20th day of each month.

 

 

 

 

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

@Juvy Ann P

 

Hi, I've read the entire convo and I've learned a thing or two however i still have a lot of questions in my head. I would really appreciate if you would be able to send me private message about the processes you took in dealing with BIR.

 

I think in your case since your a licensed teacher, it wasnt really that hard was it?

 

looking forward for your response. thank you.

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

I think I already responded to your queries, John Paul.  The entire tax experience has nothing to do with being a licensed teacher as I do not craft lesson plans and sell those lesson plans to teachers around the world so I may pay for my taxes.  Nothing beats experience.

Frequent Visitor
Aimee D Member Since: Apr 2, 2019

Im registered as self-employed self proprietorship under bir. What do i write in my non-vat official receipt for clients? Is it the total salary received in peso excluding the upwork fee and bank withdrawal fee? or the total amount received from clients including upwork fee and withdrawal fee then convert it to peso?

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

Aimee D wrote:

Im registered as self-employed self proprietorship under bir. What do i write in my non-vat official receipt for clients? Is it the total salary received in peso excluding the upwork fee and bank withdrawal fee? or the total amount received from clients including upwork fee and withdrawal fee then convert it to peso?


I normally write my gross receipt (total amount received from clients in US dollars) multiplied by the time segment tracked via the TeamApp (if it is an hourly contract) divided by my hourly rate then multiplied by peso-dollar rate stated in the processed payment notification I receive via email.  Say, for instance, the amount is Php 102.69.  I would write it as one hundred two pesos and 69/100 only.

Community Guru
Maria Marilyn M Member Since: Oct 27, 2010

Hello!

 

Would you mind helping me please? 

 

How did you manage to have the Upwork Certificate of Earnings notarized? 

 

Several lawyers didn't want to. They were asking for the actual original copy and the person who signed's ID (Elizabeth Tse). 

 

Thanks!

Ace Contributor
Francisco F Member Since: Nov 13, 2010

For what purpose?

Ace Contributor
Francisco F Member Since: Nov 13, 2010

The Upwork Certificate of Earnings is a foreign document. Not only Elizabeth Tse's ID document is required, she has to physically appear during notarization, which is an elusive shot.

 

For the said certifcate to have legal effect in the Philippines, it has to be authenticated or "consularized" by the authorized consular officer at the Philippine consulate that has jurisdiction of the location where it was signed. Visit their website for more details.

Community Guru
Maria Marilyn M Member Since: Oct 27, 2010

@Francisco F wrote:

The Upwork Certificate of Earnings is a foreign document. Not only Elizabeth Tse's ID document is required, she has to physically appear during notarization, which is an elusive shot.

 

For the said certifcate to have legal effect in the Philippines, it has to be authenticated or "consularized" by the authorized consular officer at the Philippine consulate that has jurisdiction of the location where it was signed. Visit their website for more details.


 So it sounds like the US Embassy?

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