BIR Tax Filing for Self-employed Individual

by Esther Elizabeth Suson

This isn’t a detailed guide – there are a lot of those out there on Rappler and onlinejobs.ph. This is more of an update to those guides, and some additional tips. All of my experiences are with BIR RDO 43B, who do an epically awesome and efficient job by the way, so it might differ by RDO.

1. When applying for Registration

Requirements:

  • At least 2 copies of filled-out Form 1901
  • 1 photocopy of your birth certificate
  • 1 copy of your first job order/contract

Tips:

  • Ask about the Books of Accounts and Authority to Print Receipts RIGHT AWAY. If you don’t, they might assume you have them and you might run into penalties without them. You can order BOTH through the BIR.
  • For Books of Accounts, they cost around Php 40 each from the BIR. You need:
    • 1 Cash Disbursement Book (columnar book)
    • 1 Cash Receipt Book (columnar book)
    • 1 Journal
    • 1 Ledger
  • For Authority to Print Receipts, the size, number of copies, and price depend on your company. For a tiny freelancer like me, all I need is a 1/4 size with 2 copies. You use 3 copies if you have an accountant. Through BIR, it costs me around Php 850.
  • Pay your Certificate of Registration (COR) fee. It is Php 500, as of July 2015 anyway. Requirements:
    • 3 copies of Form 0605
  • Photocopy your receiving copy and anything else they return, and submit it to get your COR.

2. Paying Monthly Percentage Tax

This is for non-VAT individuals, usually in the services sector. Requirements:

  • 3 copies of Form 2551M (no more need for Form 0605)
  • You DON’T need BIR to validate the three copies before you pay at the bank. Simply hunt down a list of the Agent Accredited Banks in your area.

3. General Deadlines

  • Apply for registration WITHIN 30 DAYS of your first transaction (payment received)
  • Apply for your Books of Accounts and Authority to Print Receipts WITHIN 30 DAYS of getting your COR

4. Penalties

  • For any late anything, you will pay Php 1000, plus daily surcharges. Moral of the story: DO NOT FILE ANYTHING LATE OR ELSE REALLY OUCH

5. Additional Tips

  • Don’t go early Mondays if you want to nip in and out as fast as you can: the flag ceremony will neutralize it
  • Don’t go on earthquake drill days, you will have to stand under the footbridge for 45 minutes
  • If you do get held up in the BIR and you’re alone, make a friend. It makes everything so much more fun

6. Grace Periods

  • Monthly percentage tax: you have 20 days after the end of the month
  • Quarterly tax: you have a month and 15 days after the end of the quarter
  • Annual tax: you have 3 months after the end of the year

Lastly, my own personal input: I did a lot of crazy math and I still am not sure how it will work, but basically I figured that if you keep back 20% of your monthly income for taxes, it will cover your monthly, quarterly, and annual taxes, as well as the annual Php 500 renewal of your COR. That might help so you don’t fall short anywhere. Have fun!

Advertisements

2 thoughts on “BIR Tax Filing for Self-employed Individual

What are you thinking?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s