Yes it is tax season again and it is the busiest time for accountants who do ITR(Income Tax Return) preparations as a living. I know too that many people hate filling ITR specially when they end up paying additional tax.
But aside all things there is good in filling your Income Tax Return. First of all you filing your Income Tax Return and paying the right tax are contributing to the progress of the country. As a citizen you should be helping in the development and progress of your nation. Your tax money helps build roads and bridges, provide basic medical care to, compensates our police and armed forces to protect and defend our country, and so much more.
Yes unfortunately some of that tax money is stolen, mismanaged, and misused but we should always think of the good side why we are paying taxes. It is up to us to make sure every peso we pay in our tax serves the purpose.
Now here are some benefits when you file your income tax return.
Proof of Income
Your income tax return once filed and stamp becomes a proof that you are earning income. Such document shows how much you have earned for the past year and this will be the proof when you are applying for loans or any other applications requiring you to show proof of income.
Proof of Identity
Before you are able to file your Income Tax Return you are required to get a TIN(Taxpayer Identification Number) which acts as your proof of identity. Such TIN will be use on all payments you will transact with the government specially when you are paying taxes. It may not be equated to the level of the Social Security Number in the US(in the US the primary identification use is the Social Security Number) but it does serve the same purpose.
Proof of credit worthiness
In a way filing your Income Tax Return is an indicator of your credit worthiness. As mentioned it serves as a proof of income thus creditors gets a picture of your finances. You may not be granted a huge loan but it will help you in one way or another in getting approved.
Tax Refund or tax credit(if you overpaid)
Most people specially in the Philippines don’t have refunds because if you are only employed with one employer your tax payments are actually calculated and adjusted on your last pay for the year thus making sure you don’t overpay or underpay. Also if you are employed with only one employer with a certain number of employees, your employer files your ITR in your behalf which is called Substituted Filling.
Now if the case is you are self-employed, have several employment(one permanent and several part-time), have businesses you are likely to pay several and periodical taxes and at the end of the year upon computing you might have overpaid thus you end up having a refund(which I believe is rare in the Philippines or you end up getting a tax credit instead).
File accurately and avoid being questioned by the tax authority
You know how notorious our tax agencies with corruption(I am not telling that people at our tax agencies are corrupt, only a few who have no shame in disgracing the agencies that eventually makes the people see the whole agency as corrupt). You will hear stories of a businessman, celebrities, and other personalities being sued or run after by the tax agency for not paying so and so tax periods only to know after a while that the person run after made “padulas” or grease money to stop the agency from bugging them.
This is one of the reasons why many foreigners see it hard to do business in the Philippines because of the very same agency(again it is not actually the agency but a few people in the agency but it is viewed that the whole agency is corrupt) that is supposed to implement the law is the same accepting bribes or grease money.
Filing an accurate Income tax return won’t spare you(specially when you have huge revenues which easily attracts corrupt people inside the agency) but in a way prepares you from rebutting against the antics of such people in the agency. A simple misfiling or a year not filed will surely cost you a lot of penalties, interest, surcharges; and interest on unpaid taxes, surcharges, and interest(yes even the interest on what you are supposed to pay plus all other penalties and charges is again charge with interest if you don’t pay on time).
Preparing an Income Tax Return forces you to neatly arrange your documents and other proofs(specially when you have your own business or self-employed) thus when you are questioned about your taxes you have all the proofs to show them(and yes unfortunately at times even with all proper documentation the bad people inside will keep on bugging you just for you to give “under the table” to end such stupidity, I hope with the good outlook of the Philippines our statesmen will truly clean the government and be a government that the people respects).
If you have no idea how to prepare your tax return you ask people around you for tax help. There are also free tax help sites you can check out(like ), or go online to seek tax preparation software. If you have a CPA friend who prepares income tax returns ask them for their help of course at a discount.
Please be reminded that the last filing day for Income Tax Return for 2012 is on April 15, 2013, on a Monday.
Hello Louis, I too have the same vision. Being a good citizen it’s our duty to file our Income Tax Return. Ultimately this money is used for our country’s welfare only. Although sometimes our money may not be used in proper way because of corruption or some other reason but still we should see the good part of this.
Thanks for sharing the same vision.
Are there any benefits in paying taxes?
I mean priveleges, do I get better health care?Discounts? anything? or is my money simply going to social welfare leeches?
Hi there qqqqqq. Well to answer your question it depends if you live a good or bad nation. You see taxes are necessary to support the government that represents the people of a country. In turn such money from its people is use to further better the nation. Thus your taxes should go to necessary infrastructure like roads, hospitals, and other functionality in order to keep a country. One good example is Australia who has a very good healthcare system that the government can even afford to give mothers who just gave birth a 1 year maternity paid leave plus all necessary healthcare both the born and the mother needs.
hi, some of my colleagues have Tax refund… but according to our hr dept..they will not return it to us instead they will roll it over for next year.. is it legal?
hi inah! What country are you in? If you are in the Philippines and only have one employer you should not have any tax refund or additional tax to pay because it is a practice to calculate the exact tax and deduct it to the last payroll for that taxable year. If you are in the US the employee files his or her tax thereby he or she decides whether to get the refund or apply it to the next year in case in turn he or she will be paying.Rolling over is allowed thereby the taxpayers opted to use the overpayment as tax credit for the next year.
The HR should have first ask the employees concern but I guess it is out of convenience that the HR decided to just turn those overpayment as credit(and to my knowledge the Philippine government rarely issue an actual cash refund but instead gives a tax credit certificate which you could only use for future tax payable). Let me research further on your inquiry if is it legal or illegal to automatically convert a tax refund to a tax credit without the employee or taxpayer’s knowledge(this is basing that the employment is in the Philippines)
Again thank you ina for your contribution about the topic
good pm! i have income from my salary and at the same time i have income from rentals.,do i have to file 2 different itr form?
Thanks Kristine for asking!
Wow that is good to hear that actually have another source of income. Now about your question since you have two sources of income you don’t qualify now for the substituted filling allowed by the BIR(this is assuming your filing for a Philippine Income tax) but you will still only file one income tax return only that you will file on your own. You can approach your company’s hr/accounting to exclude you from their year end report for the substituted filling and you on the other hand have to file your own income tax before the deadline which is normally April 15 or as adjusted depending on what day it falls.
Now would it be beneficial if you file with your own income tax with the rental income?
Well it depends if adding up your income from salary and rental less your expenses from rental property will lower your taxable income. A lower taxable income will be taxed on the lower income tax rate. So make sure you keep all your receipts for your rental property’s expenses to substantiate your expenses or else you will be computing your income tax with only 40% of your gross income as allowed deduction because of your rental business in accordance to the OSD(Optional Standard Deduction).
I hope this helped and answered your question.
Hi sir meron po akong boardinghouse 12beds kakatapos LNG po ngayong june. Ang first step KO po ginawa e nag transfer pO from rdo 42 to rdo38 kc po yung property e nasa rdo 38 yung sakop nya..yung tin ko po kasi ang last work KO pa po is 2008 wala nmn po ba problem kung ganito katagal do nagamit ang tin? At kung nai transfer n po…at, ano po bang next na form ang pwede KO gamitin sa boarding house na biznez .1500 per bed ,d nmn po lahat e me umuupa, residential area LNG din po..need KO pa po bang balikan p ung rdo 38 para po mag file ng itr? Or late na po ako ? Or di na po ba need mag itr? Salamat po sir..
Hi Guadalyn,
First is anong type of TIN na nung itrinansfer mo from 42 to 38? Since business owner ka na at hindi na employee dapat tinanong sayo kung magreregister ka ng business under that TIN. Dapat may change of TIN type na din nung nagfile ka ng change of RDO. Since sabi kakatapops lng this June no need to file ITR, sa April 15, 2016 pa un, But kung nakaregister ka na s a sole proprietorship dapat may mga monthly at quarterly filigs ka na gagawin with the BIR under RDO 38. If hindi ka pa naisyuhan ng COR better go back to the RDO and clarify to them na ikaw ay business owner na. Siguradong marami kang paperworks na gagawin.
Hope this helps.
Hello. Patulong po. My past employer did not file an ITR because they wanted to close the business (or stop paying tax) in the Philippines. They did stop in December but I worked for them till April to take care of a few things. Now my new employer requires my ITR. I was told by the HR to just submit a notarized letter that the company closed. Please help po how can I get a notarized letter stating that I was not issued an ITR because the company closed. Is this something that my old company needs to provide me or can I just make one? Thank you for answering!
Hi there caityjones,
ung past employer mo ba nagfile until December and sila lng ba ang employer mo? You should have a substituted ITR(isa itong Legal paper an mukhang ITR). Kung wala then just follow what your new HR is saying. Write a letter and go toa notary public and have it notarized and submit it to your ITR. Sa sulat state that your previous employer has noty issued you and ITR and you don’t know if the taxes they withheld from your paycheck was properly remitted. By notarizing a document it becomes a legal document thus making it admissable sa courts sakaling may dispute.
Hope this helps caityjones
Hi Louis,
I was an OFW for the last 13 years and came home for good just last month, I never filed any ITR since becoming an OFW but since last year been receiving rental income from 4 residential apartments and 4 semi commercial stalls. I only started paying monthly percentage tax (3%) in Dec- 2012 and I was not able to file annual tax return last april 2013. But since this year from January to date been paying monthly 3% percentage tax but also not able to file the last two quarterly returns as I just returned back last month. My questions; having said the above what are my possible liabilities? Do I need to pay taxes on residential apartments? or just the commercial stalls only? By the way I took business permit, BIR registered for the last two years now since last year. All other apartments around our vicinity I know are not paying taxes and are not having business permit even though they got more units than I do. Was it really necessary for me to get business permit and register with BIR? If i continue paying 3% monthly percentage tax i think I will end up getting tax credits as the interest that I pay on my mortgage alone is huge let alone my other personal expenses and my property’s maintenance (its a three storey building). Sorry this is so long.
thanks for the reply just in case.
Sir Edgar all I can say is WOW :), I envy you on your investments.
Let me refresh my self about taxes there in the Philippines(I am an OFW too and my contract will end this September and currently seeking 2-3 more years working abroad and then try doing business in the Philippines).
Your questions
1. Possible Liabilities -> Your tax liabilities should be reflected in your BIR registration which as mentioned already is Percentage tax and since you have started a business you should be filling an ITR for income from within Philippines to determine if you still have tax payable from your business in the Philippines. With that your non-payment might result to a penalty plus interest.(Will still look about this since I have not kept myself updated lately with Philippine taxation. For our other readers you can contribute by posting it in our comment box)
2. Taxes on your residential apartments -> again is that business part of your registration, if it is you must.
3. Was it necessary to register my business -> The hard thing about the Philippines is that everybody wants to be wiser than the other thus there are lots of business unregistered thus escaping the tax man. It all depends if they get caught 🙂 and if they are not then they are lucky. But it is all a matter of your personal belief. If paying the right taxes is something you believed is good then do so if others don’t and they are enjoying it then the tax man is not doing its job. And with all the story about Napoles surely more and more Pinoys are getting discourage paying the right taxes only to be spend by the likes of Napoles. But having registered your business makes yours legit(legal) and with such documentation it would help you in some aspects like if you want to expand and borrow money form baknk or invetsors you have proofs of the legality of your business.
Let me reserach further so that I can answer some more details about your question. I hope these helps and also I hope you grow your business more.
Sir Louis,
internet base po ang work ko at wala dito sa pinas ang employer, .
required p din po ba kmi magbayad ng tax?
kung sakaling oo, ilang percent nmn po kaya ang kaltas nyan?
Good day PhiloyS,
Since your case is like you are a contractor or you provide services overseas wala makakaltas na tax. Now comes April 15 tax deadline 🙂 kung idedeclare mo ung kinita mo from your online work saka dun ka maasess for tax payable. Now the rate will depend on how much did you earned filed. So the question is will you declare what you earned.
The good thing when you file it would be that it would corroborate where your money is coming from. But again it all depends if you file it.
Good day!
I just want to ask your opinion regarding my concern in getting 2316 from my previous employer. I’m really having a hard time to get it and been requesting for that BIR form for more than two months. I badly need my 2316 as a requirement to my new work. My question is, is there any option that I can give my present employer just in case I can’t really get my 2316 from my previous employer? How can I check if my previous employer had really filed my taxes?
Hope you can help me with this.
Thank you!
Thanks Ytel for asking. As far as 2316 is concern your employer should give you a copy on or before Jan 31 for the previous year(for example 2012 should be given to you on or before Jan 31, 2013). If in case of termination or resignation such should be give on the day of your last wage payment is made(go to this BIR link for reference http://www.bir.gov.ph/lumangweb/form_cer.html.) In my opinion the employer has no right to withhold or not provide such document since it is very clear from the link that such form should be release to an employee on or before Jan 31 of the next year or if terminated or resigned on the day of last payment. Now to make clear with your question did you get your last pay already from your previous employer if not yet then they can reason that out na di pa aman nabibigay ung last pay mo… so try either talk to your new employer explaining that di mo pa nakukuha ung last pay mo from your previous employer kaya di pa narerelease ung 2316 or talk to your previous employer’s HR if you can get the form due to your cirscumstances.
If you did get your last pay already and your previous employer is stubborn you can complaint it to the nearest BIR Regional District office(so far this is the answer I also see from other sources)
Good luck Ytel and I hope your previous employer give you your 2316 soon.
Aside from having two employers in one calendar year, what other reasons/factors might cause tax deficit at during tax annualization? I experienced this when I got promoted in the middle of the year. The explanation given to me by HR is, if you get promoted and there’s an increase in your basic salary in the middle of the year, you’ll have tax deficit. Thanks!
Good morning Maki!
That is strange hmmm!Yes it is possible to have a tax deficit specially when you have two employers but where they not able to adjust your tax deductions at the end of the year? Or I think I have to clarify one thing: are you employed to two employers at this particular tax year or are you employed with one employer and then transferred to another employer? You see for employees who are employed to one employer are not already required to file an income tax because of the substituted filling which is the report your employer submits to the BIR for the total taxes deducted for the tax year. The employer usually calculates the tax deductions exactly or id there are difference they usually adjust it to your last paycheck for the year so that the total tax deducted will be equal to the total tax that you should pay the government.
If the case is you are employed to both employers for the tax year you are no longer qualified to be under the substituted filling thus you should be filling your own tax return. To avoid deficit or over payment you can total your tax payments before the tax year ends so that whatever adjustment you need to do you can ask your HRs/Payroll dept. to effect such adjustment so that you end up having a total tax paid equal to what you are suppose to pay.
Hope this helps Maki!
Hi there Louis. I’m a dual citizen living here in the Philippines. I was still in the USA when I started my online business which I did not have to register in the US and is not currently registered here in the Philippines either. A few institutions are asking me for my ITR for loans and credit etc. I’d like to pay taxes, get my ITR and use some of the benefits of actually paying taxes. What would be the best way to do this and how does this work here in the Philippines? Does paying taxes via vat deduct against what I’ll have to pay toward taxes? Thanks for any info Louis!
Hi there Alex,
First of all let me clarify your question about the VAT. ITR is for your income tax. The VAT that you pay when you purchase is a different tax. Such is what we usually call excise or use tax which is not part of the income or taxes deducted when computing your Income tax payable in the ITR.
With that the problem I see is that your business is not registered either in the US or in the Philippines so the basis of taxation will be in question. Let’s assume that since you’re residing in the Philippines you will register it here in the Philippines. The possible problems you will encounter is that they will question since when was the business. I am not quite sure how the BIR will tackle your concern what if you declare that it was long ago so they might say you should be paying taxes for the years in the past and since you never filed any ITR you are now liable for default charges and interest on unpaid taxes.
One thing more since you are applying for a loan or credit most would require you financial statements that will substabtiate or prove your ITR figures. You might be having the same problems just like Pacman 🙂
What I would suggest is for you to look for an accountant or a tax practitioner and sit down with him what is the best option you have. I guess you will be ask to register the business and act as if you just started and with that you will have a hard time proving to the bank or credit card company your credit worthiness.
Hi,
I used to be and OFW and I have just returned to the Philippines a few months ago. I have been hired locally. I asked our HR about my taxation and she told me that the deducted tax amount will be returned to me. As per my understanding, I need to file my ITR on my own. Is that right? But I don’t have my previous 2316 or other documents when I was still employed in the Philippines (2007-2011).
Hi Maye,
May I ask first if you got hired in the Philippines this 2013 and that happened around when? Also I presume you are only hired by 1 employer this year. With that the same thing happens meaning your employer will include you under the substituted filing and since your total earnings (I am assuming your income from the Philippine employer who employed you when you came back this year is not that big enough so that you will have to pay tax) is not sizable enough to fall into the income tax bracket, the tax deducted to your payroll will be return(by your employer supposed to be by adjusting your last payroll for the year). If they will not adjust your payroll for the year 2013 I guess you have to file on your own and they should issue you some form(which I believe is form 2316) indicating that they have over-deducted and an adjustment is made on your last 2013 payroll.
Better check the form they will issue to you before the end of January 2014 so that you can countercheck the amounts.
Hi,
Thank you very much for responding to my queries. 🙂 That info is very helpful. I was hired around August. As per my last payslip, my tax deduction was around 78K and the Net taxable was around 292K. Yes. I am only employed by one employer since my return. So I guess they can do the filing for me and maybe I’ll get some refund too. Thanks a lot for the info!
Happy Holidays. 🙂
I guess they have overdeducted you base on the deduction table. at the last pay they should make the adjustment to make sure what you should pay should only be the a month they have deducted. But in case ask them on January 2014 if they have included you in the list of employees under Substituted filling who knows they forgot 🙂 so that you wont incur late charges and interest just like what happen with Cong. Pacquiao 🙂
Hi,I’m a physician,I underwent 3 yrs of training in a goverment institution here in Manila,
While on training,we have monthly salary,(tax deducted) & I had annual ITR payment.
I graduated from training last June 2013,¤tly reviewing for my diplomate exams(specialty boards) I’m not practicing my profession,& no source of income.(Taong bahay & humihingi sa parents ng allowance.
What are the requirements that I have to present for my 2014 annual ITR.
Thank you very much & Merry Christmas!
Thanks Kimberly,
May I ask how old are you(sorry I should have not ask 🙂 ), well under the code(I think or in an IRR) if the person who has income is still minor(21 yrs old and below or have some incapacity) the parent will have to include such earnings under their ITR. Under the tax code(sa batas) all form of income should be declared. You could have avoided filling but the problem is as you mentioned tax was deducted on that “salary” you recieved(and yes you term it salary so I guess it is taxable). As for the documentary requirement I guess the form they handed to you as a record of the receipt of the “salary” should suffice to the ITR that you would file.
You can ask the people at the BIR what supporting document you need to substantiate that “salary” from training.
hi, I was a previous employee but now I will work as a contractor po for a company outside the philippines, but the work will like be online lang po.. I still wanted to file my tax since requirement ng bank sa amin un for our annual documents for housing loan. But I don’t know how I can file it, and how much po ba ang tax kapag ganito ang setting, may nababasa po ako na 10% of your salary, tama po ba? Please , enlighten me. Thanks!
Good evening Ivan,
So basically your here in the Philippines doing online jobs. Since you are a contractor you will be filling your ITR on your own. Being a contractor means you are a business owner just like running your own company. I am not sure what other documents you would need to file your ITR because you need to prove to BIR your sources of income. Usually in an online freelance work the client or whatever platform you are using(freelancer or odesk) you fill up some tax form. And in turn the client will send you some king of a summary or an annual tax filling document from their side about how much they have paid you and if tax was deducted from such. I am not fully knowledgeable on this so I suggest you ask a CPA friend(para libre) to help you out on this.(as for me I will have to research on this this would be a good topic to write about and also a possible business for me lolz)
I will try my best to get back at your query Ivan and hope some other readers will be able to help us out on this matter.
Hello po!
Sir I am a post-grad student and I was offered a part-time job as an english teacher in another school. Paano po mag file ng tax pag part-time? Is it the same as the ones who are “contractors”?
Thanks JJ Josue,
Nagresearch pa ko to answer to question so I hope I can help. For other tax practitioners please add your advice on this topic.
One question I have though is bakit ikaw ang magfifile ng tax mo? As I see it you have an employee-employer relationship with the school that hired you as a part-time teacher so they as withholding agents deduct from your payroll withholding tax and at the end of the year or at the end of your employment they should give you 2316 as proof of the deduction. Kung sila lng ang naging employer mo within the taxable year they should suppose to adjust the last pay they gave you reflecting an adjusted tax withheld para mag-offset ung tax na kinaltas sayo sa tax na babayaran mo sana dahil un ang magiging substituted filling na sinasabi nila. On the other hand if ung salary or income from your part-ime job ay hindi umabot dun sa threshold na kailangang bawasan ng withholding tax then there is no need din kung based nga dun ay hindi din aabot ung total income mo for the year sa threshold na required kang magfile ng ITR.
Now kung ang assumption na nangyari ay ganun nga at gusto mong magfile, you wil still file as employee using BIR form 1700. Im thinking also bakit mo naisip na contractor ka thereby you will file under BIR form 1701? Kung un ang sinabi nung school na they treated you as a contractor then make sure you registered yourself sa BIR as a practicing professional at you should have paid your annual registration, filed your questerly income tax, paid corresponding percentage tax or VAT kung ung bayad sayo ay umabot sa threshold ng VAT.
I hope this helps. Check mo ung mga payment sayo ng school if nakaltasan ka ng withholding tax if so ask for a form 2316 as proof of deduction sayo at magfile ka sa BIR ng form 1700 on or before April 15.
I have a question please. How can I check if my company really pays the exact withholding tax in 2316 to BIR? Are these considered public documents where I can easily request for it?
Very good question Kim,
Right now I don’t know it myself :). But the recent move made by the Commissioner will surely lead to that. Before when you are filed under substituted filling the employer can just give you a copy of the form 2316 but now BIR requires that your employer submits a signed copy as well to them. SO you get your copy and you also sign two copies one for the employer and the other to be submitted to the BIR. I heard that the line was long for the last day of filling of employers for form 2316 and it went long because each 2316 is supposed to be stamped received. IF your company did not pay to BIR the withholding taxes they deducted they will be liable. Now the question is how are we going to cross check that? I hope BIR has a web portal of all taxes being remitted to them as well so that employees can check it right away and report employers not remitting what have been withheld. At the same that would be good because all money will be accounted for 🙂
I guess you can also check BIR latest updates on tax filling with their campaign RFP - REGISTER-FILE-PAY
Hi sir. I’m gonna work online po since it is more easier and convinient. Do i need to pay tax ?
yes you have to pay your tax. This time you are not an employee but a business owner. You have to register as a professional or a contractor which is just a change of your classification from employee to self-employed. And since you are now a business you have to also comply with what regular business file and pay like percentage tax, quarterly income tax, and VAT if you have reached the threshold(but if all your income is from services to customers outside Philippines and paid to you in foreign currency like USD you will be classifief as Zero Rated VAT taxpayer.
I hope this helps’
How much do I need to pay if I want to hire an accountant to do my ITR? Thanks! 🙂
Thanks Nikki!
That is the question I cannot really have a definite answer :), well I am a accountant but I don’t have that wide expertise in tax matters specially if you have a complex tax situation. If you have a CPA friend better ask them(they might do it for you free). But in case your situation is really really complex, you got to seek a very good CPA. Yes not all are really good just like any other profession and since they are expert or specialist at their field they usually command price.
One thing more. If you are a business and have not been recording your transaction you might end up paying for the compilation service as well. Such service is actually bookkeeping service to determine the figures that goes to your ITR and financial statement(if you do have a complex tax situation).
Don’t look for the cheapest first, look for the best and from there you can go for the affordable one. 🙂
But if all you need is assistance in filling up the ITR form then it should not be more 2k(kung assistance in filling up lng talaga).
Hope this helps.
Hi Sir Louis Delos Angeles,
I had 3 employers last year. Company A (jan-feb), Company B (mar-oct), Company C (nov-dec). I was able to get my 2316 for all 3 employers and noticed that my Company B did not consider my income on my previous employer (Company A) when they computed my tax when I resigned to them last oct. So when my Company C annualized my income last dec, they only used the income provided on my second 2316 which comes from Company B. when I file 1700 can i just declare my 2 previous companies (company B and C) since my 2316 from company C does not reflect my income for jan and feb?
Will BIR be able to know that I did not file my jan and feb income? Do they keep track for the taxes paid by your employer?
Also will BIR be providing a copy of 1700 to my current employer after filing?
Thanks!
Wow your question is a super good example.
Let me tell you first that I am not a expert in taxation since I have been working outside the Philippines for almost 6 years. But let me answer it in as far as I know. As of today I can’t say 100% BIR can track your tax payment but with the latest rulings in regards to 2316 and other improvements on the BIR forms. I guess Commissioner Kim Henares is really doing her job and that is good. As for your employer’s remittance of the tax withheld BIR is keen on collecting as much since they have targets. It all now depends to the accuracy of the reports and remittance your employer file and pay. If your employer did not file and pay your tax withheld correctly it will take a long time or if only BIR discover’s the non-filling and audit is made.
BIR won’t be providing a copy of your 1700 to your employer, that document is yours. The forms filed by your employer will be their record of the amounts they remitted.
Hi sir louis,
I ask for a copy of my itr sa company where i work binigyan nla ko ng copy and its dated 2011,then i ask them where is the latest.sbi nla nxt year daw nla bbgay..i think may hndi tama dto.can i have your opinion sir..many tnx..
Hi Carlos,
Hmmmm yes tama ka. It’s fishy. It is already 2014 and the latest should be 2013. And I remember that such form 2316 should be given to employees filed under the substantiated filling on or before 28 ng February after the year of income payment(which sa case natin ay 2013). Dapat nabigyan ka noong Feb 2014 ng iyong 2013 income tax return in the form of 2316.
ask mo ung HR manager or ung CFO pag wala sialng binigay kundi pwede silang mapatawan ng fines ng BIR. Again I am not a tax expert but I do remember that there was a RR 11-2013 regarding the strict implementation ng pagbibigay at pagsasubmit ng employer ng form na ito. check mo itong site na ito http://gvacpas.com/2014/02/19/submission-of-hard-copy-of-bir-form-2316-certificate-of-compensation-paymenttax-withheld/
Hope this helps.
Hi Louis,
I have a question regarding the taxation of employees who work for foreign government. I have been offered a job to work for a foreign embassy and according to them, I would have to take care of my own tax obligations. Will my salary be subjected to the regular income tax rate or will their be a special handling since I will be employed by a foreign entity?
Thank you in advance.
This is a surprise question to me. But I found this article in the web which might enlighten you on this. http://www.businessmirror.com.ph/index.php/en/news/opinion/12218-taxation-of-filipinos-employed-by-international-groups-foreign-embassies
Hello. My husband is a financial adviser/insurance agent. He gets his commissiion on a monthly basis and 15% tax is deducted from his commission. The 15% is deducted by the company. He also pays 3% percentage tax based on his gross commission on a monthly basis. (Form 2551M), for this one, he pays it directly to an authorized bank. I would like to know if he prepares his yearly ITR (form 1701) and still has to pay additional taxes, can he use the 3% percentage tax that he has paid monthly as a deduction is his ITR? Thanks.
Yes cme. Percentage tax is one of those taxes that could be claimed as a deduction in computing income tax. Check it out in this site http://www.punongbayan-araullo.com/pnawebsite/pnahome.nsf/section_docs/RD781X_25-3-09. Search for percentage tax once you open the page.
Hope this helps.
Hello sir Louis. I was working for 5 months (june2013-nov2013) at my previous employer, and now my new employer requires me to submit my bir form 2316. I went to my previous employer but the hr said that they are not yet updated. They said that i should just go to BIR and apply for a TIN iD. But i need my 2316. Can the BIR provide my 2316 instead? I badly need it for my requirements. Hoping for your reply. Thanks in advance.
BIR form 2316 is the obligation of your last employer. If they can’t provide it it means they have not done their part of filing. They should give each employee their 2316 on or before the 31st of the current year for the previous year. Dapat nakuha mo ung 2013 BIR 2316 mo nung end of January this year. Also tignan mo ung mga payslips mo? If they did not deduct you tax they didn’t bother applying you for your TIN(mandatory yan pag first job). Kaya ka sinabihan na magpunta ta mag-apply sa BIR kais ayaw nilang magmulta… may regulation na kais ang BIR about employers not giving 2316 on time.
Other solution is to inform your new employer’s HR about your previous employers tardiness para as if first job mo ung sa kanila. Magfill up ka ulit ng BIR form 1902 ata, then you go to the RDO of your new employer to file that.
Hope this helps kc
I am an OFW for 2 years. I came home for good last december 2013 andlast feb 2014 i was hired by a company. My concern is how can i apply for credit card if i dont have an ITR for 2 years? Thnak yoi
Thanks Rhea,
That too was my problem. Unfortunately back then BIR form 1703 or Annual Income Information Return is not so famous yet.
It is a form where non-residents like OFWs can declare their income outside of the Philippines which is not subject to Philippine tax.
It becomes an information sheet of your earnings outside of the Philippines and I think in my opinion can be substitute for ITR.
In case you don’t have any Philippine document to prove your income ask the credit card company what proof can you submit besides an ITR which you obviously don’t have. It could be the ITR equivalent from the country where you work(like for example in the us they issue W2 to employees), or it could be your paychecks or payslips from your overseas employer, and the likes.
Hope this helps Rhea!
hello! I’m hoping that you could help me with my exams, I have a debate and I am on the negative side on reducing income tax. I couldn’t find any substantive reason why shouldn’t our income tax be lessen, there are some beneficial things that we could get in income tax and as what you said as a good citizen we should pay our tax because it helps our government but what will be your view on reducing tax income? Thank you!
Hi Kim,
Just to clarify by “I am on the negative side on reducing income tax” means you are against reducing income tax right? Well in my opinion there should be income tax as part of nation building but topic in question here is how much really should be the income tax. It is hard to gauge the amount since in the Philippines we are actually over taxed as compared to our ASEAN neighbors and it is due to the corruption here and there.
If you asks an economist their probable answer is reducing income tax for a certain level will actually be beneficial since people will now have more spending power. So instead of paying it to the government which will be eventually be in the pockets of corrupt officials, people get to spend it inside the economy adding to our GDP since Pinoys get to have money to buy more.
Now if we take out corruption in the picture, I think the best reason we could justify not reducing tax is that we can have a bigger public funds which we could use for emergencies(like for this typhoon Ruby), we could allocate more funds to make full blast construction for roads, bridges, seaports, and airports. Again taking out corruption and assuming public funds are used well, the government will now have enough funds to fast track infrastructure development without having to loan thus avoid high interest and benefit earlier from these construction since development could be made faster thus our businesses, tourism, and people movement could be done right away instead of waiting years and suffering heavy traffic and lost of income from such traffic.
Hello Sir..Just want to ask when should be the deduction if after computing your ITR they found out that you have a tax deficit..Is it true that deduction should be done on the end of that year (DECEMBER)? .please help me
Hi Noemi,
Technically companies do make the adjustment at the last payroll in December so that they can prepare all employees under the substituted filing. That way it would be simpler for both employer and employee in handling your tax for the year.
Hi Sir, good day! I just want to ask for the possible reasons of having a tax refund as well as having tax deficit. A friend told me that she got a salary increase for the year 2014 (around July) with the same employer. Their HR do tax annualization and they told her that she won’t be having a tax refund, but instead a tax deficit because of that increase in her salary. How could it possibly happen? TIA.
Hi Dyaneh,
Yes the salary increase resulted into the tax deficit. The reason behind is that there is a difference between the actual tax deducted every payroll against the annual tax you need to pay. So what happened is from Jan-Jun your friend have a small tax deductions. From Jul to the end of the year there would be a a higher deduction due to the increase in salary but still this is based on the schedule BIR gives. upon the end of the year the HR annualizes the employees total annual pay and from there the correct tax will be competed base on the tax table(5-35% depending on the salary bracket and allowable deductions etc). If the actual total of tax deduction/withheld per payroll is higher than the annual tax computation you have a refund because of over deduction arising from the adjustment. If the actual total of tax deduction/withheld per payroll is lower than the annual tax computation you have a deficit because of under deduction arising from the adjustment and therefor you have to pay the remaining tax you have to pay.
I hope this helps.
Thank you so much Sir!
Hi Sir,
Patulong naman po. Online po yung source ng income namin ng business partner ko. We registered it as business partnership/non-vat. We’re paying 3% from monthly gross, quarterly and monthly withholding tax kasi nag declare po kami ng 10,000 each salary kaming dalawa ng business partner ko. Ang question ko po eh, pwede ba na hindi na kami mag bayad ng monthly withholding tax? Minsan, hindi enough young monthly income nung business to pay me and my partner, then nag wiwithheld pa din kami. last question ko po eh paano ba i.ipafile ang form 2316? Nag advise po kasi yung bookkeeper namin noon na okay lang daw mag withheld, pwede bang hindi nalng? 😀 I really need help , hindi na kami kumuha ng bookkeeper. Thanks po! 🙂
hi Mari,
Question ko lng is are you registered with the SEC and the BIR? If so tignan mo ung COR ng partnership nyo. Nandun ang required tax payments nyo. Since non-VAT I believed the one you are paying is the Percentage tax. Sorry but that is the rule. Any business not paying VAT will fall into paying Percentage Tax. Such tax is actually deductible to your partnerships income tax.
Medyo naguluhan ako Mari. Why are you filing 2316? You are partners not employees of your partnership. If you are receiving the 10K as salary as employee ibang tax na naman sa inyo un. Actually I suggest you see a CPA friend who can guide you in your tax concern. I am not quite the right person in handling taxes since it is not may forte. Ask your CPA friends and bring with you your COR, the other BIR filings you did and other payments you made in the conduct of your business. It might be better not to get the 10K as salary but rather file your partnership income and declare it as distribution. The partnership income is taxable but the distribution of profit or loss is not taxable if you are a resident citizen or a resident alien. (napaghahalata tuloy madami na akong di alam sa partnership accounting and taxation lolz).
Hope this helps Mari.
Hi Sir,
Thank you for the fast reply. Medyo naguluhan din ako sa sistema ng partnership. Actually bago pa talaga kami sa negosyo, kaya di pa alam ang pasikot sikot. Nagkamali pa kami ng kinuha na bookkeeper. Dalawa lang kasi kami ng partner ko, We also work as employee and owner at the same time. Anyway, we thought that we’re to pay individual withholding that’s why we withheld tax for our salary. I will look for a trusted cpa for this matter. Last year, nagkaproblema kami sa bookkeeper.
Anyway, what will happen to the individual tax we paid?
You really are a great help sir Louis! I am really thankful na nakita ko ang website na ito.
Yes, we are registered with the SEC and the BIR. Sa COR namin, Income Tax, Registration and Percentage Monthly.
This site is really helpful.
Sincerely,
Mari
No worries Mari!
So hayun pala, your partnership is only liable to pay BIR Partnership income tax, Annual Registration, at Monthly percentage tax. Pwede naman na may salary kayo which is expense ng partnership pero since it is a salary may withholding tax pa un dapat as an employee. Iba pa un sa Percentage tax. Ung Percentage tax ay tax ng partnership hindi sa inyo. Since under sa tax law ung share nyo sa profit and loss ng partnership ay not subject to tax why not look into the possibility na wag na kayo magsalary but deduct all necessary expenses(operation and business expense) para lumiit ung magiging taxble income ng partnership at pagkatapos idededuct nyo sa tax payable ung lahat ng percentage tax since Percenatge tax is deductible against sa tax payable. kung ano man ang natira sa inyo na un wala ng tax.
Pero again depende naman talaga un. kaya ung iba is telling to have salary for partners ay para mas lumiit ung idedeclare na income para ma maliit tax ng partnership. Ang problema nga lang nung ay ung salary nyo ay subject to income tax sa inyo as employee. Kaya better ask the assistance of a CPA kung ano ang mas magandang gawin nyo.
Hope this helps.
Okay sir Louis,
Mas malinaw na sa akin ngayon. We are a 2-year old business, and we are learning a lot. You really are of great help. One of the reason why we withheld individual tax is because we want to travel in the future and I think isa sa mga kailangan pag nagtravel is certificate of compensation payment (2316). I will definitely ask for assistance regarding this matter. Iba talaga pag may alam!
Thank you so much for your time!
Salute to you!
Mari
No worries Mari. Bakit kaliangan pa ng 2316 kung may business ka naman as source of income? The partnership registration and annual ITR of the partnership should be a proof of income. But anyways if that is the best way whay not di ba?
It is my pleasure to help
Bakit need pa ng witholding tax samantakng ang 10k ay bonus ng partnership.. hehehe
Hi Glenn. I am not quite sure kung ano ibig mong sabihin by “bonus” ng partnership. Is this something na deniclare ng partnership at nadistributes sa partners or this this a regular bonus for employees who are also partners.Should you need clear advise on this I suggest you seek professional services of a BIR accredited CPA.I will research about this(been long time since i encountered partnership accounting and taxation).
Hi Sir,
I was previously an employee, but my employer said na may tax shield kami dati para mas malaki ang take home pay. Kaya I don’t think ibinabayad kami ng tax dati. My salary then was 10,500. Now, freelance worker po ako, pero not regular, pasulpot-sulpot lang. But with the little money I get, I invest in the stock market. I want to file an ITR para po ma justify yung source nung pinagiinvest ko. Tama ba ako? Ang question ko po is, if I file my ITR, and change my status from employee to contractor / self-employed, what do I need to do? Do I need some documents from my old employer so I can register / reclassify myself as self-employed?
Thank you so much!
Jor
hi Jor,
Congrats for investing and for working even sa small na paraan. I hope in time lalago yang freelance job mo.
You have to file that you are now slef-emplyed/professional tax payer. I am not sure if form 1902/1905 ang dapat na ifill up and ifile sa BIR. If you file as self employed or professional as if you are a business so after filling medyo may pagagawa pa BIR sayo like having your own books of account at official reciept(ito ung magpapaprint ka sa mga accredited printers). better go to the RDO where you intend to practice or as your home offic eng freelanc ework mo. In case you were under a different RDo sa work mo magfifile ka din siguro ng change RDO. So you might need proof from your old employee RDo like your 2316.
Hope this helps Jor
Hi Sir!
I am a full-time trader and my income comes from doing forex trading online. Do i need to declare it? I wanted to declare it po sana. Paano po pag fill-up ko sa ITR? Self-employed po ba? Ano ang magiging deductions ko? Thanks for the reply..
Sincerely,
Jenny
Hi Jenny,
First of all saang Forex yan at may tax bang dinededuct sayo? Second may TIN ka na ba?If meron anong type(Employee or Mixed income)?
Since its forex so walang special taxes unlike sa stocks. If you have your TIN already yes of course you can file as a self-employed. With that you are entitled to personal deductions and if you have registered as legitimate business you can claim business related expense as well. So if you are purely trading as an individual you will have to file as self-employed like a professional and your deductions will only be personal exemptions.
Now ung question na “do ineed to declare it” is already an ethical question 🙂 nasa sayo na un. But a sfar as BIR is concern all income should be declared and corresponding tax should be paid.
Hope this helps.(I am not a tax expert, if you need further clarification better ask a CPA who handles tax well specially if your gains from forex are of significant amount)
thanks for the reply. now I know what to do. God bless you..
Hi ask ko lang kung saan nkakakuha or nakikita ang Online ITR ko..please help..thankyou..
Hi Leo,
I believe wala pa sa PInas yan. If you are employed to just one for the whole taxable year and have no other taxable income besides income from employee-employer relationship malamang your employer has filled you under the substituted filling. Dapat binigyan ka nila ng form 2316 as your ITR. If not like you are a business owner, a practicing professional, contractor, or a mixed income earner(that is employed pluse sideline pluse own business) then you have to file your own ITR every year before April 15.
My question is who told you that there is an online ITR? Maybe you can download the form online but you still have to fill it up and file it to BIR
Hope this helps.
Hi sir,
Thank you for this very helpful article. I have been employed in one company for 2 years and 7 months. I started july 2 2012, on october 2013 i updated my status to s1.. sobtang laki ng tax naming mga empleyado.. sabi samin auto calculated na daw.. naiintindihan ko yun.. pero bakit hindi po ako nagkaron ng tax refund nung nag update ako ng status, sabi po kasi sakin iaadjust daw yung tax ko for the year of 2013 kasi additional 25k exemption. Ang nangyari mas tumaas pa tax ko nung december. Pwede po ba yun?
Hi Rachelle,
I will writing about this soon(sana makapagstart ulit magblog 🙂 ) but let me briefly explain how our taxes are computed. In reality we pay our taxes suppose to be on a yearly basis meaning computation is computed by year not by month or whatever payroll scheme ang gamit ng employer. In order for our government to have funds they have withholding taxes(ang daming klase nito but lets stick to income tax on employee). Its either your employer uses a payroll systems which calculates this withholding tax or ung withholding tax table from the BIR. At the end of the year icocompare ung annual income tax mo na dapat mog bayaran vs sa total withhled tax… kung sobra ung nawithheld iaadjust ito sa last pay mo which mostly call refund(but in reality it shouldn’t be called refund since iaadjust naman sya) or kulang nabawas sayo kaya mas malaki pa tuloy ang tax mo.
Now sa question mo hindi ko masabi kung ano effect nung change since di ko alam kung ano ba ung status mo dati at kung ano pa changes na nangyari(like may increase ka ba sa sweldo, may addtional taxable income ka ba like malaki ung 13th month pay at de minimis mo kaya naging additional taxable income, may bonus ka ba, etc.) Ito ung mga pwedeng dahilan kung bakit mas mataas ang ibinawas sa last pay mo kasi lumaki total taxable income mo… if not like pareho pa din sweldo at wala pang bonus etc then they might have made a mistake and better approach ung payroll manager mo to explain to you bakit mas mataas ung tax wihheld. Better prepare your payslips to compare baka may namiss lang silang nawithheld na at nung icompare ung total basis nila eh di un nasama.
Again hindi po ako tax expert but if you need advice please humanap kayo ng CPA na may malawak na kaalaman sa tax or di kaya isang lawyer or tax agent na accredited ng BIR na alam ang ginagawa 🙂
Hope this helps
Hi. Paano naman ang filing ko ng 1700 kapag 2 employer w/in a year..
1st employer - 0 tax withheld ang 2316
2nd employer- 1xxx tax withheld ang 2316
hindi ba ako magkakaproblema kung ang total compnesation ko ay hindi nagtally sa tax withheld?
Hi Fie,
Nangyayari yan talaga. SInce you are considered to be mixed-income meaning you have two sources of icome… the first and the second employer. I assume what happen is ung forst employer totally refunded ung nawithheld sayou dati nung nagresigned ka para clear na. Thw second employer might not be aware of the income from the first employer kaya siguro namali ung withholding tax braket na idineduct nya sa payroll mo.
Since hindi ka na pwede isali sa substituted filling ikaw na ngaun ang magpafile ng sarili mong income tax kaya nga form 1700. Kung kulang mas maliit ang nawithheld kaysa sa dapat mong bayarabg tax after ading the two income source less allowable deductions and tax withheld ay magbabayad ka pa sa April 15. Pero pag mas malaki ang nawithheld sayo dapat may tax refund ka but alam mo na governo di basta basat nagrerefund… you can use it as credit or deduction na lng sa future income tax na babayaran mo.
I hope this helps. If you need furtehr assistance please look for a BIR accredited CPA to help you with your tax matters. I am not a tax expert and not yet a BIR accredited CPA. My opinions and advices are in so far what I know about our tax system.
Hi. I just have a question. Currently, we have a lending company. In filing for taxes, do we really need to hire an Accountant that is accredited by SEC? What are the forms and requirements that we have to accomplish? Thank you.
Hi Joy,
Dealing with SEC needs an accountant that it is accredited with them. The question now is your lending company under the SEC and other regulatory bodies(like BSP). If they require it they you should comply.
As to the forms and other requirements I am not fully knowledgeable myself so better check the SEC. They should have a list of accredited CPAs and firms.
Hope this helps.
Hi, good day!
I have a question and need assistance… I have an employer dated JAN 2014 but never received any salary from them because they held it. I wasn’t able to get any clearance from them or backpay yet. Now, the 2nd company that I started in MARCH 2014 decided to zero exempt me from my married with 3dependents tax status. How can I ask for a correction on this one? I even dont have a 2316 from the previous employer. They said I need to file 1700, how true is that? Will I get a refund from BIR then? Thanks in advance!
Hi Tatrmp,
I apologize I didn’t quite get clear what do you mean by “Zero exempt”. The question is when did you learn the error? If you knew the error before the last pay in 2014 this should have been corrected. If the error was discovered in Feb 28 of 2015 then I guess you have to file your ITR yourself to correct the error and yes ask for a refund from the BIR(which I believe will be in the form of a tax credit since the government wont give you back cold cash).
Again I am not a tax expert and this is so far what I know and understand about your question/situation. For further help please seek advice of a BIR accredited CPA or a tax lawyer.
Hi Sir. Just wanna ask some questions. My parents just filed their BIR documents last march 4, 2015, but we started our business last 2012. We already payed for the penalties because we haven’t filed for BIR when we started the business back then. So here’s the thing, are we required to file for the ITR this coming april 2015 even though we just filed documents at BIR last March 4 2015? Cause, I think ITR should be filed 1 year after you registered at BIR. But I’m not sure. Can you help me with this Sir? I would reallt appreciate it. Thank you.
Hi Ellie,
Thanks for your question Im sure it will help lots of people.
First of all we need to clarify what did you file last March 4, 2015? If this is just the registration of your business, did the BIR included in the penalties the suppose taxes you should have paid for the years 2012, 2013, and 2014? If not so then they should be filing for those years. ON a normal situation last years Income tax is filed on or before the 15th of April(this may be adjusted depending on what day April 15 falls)of the preceeding year you are declairing. SO for this coming APril 15, 2015 you should be filling ITR for 2014.
The documents and other receipst the BIR gave you should indicate what penalties have you paid. Check if Inocme tax for year 2012, 2013, & 2014 is listed there including the corresponding penalties for non-declaration and non-filing and the corresponding interest and surcharges is there. If not you might need to consult a BIR accredited CPA to correct whatever needs to be corrected and file it to BIR to avoid further interest, penalties, and surcharges.
As much as possible pay your due taxes on time becuase often times the interest, penalties, and surcgahes are bigger than the original unpaid taxes itself.
I hope this helped Ellie.
Again I am not a tax expert. FOr your tax matters please consult a BIR accredited CPA or a tax layer. ALl my opinions and advises is based in so far what I know as a CPA.
Thank you Sir. This would really help us po 🙂
Hi I had 2 employers for the year 2014. My previous employer said they said tall taxes withheld are declared with BIR. I would like to know how will I calculate my tax deficit if any? I am really confused :((((
Hi Kim,
This is a good question. Since two employers within the same taxable year, you dont qualify for the substituted filling. First make sure you have all the documenst from both employers(Form 2316).
Step one: Compute your supposed 2014 tax payable
To do this add your taxable earnings fron the two employers less allowable deductions and personal exemptions to get taxable income. Then based on the amount you get you consult the tax table(the annual tax table) to get your tax rate. Multiple the amount with the applicable tax rate at kuha mo na ang tamang tax na dapat sanay nabayaran mo.
Step two: Compute the total tax withheld
Add the total tax withhelf by both employers… that’s it pancit 🙂
Step three: Determine your tax refuund or tax deficit
Deduct the amount you get in step to to the amount you got inm step one. Pag mas malaki pa din ung nasa step one TAX deficit un, meaning kulang ung kinaltas sayo so dapat mong bayaran after mo magfile sa BIR on or before April 15 this year.
Kung mas malaki naman ang nakaltas sayo kaysa sa dapat mong bayaran eh di TAX REFUND 🙂 good luck na lang kung makukuha mo pa ito from the government in cold cash… most likely tax credit nalang sya for this year.
I hope this helps KIM!
good day, yung ate ko po ay nagtrabaho bilang ESL teacher in cebu, homebase po cya, paano ba ifile yung incometax return niya,, kasi cla po ang pinagfile ng company na pinagtrabahuan niya,,
Hi JoMay,
Una dapat nating malaman kung papano ung relationship ng ate mo sa pinagtratrabahuan nya. Kung Employer-Employee at local lng dapat ung employer magfile if ung lng ang naging employer nya for the whole 2014. Kung foreign yan malamang dapat magfile ung ate mo on her own at dapat as a contractor not as employee.
Aside from that tanong ko lng kung ung pay na narerecieved nya ay net of withholding tax. Kakailanganin nya ung mga supporting docs(2316 pag employee or 2307 ata if contractor). May for for individual income tax(form 1700 ata) fill up lng ung related fields at atatched supporting docs at pay kung deficit. Deadling is April 15 of the following year and filing so ung sa darating na April 15, 2015 ung year 2014 ung pinafile mo.
Hope this helps!
good day. tanong ko lang po kapag 8000 ang monthly income subject pa rin ba sya for monthly witholding tax deduction since under the provision of RA 9504 not subject to tax. marerefund po ba yun tax payment. Thank you po.
Hi Lani,
Yup dapat walang withholding tax kasi Minimum Wage Earner. Pag nawithheldan ka sabihin mo sa employer mo para adjust nila. If ikaw ay nagpafile ng sariling ITR pwede mo incidicate un at ask for a tax refund. Most likely magiging tax credit na lang yan. ALam mo naman government natin mabilis kumuha ng pera mabalgal magrefund 🙂
Does this apply to independent contractors? Since as an IC, monthly income can be irregular and in my case, some months would be as low as 8000.
Hi Jaysen,
The filling of ITR is done annually so it doesn’t matter whether you have earning in one month or none on another. What is being reported and filed in your ITR is the previous year’s earnings.
Hope this helps Jaysen.
Hi. I am an independent contractor. Can you give me an idea about tax exemption for dependents like children. Thank you.
Hi Jaysen,
The same rules apply as to exemption to children. Generally the husband working/earning claims the exemption and the maximum is still 4 children who are below 18 yrs of age and not gainfully employed. you can check it out here http://www.bir.gov.ph/index.php/tax-information/income-tax.html under Frequently Asks Question no.6.
Hope this helps.
Hi Sir Louis,
I’m very confused on what i’m going to do now since April 15 is nearly approaching. Here’s my situation. I have 2 employers for the taxable year of 2014. I received tax refund from Company B(current employer). Now rumors had it that we need to pay that if our tax is not consolidated if we had more than 1 employer in 2014. The thing is I did not get 2316 from Company A, cos I absconded from that employer, for personal reasons. So I don’t have any document coming from Company A regarding my tax nor did I declare it to my current employer. Now here comes my dilemma, should I still submit 1700 this april 15? What are the repercussions if I did not submit one? I’m worried that one day tax collectors will come knocking in my doorsteps saying that i need to pay tons of pesos because of the misconception of not filing 1700. Please enlighten me.TIA.
Hi Knives,
Just one disclamer. I am not a BIR accredited tax agent and the opinion I will give you is in so far what I know.
Just a clarification, why did Company B refunded the taxes they withheld? Aren’t they aware of your previous employer? If they refunded it so did they not include you in the list of employees under substituted filling?
If they did include you in the substituted filling then there is no need for you to file 1700. But if they didn’t include you then you will have to file your own ITR form 1700. The question now is did Company A deducted tax on your salary? If so then there is a high possibility that the combined salary from Compnay A & B will result to a tax payable on your side. The issue will be what will be your proof for the deductions made by Company A.
Here is what you can do compute the tax payable for both Company A & B disregarding the taxes deducted by Company A and hope that it wont result to tax payable or if there is it will only be small. Just pay it in case at least your “konsensya” is clear. I think you wont be able to file only your income form Compnay B since they refunded it and you should be included in the substituted filing but if they didn’t then they are just avoiding issues with you having another employer before them.
The best way is for you to secure your 2316 from Company A to truly file a proper tax return.
Hope this helps.
Hi!
I have Previous Employer last 2014 from Dec2013 to Oct2014 then naabsory ako sa Current company ko. I have bothe ITR on Previous and Current. The problem is di nadeclare ni Current ung Net tqxable income ko at naglagay ulit ng Another 50k exemption. Kaya nagkarun ako ng Tax Deficit. Althougj may siningil nman sila na Tax for the last quarter di nman tama kaya Ived asked kung baket nefore nung kakabsorb kulang.. There are usig annialized daw. napasa ku nman sa knila unf 2316 pero di nila inadjust? T
saka sabe ng isang offciemate ko ma totoo ba na dapat irefund ung Tax ko sa Previoud employer kapag hinde kase hanggang octover lang daw ako. kaya dapat daw irefud un
Also Would like to ask kapag hinde ako magfile anu magiging matrack ba nila un or panu ko malolowrt ung tax deficit ko? anything to declare b?
Also Nagsumbmit ako ng 2316. Mukhang si employer dapat naconsolidate na un sya. Eh honde nya nagawa so anu mga poaaible na gawen konsa knila?.like charge ba dapat sa knila?
Hi Jayson,
Medyo sumakit ang ulo ko 🙂 ang gulo lolz.
Okay itally ko muna ung situation para alam natin ang dapat gawin magulo kasi.
1. You have 2 employers for the taxable year 2014
Previous employer is from Jan - Oct 2014(for the purpose of calculating your tax for the year 2014 only)
Current employer is from Nov - Dec 2014
2. Your ITR under 2316 from the current employer says you have a deficit meaning kulang nakaltas sayo for 2014
3. You submitted your 2316 covering Jan - Oct 2014 from previous employer
Ang mga tanong mo:
1. Refund from previous employer from tax withheld
2. Pag di ka magfile ano magiging?(ano gusto mong malaman pag di ka nagfile?)
3. Paano malolower ung tax deficit?(ano ung declare?)
4. Nagsubmit ka ng 2316 from previous employer, so ano dapat nagawa ng current employer?(tama ba pagkakaintindi ko sa mga tanong mo 🙂 )
Okay let me answer to the best of my abilities but again just a disclaimer: I am anot a BIR accredited CPA nor a tax lawyer. SHould you need help to fix tax matters seek a BIR accredted CPA or a tax lawyer with wide experience on this matters.
So as I understand you are purely earning compensation coming from an employer-employee relationship since 2316 ang naissue sayo. Also since you have two employers within a taxable year di ka na pwede isama sa substituted filling meaning ikaw ang magpafile ng sarili mong income tax return on or before April 15, next week na 🙂
Now in your current employer may doubts ka kung tama ba ung ginawa nila since nagbigay ka naman ng 2316. In practice dapat inaadjust nila ung withholding tax mo kaya nga sila nanghihingi ng 2316 if you have a previous employer within. Ang tanong ko is alam ba nila na may employer ka na dati pa? Sinc eparang sa mga statement mo ay as if binase nila ung withholing tax mo as if sila lang ung employer mo for the year. May habol ka ba against them dahil sa mali nila? Sagot is wala since obligation mo na bayaran ang tax mo. ANg magagawa mo lng ay magcomplain sa kapalpakan nila. In practice kasi dapat nga wala ka ng refund or deficit kasi nacocompute nila yan base sa docs na naprovide at iaadjust ung taxes mo sa last payroll mo for 2014.
Dapat bang nagrefund ung previous employer? In practice ung iba ngarerefund para di na sakit sa ulo sa pagprocess ng final pay mo at reporting sa BIR. But that usually happens kung naemploy ka lang ng a few days or months or if nagtsart ka sa katapusan ng taon like kung ung prevuous employer mo nagstart ka ng Nov mas maiging irefund na lang para di na sakit sa ulo sa pagrereport.Kung hindi man narefund ay ok lng basta may proof ka which is the 2316.
Pag di ka nagfile eh di pwede kng makasuhan or habulin ng BIR pag nahuli ka nila or namonitor nila na di ka nagfile at di ka nagbayad. Tapos pag di mo pa din bayaran or file pag nahuli ka na mapapatawan ka ng penalties, surcharge s, at interest.Kalimitan mas malaki ang mga yan kasy sa orginal na tax na dapat mong bayaran…
Pano malolower and tax deficit? ANg tanong bakit nga ba tax deficit? Since ikaw naman na nga magpapfile mas maiging irecompute mo muna baka mali talaga ung ginawa ng current employer mo. SO una hanapin mo lahat ng payslip mo or kung wlaa na ung dalawang 2316 mo covering the year 2014. Tapos iadd mo ung Gross Compensation less allowable and personal dedcutions(sensya na medyo too technical ata ito will try to cover this in another blog post). Ang makukuha mo ay ang iyong taxable income. I compare mo ito sa tax table para madetermine mo ang tax rate mo. Imultiply mo ung dalwa tapos ito dapat ang tax mo for yers 2014. Icompare mo ito sa total tax withheld sayo kung mas malaki ito kasi sa tax withhled deficit nga, kung mas malaki ung nawithhled refund ito.
Again since mali ung nagawa ng employer mo(which pwede mong icomplain but again obligation mo pa ding magabayad kung deficit ka nga) dapat mo pa ding iatama un bago ka magfile para ung tama ang dapat. Nasa sayo na un kung ipafile mo ba ito ng tama or itatago mo na lng ito(Konsesya ika nga).
I hope this helps. Sensya na din at masyadong mahaba ata
Again my disclaimer: I am not a BIR accredited CPA nor a tax lawyer. The above is just my opinion in so far as what I know on our tax laws and procedures. If you need further assiatnce plase seek the services of a BIR accredited CPA or a tax lawyer with a wide experience on this matters.
Hi Sir Louis, may question lang po ako, pano po ako mkakapagapply ng ITR dalawa po kasi ung naging employer ko pero ung isa wala nmn kming tax or non taxable kmi, ang prob ko lang po ang sabi kasi ng new employer ko ako daw ang magaasikaso na sa mismong Bir kasi nga dlwa ung employer ko ng 2014, ano po kayang mga requirements ko?need b ng cert sa dati kong employer n non taxable ako sknika, First time ko lang kasi magfafile kaya hindi ko alam . Saka what uf di ko mafile ngaun kasi ang lapit na ng April 15 makukuha ko p rin b un kht nextyear na? Thank you po
Hi keap,
Yup lapit na nga at the same time nagkakagulo sila kung mapapatupad ba ung online filing for all fillers. Ito link kung gusto mo mabasa ang lastes sa issue na ito http://www.mb.com.ph/bir-mum-over-suspension-of-online-tax-filing-to-issue-new-guidelines-next-week/.
Anyways sa tanong mo na ano kailangna mo is of course your 2316 from both employers. Un kasi proof na di ka nga nakaltasan ng tax at un din proof kung MWE(Minimum Wage Earner)ka sa dati mong work kaya hindi dapat kasali sa computation ng combined taxable income mo for year 2014. Tama ung cirrent employer mo kais nga di ka na macocover ng substituted filling so ikaw na magfifile ng ITR mo. Ang unang importante is mafile mo sya… pwede namang ung bayad ay two gives pa ata(nit sure about it kais magatagl nga akong wala sa Pinas kailanagn ko ng magupdate).
Ito ung RMC that tells that fillers should file electronically through the offline version na iiemail ata http://www.bir.gov.ph/images/bir_files/internal_communications_1/rmc_no_14-2015.pdf
Check nyo ito for those who can’t file electronically http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%205-2015/RR%205-2015.pdf
at ito pa http://www.bir.gov.ph/images/bir_files/internal_communications_2/rmc_no_18-2015.pdf
Ito ata ung link to file electronically but I am not 100% sure(please search the internet)
http://www.bir.gov.ph/index.php/eservices/ebirforms.html
http://www.bir.gov.ph/images/bir_files/ebirforms/job_aid_how_to_fill_up_1700_v2013.pdf
I hope hindi ito lalong nagconfuse sayo …. ako din kasi nacoconfuse na sa BIR sa issue na ito… but anyways I hope maresolve nila nga problem this Monday.
Hi Sir Louis,
Good eve! Just wanna ask po few questions regarding the filing of income tax return and here’s my case.
i have two employers last year, Company A (Jan-March) and Company B (April-December). Both companies already gave the BIR 2316 required to file income tax return, unfortunately i just knew recently that the BIR 2316 i have from my previous employer(Company A) was lost. I already asked my previous employer if do they have a copy of it but they don’t have and told me maybe in the head office however it might not that easy to request and the head office would not entertain me. So, please see below for my questions.
1. Is it possible to ask a copy of BIR 2316 to the BIR? If not, what should i do? (Please be noted also that i can’t ask a copy to my current employer which should be submitted the BIR 2316 from previous employer because they did not require me and just suggested to apply new TIN due to the TIN processed by my previous employer was not valid as per new RDO where i transferred.)
2. Would be possible to file income tax return for my current employer only since its BIR 2316 i have and not to include or declare for the previous employer?any conflicts might exist?or what would be the effects of doing that way?
3. What would be the effect if i’m not going to file income tax return?
Hope you can help me. Thanks in advance! More power!
Hi Trish,
Medyo ok ung tanong mo. Ang tanong ko is may kinaltas bang tax kay employer A and if there was narefund ba sayo ito since two omnths ka lang?
This is imporatnt para ang magandang way is ung suggestion no. 2 mo 🙂 since wala namang tax ung sa company A at kung hindi naman malaki ang effect nun at since invalide pa ung TIN mo dun(I wonder saang TIN nila niremit ung tax na kilatas sayo?)
As for your No. 1 Question the issue is kung may obligation bang magbigay ng 2316 pag humingi ka sa previous employer(meaning re-issue). Answer is they must provide you that copy upon request(but i have to research on this kasi madaming issue ng ganito.Let me seekung may ruling mismo ang BIR) . Problem is practice ng mga HR ngaun is pahirapan pa which is should not be.
As for your no. 3 you might be caught and the BIR will file a tax evasion case against you 🙂 if you didn’t file 🙂 . You need to file if your earnings or your case does not cover the exepted ones(Minimum wage earnesr, special exemption, etc.) If you didn’t file your ITR may ipapataw na sayong non-filing penalty. Kung may babayaran ka dapat may kasama pang penalty and surcharges for non-payment, at tumatakbo ang interst nun haggat di mo binabayaran ang dapat na tax plus penalties plus surchares plus interest sa lahat ng di mo pa nababayarn 🙂 ganun katindi ang parusa sa negligence 🙂 but syenpre PInas ito hanggat di pa gaanong maayos ang monitoring system ng BIR eh ung mga malalaki lng mua hahabulin nila 🙂 sa ibang bansa kasi automatic pa nga na garnishment of your money in your bank account pag dapat kang may bayaran pero di ka nagbayad.
So better file and pay your taxes correctly who knows minalas ka at ikaw naisipang imonotor at singilin di ba 🙂
I hope this helps trish and again my disclaimer that I am not a BIR accredited CPA nor a tax lawyer. My opinions are based in what is so far I know. If you need further and clearer answers to your questions please seek the services of a BIR accredited CPA or a tax lawyer with a wide experience on tax matters.
Thanks Sa Response..
Yes Di nila nailagay ung Previous Employer Income sa 2316 at naglagay ng personal sila ng Personal Exception. San pwede magreklamo?
Jaosn kung employer mo pa din sila medyo hinay hinay lng baka balikan ka nila hehehehehe. kung hindi naman malaki ang difference at maliit lng naman patawarin mo na… pero pag malaki impact siguro kausapin mo muna sila bagao ka magfile sa BIR 🙂 (opinion ko lng po ito so wag idahilan na sinabi ko okay)
hi sir tanong ko lang..naguguluhan kasi ko ngayon.. sa work ko ngayon wala naman kinakaltas saken na tax..kahit nga sss, philhealth, pagibig ako nagbabayad.. nakalagay din sa contract ko na non-taxable yung income ko.. ang tanong kelangan ko ba mag file ng itr? salamat sir..
Hi red,
Genrally kung Minimumwage earner ka hindi na kailangang magfile ng ITR but mostly ung 2316 mo ang magiging proof(kung iisang employer ka lnag within the year). Let me reserach on this para mas malinaw 🙂
Thanks for asking.
Hi nakapagfile na ako g Bir 1700 Last April 13. Pwede pa ba i amend un? o mapababa kase Its aroind 15k.
Hi Jayson,
Pwede naman but I am not sure kung kelan or if you have ticked mark some other boxes(I need to check on this though). As for the “mapababa” you need to consult a BIR accredited CPA that has a wide and sound experience on managing your taxes. Baka in the ned pag sarili mo lng or sa kakaisip kung ano gagawin para mapababa makasuahn ka naman ngtax evasion or dodging 🙂 . Sabi nga “learn the rules and break them” not the other way around.
Hope this helps!
Hi po
Im mhae. I just wanna ask, na AWOL po kasi ako sa past employment ko due to health issues. I just work As a Call Center Agent with that company for 13 days. Do i still need to present an ITR to my present employer? I was able to recieved my salary for 15 days of work (2days absent kaya 13 days lang working days ko dun) after non d na ako nakabalik sa trabaho. Kukuha paba ng ITR or ok na hindi since days lang naman
Thank you in advanced for answering my queries.
Hi elma092212,
Mas maganda kung may makukuha kang 2316(ITR), usually hahanapan ka ng bago mong employer. If sumoweldo ka sa former employer dapat issuehan ka pa din…medyo pahirapan nga lng kasi alam mo na mentality pag nagAwol ka but sana inexplain mo ung dahilan due to health reason or sana nagreport ka na may sakit ka para di ka awol. If you really cant get one pakiusapan mo na lng ung next employer but since awol medyo bad record un on your part.
I hhope this helps elma092212
Thank you for the quick response , what if i will not declare it since it’s just days and 1pay out only ? What will happen ?
I have a question sir, I already have a TIN number. I changed my employer a month ago and i haven’t updated my registration yet. Do I still need to pay my taxes if I will not update my registration? What are the consequences? Thank you.
Hi Jae,
You still need to pay your tax even if you change employer and have updated your registration(by this do you mean change in RDO, change in tax type, etc). Paying your tax is your own decision, if you don’t pay it you might be caught and be charged with tax evasion. Question though, does your new employer treat you as an employee in an employer-employee relationship? If it does then they should have asks you to update your records to their RDO. That way they can report the tax withholding they take out from you when you get your paycheck. Withholding tax is actually you paying tax in advance so if you check your payslip and there is a WTAX deducted then you actually paid tax and it is now a matter how are you going to report it to the BIR by April 15 next year.
Hope this clarifies your questions Jae, if you need further tax advice seek the help of a BIR accredited tax agent CPA or a tax lawyer. I am not both(still working on the BIR accreditation though 😉 )so don’t 100% rely on my advices. Seek professional and accredited help or advice from the experts and accredited CPAs, lawyers, and RFP
Thank you for your quick response and advice sir.
question lang sir d ko p kc na aupdate tin q my baby nq isa pnanganak sya sept 2013 hnggang ngun S pdin aq. kpag in update q b xa to S1 my makukuha ba ako refund employed ako now at kung meron dapat b backdated yung refund o irrefund lng nla yung ngayong taon. thnks
Hi maldena,
You have a very good question! But I am not sure if alam ko ung sagot :). Kasi sabi mo 2013 ka nagkababay but never mo update from Single to Single with 1 dependent. Also by that you mean you have work in 2013, 2014, at ngaun. For this year maadjust sya since at the end of the year iaadjust this kung machchange mo this year. Ang concept kasi ng change in status ay consider na nagchange ka for the whole year. For the past two years di ko alam kung papano specially if you have changed employers.. medyo matrabaho. If you would claim it siguro baka ung employer mo kaw na paghadlehin nyan kasi ang mangyayari is magaamend ka ng mga nafile. Personally wala pa ako nakitang case na ganito. you might ask your current employer to help you out on this. Magrerecompute ka kung ilna ba ang difference pag S1 ka.. now ang tanong is Malaki ba ung difference difference kung sakali magcompute ka? kung hindi gaano maybe it would be more practical to just have it effect this year only instead of going to all the trouble going back and forth sa BIR and even maybe your old employers. But again that is your choice… syempre kung Malaki dapat pursue mo benefit mo un as agood taxpayer of the Philippines 🙂
Again this is just my opinion. I am not a BIR accredited taxagent CPA nor a tax lawyer. Should you need further expert assistance please look for a BIR accredited taxagent CPA or a lawyer.
Hope this helps maldena 🙂
Hi maldena,
Nagresearch ako at nagbasa ng BIR revenue memorandum and other amendments. So far ang nabasa ko ay sinasabi na di na sya marerefund due to tax payer’s negligence and the difference is to the benefit of the government. NAkalagay kasi na ang requirement is to file within 10days ng change in status sa BIR para bigyan ka ng certificate na ibibigay sa employer to follow such change in status. So I guess for your case this year lng talaga ang maclaclaim mo kung nagfile ka ng change in status. Ung amendment will apply mostly to businesses and self-employed.
I hope this helps.
thank you sir. inaayos KO n sya ngun nkausap ko nadin hr nmin ang ibibigay lang daw nilang adjustment etong year pero yung 2013 & 2014 wala na. Thank u sa information.
Hi Friendly CPA (kasi free) ^_^
Sir, I commend you for your effort in answering all the queries here in your blog. Hmm and the way you answer is very awesome! (masigasig na, matiyaga pa).
I also have a confusion and some sort of discomfort about taxation. Let me further illustrate:
Year 2008, I got employed sa isang private company. Since it was my first job, I received TIN ID and 2316 from them. It was very smooth and convenient. At that time, I didn’t realize how my 2316 and TIN will impact me these days. March 30, 2013 was my last day with this company and I could not recall if I was issued 2316 for 2012 (or I misplaced it). Again, I had no idea how important it was. If I am not mistaken, annual income is less than Php 120, 000.
April 1, 2013, I signed a contract with a new company (GOCC). In this case, it’s no employer-employee relationship status. The company did not require me to give 2316. Instead, they just asked my TIN number. April 2015, I wanted to travel overseas so I needed an ITR as a requirement. I requested one from the Finance Division of my company and gave me 2307 instead of my request ‘2316’. At first, I wondered why ..so I did my research and found out that it’s because of the no employer-employee relationship status, I belong to the self-employed category. Honestly, I did not know I should file my own ITR before April 15 because I previously, my employer did it all for me. Also, it was too late because my travel period was April 9-20, I couldn’t meet the deadline. Good thing, the embassy accepted my 2307 and granted me visa.
However, I did not stop thinking about this situation even after my overseas travel. I want to do it properly. So could you please guide me on this?
a. I only have one TIN. I have my TIN ID with me
b. I have the latest 2316 year 2010 only
c. My previous employer’s RDO is 008
d. My current employer’s RDO is ____
e. I have requested 2307 from finance division so I have 2307 from January 2014 to July 2015.
Is it possible not to file the 2014 anymore? (when I go change RDO)? Please advise. It’s August 2015. I did not file my 1701Q last April 2015 What should I do? Can I just fill up the 1701 directly in December without the 1701Q?
Hoping for your sound advise.
Pines
Hi Pines,
You have a very long case here… I suggest you seek the service of a BIR accredited CPA or a tax lawyer( seriously but of course I will try to answer what I can 🙂 )
1. Definitely you need to go to BIR and file for change of taxpayer type(employee to self-employed) and and as for your RDO change it to your place of practice or your residence.
2. As for your 2014 1701, I guess the best way for you to do is to coordinate with your Finance Dept. GOCC yan so dapat alam nila kung papaano ang dapat gawin(I am wondering why they didn’t inform you about it). I am not sure how much will be the fine or if ever BIR will forgive you since the mistake only is you not filing. The correct tax is already deducted by your GOCC employer. There are some special arrangement na nabasa ko dati where contractor/self-employed consultants does not need to file their quarterly tax filing as long as the withholding client declares it that consultant has availed such(again I am not a BIR accredited CPA so better yet find one who knows more about this).
3.Just be honest with the BIR(sana walang mga kutong kung saan ka man magpapahcange ng RDO) Just approach and inquire for your situation. Some personnel will be helpful and some are the grumpy types. Always save your 2307 these area important part for your quarterly & annual filing.
I will have to research more on your case. I will post again and as always seek help from a BIR accredited CPA or a tax lawyer(I am still working on my accreditation, I need to relearn lots of new tax laws and guidelines after being away from Philippines for 6 years)
I started working Aug 2013, then came the 15th April 2014 which is the season for the filing of ITR. Pero since, private company ako walang naging hassle dahil sila ang nagpafile.
Oct 2014 nagresign ako, kasama sa last pay docs ko is yung 2316 then nag start ako ng work sa bagong company by November 2014. This time as contractual. Sabi nila hindi daw si company ang magpafile na ITR namin since contractual kami. Pero hindi ko pa rin sya naifile ng April 15.
Until now di ko pa rin naifile. Kung ipafile ko po sya ang computation is yung total compensation ko sa 2316 from my previous employer and yung 2307 ng Nov and Dec sa present employer ko?
Then yung penalty, i-aadd ko na lang sa tax payable ko? Pero since tax refund ako ileless ko na lang po ba dun sa tax refund ko? O babayaran ko po ba yun ng cash pag nagfile ako?
At pano po kung di ako makapagfile ngayon, makakaapekto po ba yun sa next filing ko??
thank you po 🙂
Hi cha,
Apologize late na ung reply ko. Just to clarify, ano ibig mo sabihin sa “tax refund ako”? Kasi if your gross income (total earned for the past year) does not exceed your total personal and additional exemptions you are not required to file an ITR. If this is galing dun sa 2316 mo dapat naadjust na nila un bago ka huling pasweldohin. But if may tax refund ka dahil may error between the tax withheld against your tax due then you still need to file. You can check this article if nagpofall ka sa namention ko. http://www.rappler.com/business/211-governance/89208-askthetaxwhiz-income-tax-return-filing-part-1
But in case you need to file you need to use Form 1701(click here) since you are now mixed income taxpayer. You need both your 2316 and 2307 and transfer the data to the appropriate boxes. So you need to indicate your gross income from compensation and from your contractual job(which makes you a contractor or self-employed taxpayer) and also in the appropriate boxes you need to indicate the taxes withheld coming from your 2316 and 2307. As for the penalties and surcharges may box then for that. You need to input it there as well. So kung ganun kung mas malaki pa din ung refund mo kaysa sa penalties mo maaring wala ka ng babayaran pang additional.
If hindi ka magfile for the year 2014(na dapat nafile noong April 15, 2015) at still you are contractual working as a self-employed malamang mahuli ka ng BIR since as a self-employed dapat nagfile ka na ng change in tax type from employee to self-employed. Also if you are now a self-employed may mga documentations ka na dapat ginagawa like books of accounts, receipts, etc, unless there is an exception as per BIR rulings. (I read some contractual na may ginawang arrangement as per BIR ruling between them and the employer na dinededuct na din nila ung monthly and quaterly paymenst na dapat gawiun ng contractual/contractor but I dont know kung anong regulation un).
Hope this helps cha!
Pano pong naadjust bago huling paswelduhin? Ang ginawa ko po kasing computation is yung total compensation income from 2316 and 2307 less (40% for OSD) less 50,000 equals taxable net income. then tax due less tax withheld (from 2316 and 2307) equals income tax payable (which is negative po in my case) tama po ba??
magpafile na po ako this november 🙂 okay lang po kaya yun kahit ganun ka-late? ipapalipat ko na rin po yung RDO ko (sa lipa po kasi dati eh sa makati na po ako nagwowork ngayon kaya di rin po ako nakapagfile dati) then magpatransfer na din po ako to self-employed taxpayer?
Thank you so much Sir 🙂 you’re such a big help!!
Hi Cha,
I thought ung reason bakit ka refund is dahil hindi tama ung sa deduction sa employment mo, sorry about that. Hirap talaga pag konti info/details. Mukhang trama naman ung computatin mo but if you dont feel okay asks a CPA friend na BIR accredited. Hindi ok na late filing ka na…siguradong may penalties and charges ka na but at least you filed bago pa lumubo nag penalties and charges kadalasan kasi un ang dahilan kaya minsan mas malaki pa ang penalties and charges kasi di binayaran agad.
Hope you can straighten out your tax issues cha. Good luck and thank you!
Sir, thank you for your immediate response! and for free consultation 😀
Ask ko lang po if nag change ako ng status from single to married with 3 dependents, april 2014 ako nahire then at the end of the year nagka tax refund ako. Single pa rin ang tax status until august 2015. ngaung september 2015 Married with 3 dependent na ang status ko. magkakaroon ba ako ng tax refund at the end of the year or wala?
Hi Jem,
Sensya na medyuo naguluhan ako :). SO naging married ka ta with 3 dependents as of Sept 2015? Triplets anak mo? Just kidding, but I need to clarify that. So naging married with 3 dependents ang status mo as of September 2015. As per our tax laws benefit inures to the account of the taxpayer, penalties is to the benefit of the goverment. SInce nagchange ka ng status you are considered as married and with 3 dependents for the whole 2015. Malamang may tax refund ka but depende pa don yan sa laki ng kinita mo at kung may pinile kang change of status sa BIR(form 2316 ata un, not really sire on this need to research).
I hope this helps Jem
Hi I have a question 🙂 Kasi last2012 nag work ako and then after 8 months nag AWOL na ako, magkakaproblema ba ako sa taxes? I mean may mga kailangan pa ba ako bayaran? Or wala naman kasi after that wala na naman akong work kasi nag aral na ako. Hehe napasip lang ako kasi ipapasok ko yung sasakyan ko sa Uber, they need Certificate of TIN Registration lang naman.
Hi Pia,
Kung nadeductkan ka naman ng taxes noon nagwowork ka pa at I assume pinile ka na lng as substituted filing din there will be no more problem. As for you needing TIN registration certificate you need to go to BIR and change your employee TIN into a business or self-employed type. Since dapat may TIN ka na baka hanapan ka ng form 2316 as proof na may TIN ka na dati na ipapaconvert mo ito business/self-employed type. Since I assume wala ka form 2316, you have to go to BIR and check your TIN at kung san ka nakaregister para iayos mo naman like conversion nga from employee to business and then to tansfer to your home RDO. SInce business ka na you need to file as a business.. kukuha ka permits, certificate of regsitration annually na 500pesos pa ata, books of accounts, receipts etc… depende kung what kind of business…
Hope this helps Pia
Hi goodmorning,
Paano ba ang computation ng yearly tax due ng employee? Sa part ko kasi nanganak ako ng dec 19 ,2014 …start na yun ng maternity leave ko hanggang Feb 13, 2015… On that duration january to feb 15 payout wala ako salary so wala ako withheld tax that months…
Kasama ba yun sa computation? Paano ba magcompute
HI Margel,
So basically ung 2014 tax mo ay hanggang sa Dec 19 ng tapos pwede mo iclaim na dependent ung baging anak mo(basta bat within pa sa allowed number of claimbale dependents na 4). ung Jan - Feb sa sususnod na yan na taon wala syang connect sa 2014. If employee ka at isan lng ang employer mo dapat naadjust na nila yan tax mo except if di mo pa nasubmit mga requirements so I believe on the part ng employer mo di pa nila count ung baging baby mo as dependent hanggat nagsusubmit ka ng NSO birth certificate ata. So I assume na for taxable year 2014 total salary mo uo to Dec 19 minus your usual allowable deduction. IN case mya adjustment kasi may mga documents ka na na required malamang sa 2015 na yan icocompute ng employer mo.
In case you need further guidance seek a BIR accredited CPA tax practitioner who has moreknowledge on this. Ask mo din HR/Payroll department mo para mapaliwanag nila at kung may mali sila at least pwede mo icorrect sa taxable year 2015.
Hope this helps Margel.
hi there louis! I was just thinking if you could send me some samples of how to compute the part VI Computation of tax (it’s in the 1700 BIR form). Sample computations like a situation already. If you know what I mean hehe Thanks! Hope you would response before tomorrow comes 🙂 Thank you again.
Hi darahkim27,
That part of form 1700 is very straight forward so what kind of situation would like me to show as an example? basically tax computation is:
Gross compensation income
less: non-taxable income
equals: TGross income
less:Allowed Premium health insurance(if you have any that is allowable)
less: Personal exemption
less: additional exemption(if you have children you can claim for additional deduction)
EQUALS: Net Taxable compensation income
add: other income(non-business/non-professional)
Equals: Total taxable income
TO compute your tax due:
Total TAxable income
multiplied by applicable rate(5-32% base on the bracket)
Equals: Total tax due
Less: Tax withhled
less: Tax credits
Equals: Net tax due and still payable
Maybe you are confuse due to the two columns(tax filer and Spouse). In the Philippines married taxpayers usually consolidate this the two columns. If not just fill up the column for the tax filer.
NOw if you have further questions about this due to the complex nature of your income source I suggest you seek the help of a BIR accredit CPA tax practitioner. Question like what you can further deduct if you are a foreigner working here in the Philippines but considered as resident filer. Or maybe you have credits and you need how and which ones can you use for your income tax filing.
I hope this helps darakim27. Its too broad to give an example with the tax bracket and and how much the salary would be so I just gave you the skeletal computation. I am not sure if the online version of the form actually computes(I haven’t tried it myself yet).
Hello po sir louise, kumukuha po kasi ako ng housing loan tapos ang requirements are business permit dti and itr with audited financial statement 2 years, so inaaply ko kaagad business namin sa dti at sa business permit, ang prob ko ngayoun sa dti kung i reregister ko ba ng new business sa dti ang business namin makaka kuha ba ako ng itr with audited financial statement 2 yrs. thanks in advance po
HI! Louis. I have took a life insurance policy with a health insurance rider on it. My annual premium is 200K a year. On Form 1700, can my premium be less to my gross compensation :
less:Allowed Premium health insurance(if you have any that is allowable)
the premium is for my retirement and health insurance It is a variable Unit-Link investment insurance.
I was hoping this will subtract to my gross compensation.
I am correct or wrong?
Thank you.
Hi Homer. Yes you can deduct any premium payment for health or hospitalization insuarnce so long as it it 200 per month for the 12 month covered by the ITR you are filing(200 x 12 = 2,400 max dedcutible) and that your earnings subject to tax is no more than 250k. So in reality its too small but still a deductible to your gross income though.
Hope this helps Homer.
Hi Louis! pede ba ako magtanong? Please? 🙂 tuwing kelan po kaya kelangan gumamit ng ‘duly authorized sign of a c.p.a on audited financial statements’ kapag mag file ng i.t.r? At ano po kaya ang gagamitin ko sa itr yun po ba ‘compensation income or business income’ ? Kasi ang business ko po ay commission basis.. Kapag walang benta product wala ako commission in short wala income.
Hi Ivy,
Check mo itong link http://taxacctgcenter.org/bir-audited-financial-statements-cpa/.
Basically dapat ang magfile with audited FS kung at least one of your gross quarterly sale exceeds 150k. But again just like nung namention ng article you have the option to file under OSD(Optional Standard Deduction check this link on how to http://taxacctgcenter.org/how-to-compute-optional-standard-deductions-osd/) if you are engaged in trade/busines or practice of profesion. In your case dapat mong madetermine kung walang employee-employer relationship to establish na you are in business.
Medyo malwak kais ung topic but I will continue to reserach and let you know if any. Also would like to invite other readers to comment if you have an idea or if you have experienced the same scenario the same as Ivy.
Hi Sir Louis,
Magtatanong lang po ako regarding sa BIR FORM 2316 kasi hinihingan po ako ng bago kong employer ng form na to. Eh pano po yun? Contractual lang po kasi ako sa previous work ko which is a government institution. So wala pong kaltas yung sahod ko. Kung ano po ung indicated sa contract ko yun po ang buong nakukuha ko. Wala pong tax na kinakaltas.
Pero po pinagfill-up po ako dati ng BIR Form (diko po tanda ung Form No.) para po makakuha ako ng TIN number kasi po kailangan ng TIN number para sa application ng ATM card. Sa ATM card po kasi ipinapasok ang sahod namin.
Kelangan ko rin po bang mag file ng ITR? Makakakuha po ba ako ng Form 2316 sa previous employer ko?
Thank you po.
Good day!
I forgot to file my ITR for the year 2014. What will be the process of late filing? I am under the same employer though.
Thank you.
Hi Fred,
Did your employer inform you that you need to file your income tax or they gave you form 2316? Normally if you are just employes by one employer the employer have the option to file under substituted filing.
Ask your HR first, if not then you have to file like any normal filingbut you have to indicate that it is a late filing and be ready for the penalties.
Hope this helped Fred.
Hi! Just wanna ask if part timers have to pay tax? 4-5k a month..thanks. My friend works as a part time for 4months (4-5k) and then had her fulltime for 8months (6000 as basic pay and 2500 as an allowance= 8500/monthly (mon - Fri) …if we compute her tax do we need to compute the whole year income or just the 8 months. Thanks..
Hi Joanan,
As per the tax law all who earn income need to file ITR with of course some exemption. An ITR is an annual basis so it should be the whole 12 months of income earned. NOw the question will be if she is within the MWE(Minimum Wage Earner) category. If so she might not need to file ITR. Also if she has only work for one employer and fulfills all the requirement for substituted filling there is no need for her to file an ITR. Again I am not a BIR accredited CPA and my answers are only base on what I know. Hope this helps Joana.
Hello po.. ask ko lang po nagwork po ako year 1999-2000 tin nabigyan ako ng tin no. at single pa po ako nun… after that wala na po kung work, ngayon married na po ko at want ko iregister ung business ko sa same tin no. ang tanong ko po wala naman po magiging problema at wala po kung babayarang penalties sa bir pag ing register..ung business ko po kakaopen lang march 1 po…kasi po 15 years walang akong binabayarang tax kasi wala naman po ko work….thanks sa reply
Hi Sie,
Wala naman problem. All you have to d is to go to BIR and update your TIN. Question though, san mo nakuha ung TIN mo dati? Importante un kasi dun mo sya iuupdate like kung employee tapos magchchange to self-employed, tapos kung san na ung bagong RDO ng business mo since malamang sa ibang RDO sakop ung business mo. Try to gather all the beeded docs na mayron ka like ung dating payslips mo to show the TIN you are under, BIR forms na nafile mo, at maybe pati marriage license mo to change from single to married. Para pagpunta mo sa BIR madali mo syang mauupdate kung nakaready na ung required docs sakali.
Hope this helps Sie.
Hi louis! may sources of income are from compensation and commission, I have 2316 and 2307 from the sources companies, so Im planning to file ITR ( 1701) but according to my friend cover lang ako under 1700 because hindi ako registered sa BIR as trade or business at wala ako C.O.R.
pwede po bang iclarify ito, kasi nag file na ako before under 1701. salamat po.
Hi ritchie, yup tama ubg friend mo regarding sa business side. Ang tanong ko lbg bakit hindi naclarify sayo ng nagbabayad ng commission regarding your tax classification 2307 pa naman bonibigay sayo dapat hanapan ka ng COR. But again there are some gray areas as well for the people who earn commission. Dapat din ung TIN mo is a mixed income type. Let me check further on this as well.also want to ask other CPA and tax practitioners na nakakabasa sa comments to add ur inputs as well.
Hope this helps ritchie
HI louis . May i ask if you know the procedure for amending 2316 submitted. My employer has wrongly indicated my TIN number thus, I have to or they have to correct it. But seems that they dont have an idea on how to do that, that’s why I’m helping them since deadline for filing is coming. Thanks a lot in advance for your help, may God bless you more with your advocacy….
Hi Zen, to tell yoi the truthI also dont know.I am researching it though. My question though is how come they made a miayakw on your TIN?Are they filing manually? Also of the problem.is your TIN then what thwy could do is fill up a revisws 2316 and have it received by the RDO where they should be filing. Will there be penalty? Maybe but if it was not your fault that is you gave them your correct TIN then you shouldnt be inconvenience by rheir actions. They should submit right away revised 2316 and give you a copy before the filing deadline if you are filing your own ITR. Hope this helps Zen.
thank you very much louis, you were very helpful and prompt… more blessings for you…
Hello Louis, I have a lot in mind about taxes right now, but for now, I want to know if the 2307 given to me by the company is also submitted by the company to BIR? I am a contractor now and didn’t know about the 2307s, I just keep accepting them and thought they were filing taxes in behalf of me. Because I just need an ITR now for visa purpose, that is why I was checking on my documents and only found a bunch of 2307s..I was an employee before and the company that got me now said that even though I have no benefits I will only be charged 2% tax. I thought that was the equalizer for having no benefits. But now I know better :(. I would like to file now for 2015, hopefully they won’t wonder in regards with my 2014. Which is why I am asking if the company submits the 2307 as well.
Hi disturbed, yes 2307 is submitted by the withholding company as part of their duty as withholding agents. I dont quite remember the name of the form a withholding company files with the BIR I think its 1601E. Well if you are just filing for 2015 just hope they wont ask about 2014 or else you will pay surcharges and penalties. Hope this answers your question disturbed.
thank you for your reply! very much appreciated
Hello louise
Ask ko lang sna about sa itr,my business kc ako mjo ala akong gaanung alam about sa itr. tanung ko lang kung kailangan ko pa bng mag file ng itr ko kahit nagbabayad ako ng monthly at quarterly ko? Sna masagot mu agad kc hanggang aprika 15 nlang pla ung pagfile.
Hi Maricel, yes kailangan pa din kasi ung mga monthly at quarterly ay mga interim filing lamang. You need to file an itr for the annual computation, malay mo sobra pala naibayad mo baka may tax credit ka pa ma pwede mo maapply next tax calendar year. Hope this helps Maricel.
Hi louise,
I have a friend who just retired last april 2015 from a company then became a consultant after. He is filing his itr for 2015. Is audited fs necessary if he has a gross income of 2M?
Hi Joan,
Really sorry for the late reply. Been busy with my day job. Anyways, the basic test is if any of the quarterly sale/receipts exceeds 150k then aside from keeping of books, financial statement should be audited by an accredited CPA. But he can opt for the OSD(optional standard Deduction) which will not require an audited FS but need to comply with the OSD requirement and the expenses he can claim are only what is allowed under the OSD.
check these links for more info: http://taxacctgcenter.org/bir-audited-financial-statements-cpa/
http://www.bworldonline.com/content.php?section=Economy&title=when-choosing-osd-becomes-crucial&id=87317
hello louis…
can u help me with my problem.? isa po akong baguhan
medyo complicated ito….pero naniniwala ako na kayang kaya mo ito e.explain
isa akong researcher sa isang universty..pero contractual lang. meaning no employer/employee relationship. at the same time, isa din akong Agricultural engineer
November 2014 ako nagstart sa work pero hindi ako nagfile ng tax kasi hanggang December 2014 lang ang contract ko.
noong January, i signed another contract from January - June (same employer). Then i was told by my boss na magprocess sa BIR kasi hindi dw ako makakatangap ng sweldo for the month of February pag walang COR or certificate of registration from BIR
February 27, 2015, nakuha ko na ang COR ko…ang line of business ko ay “7421 Architechtural, ENgineering Activities, Consultancy.
Every month sa tuwing pinaprocess sweldo namin doon sa ADMIN ng university namin, hinahanapan kami ng Form 2307… doon sa form 2307, pinapakaltas sa amin ang INcome payment subject to expanding witholding tax 10% at Government Money payment subject to witholding of business tax 3%.
meaning, nagsusubmit ako ng 2307 sa university monthly, at nagpaprocess ako ng quarter doon sa BIR malapit samin….i will just collect ang lahat na 2307 na nasubmit ko sa University…tapos nagfifile ako ng quarter sa BIR
15000 lang sweldo ko…minus 10% (1500) at 3% (450) sa tax….s0 13,050 nalng natitira sa sweldo ko every month.
and this is the problem:
January - March 2015 at April to JUne 2015, nakafile ako ng monthly 2307 doon sa university…at nakafile din ako ng quarter sa BIR
Pero noong 3rd quarter, JUly - September 2015, hindi na ako nakafile ng quarter sa BIR kasi hindi na tinanggap kasi 2days late na. Pero yung Montly 2307 ko, every month ako nagfifile sa University kasi requiremetn un sa sweldo namin..at doon din sila nagkakaltas sa sweldo namin.
at kahapon APril 15, deadline ng Annual at 1st Quarter 2016,…unfurtunately, hindi ako naka file kasi nabusy ako sa office for the past days.
Question:
anu kaya ang mga parusa sakin?
one last thing….kumuha pala ako ng RESIBO under my Name as Engineer… kasi may mga sideline ako as engineer. Juy 13, 2015 na release yung resibo ko galing sa BIR.
nakapagparesibo na ako ng apat na beses…pero hindi ko pa na.declare sa BIR ang mga income ko….
Thats all…Sana malinawagan mo ako at mabigyan ng advise what to do…maraming salamat.
Hi nathan, naguluhan ako sa problem mo ;), anong university yan at parang may mali silang ginagawa. That is sila dapat gumagawa ng form 2307 at sila dapat magbibigay sayo un kasi sila ang nagbabayad sayo ng income. Sila ang dapat magremit ng kinaltasna tax sayo. So hindi ko gets bakit ikaw ang gumagawang form 2307 at sinasubmit mo pa sa kanila. Di ko din gets bakit hindi ito nakita bg BIR dyan? Kanino bang TIN ang nakalagay sa form na payor or ung nagbayad sa iyo, pag ung TIN mo mala na naman un dapat ung TIN ng university. Anyways read this article para maintindihan mo kung papaano magwork ang 2307. Better yet ask a CPA friend to enlighten you on this. Ito pala ung link http://taxacctgcenter.org/creditable-withholding-tax-certificate-in-the-philippines/
Salamat sir for immediate response…
VSU po kami..sa Leyte…
Actually…medyu nagkagulo po dito last year dahil sa tax…thats y…pumunta po sa University namin ang BIR at pinatawag lahat ng contractual employees para mag.explain at mgresolve sa problem…
Ang resulta, We agreed na mgsusubmit kami ng 2307 evry month sa universyt indicating na nagpapadeduct kami ng 10% at 3%… pumayag nadin kami kaysa evry month kaming pupunta sa BIR para magprocess sa 2307
Bali TIN po namin ang nakalagay…
Ang concern ko lng po ay yung mga penalties sa mga due date na hindi ako nakapagfile…at yung sideline income ko na hindi ko pa nadeclare sa BIR…
Anu ba dapat kong gawin?
Maraming salamat sa pag.unawa at pagtulong
hello louis…
kaya pala wala ka pang reply sa sagot ko sa comment mo..dahil hindi pala na send sayo…hahaha..
anyway. we are from VSU Leyte. Actually, medyo nagkagulo dto last year dahil sa tax… Our University invited BIR para mag.explain at magresolve nga problems regarding sa tax. after the said meeting, we booth agreed na everytime na magproprocess kami ng sweldo namin montly, ay mag.aatach kami ng 2307. TIN namin nakalagay sa form…hindi sa university. doon sa 2307, we indicate na nagpapakaltas kami ng 10% at 3%… bali magkakaltas galing sa sweldo namin ng 10% at 3%. Tapos every quarter, kino.collect namin ang mga 2307 form na kasali sa quarter nayon…at pupunta kami sa BIR para mag.process ng quarter.
sa aking part, wala na akong nababayaran sa BIR sa tuwing nagproprocess ako ng quarter kasi malalaki ang nababayarn ko sa monthly 2307.
ang aking concern lang…is yung mga quarter at annual na hindi ako nakapagfile..bali anu ba mangyayri doon? at ano ang dapat kung gawin?
at dagdag na problem ko pa ..ay yung sideline ko…nagpagawa kasi ako ng resibo under my name…kasi may mga costumer ako sa aking engineering works na humingi nga resibo… 4 times na ako nag.issue ng resibo sa mga customer ko…tanong ko lang kung ano dapat ko gawin kasi hindi ko pa nadeclare sa BIR na may mga sideline ako.
thats all…maraming salamat sa sawang pag.intindi at pag.explain.
mabuhay ka!
Hi nathan, sensya na sa celfon lng ako may access kaya hindi ko maresearch. Sa mga nakalipas na di mo nafile pwede ka magfile ng amendment.sa sideline naman nakaregister ba ito as sole proprietorship? Kung sakop pa din un sa taxable year na ito pwede mo pa isama pero again magfile ka ulit ng amendment. Wala ako sa position to advise ka ng tamang way, better consult a xpa friend na alam kung papano sya ififile as amendment.medyo complikado nga ung situation nyo. May mga cpa naman dyan sa mga teachers dyan. Ask mo sila para libre. Most would suggest na wag mo na lng ideclare kung nakaraang tax year na sya or kung nakaligtaan talaga kasi may penalty at surcharge pa. So advice talaga is consukt a cpa na may alam sa tax para makita nya kung kailangan pa bang magfile talaga. Hope this helps.
P.S. di ko talaga matanggap bakit pumayag ung BiR dyan na ung binabayaran ang gagawa ng 2307, dapat ung nagbayad ang dapat.
maraming..salamat Louis…it really helps. highly appreciated.
No worries Nathan
Hi Louis,
I hope you don’t mind if you can help me out here with your expertise .
I have a situation here:
I resigned with my previous company on October 2015 and got hired by another the same month .
part of the requirement of my new employer is to pass our 2316 on or before November 2015 so they can file our ITR. Now, my previous employer advised us that our 2316 will be released 2 months after I resigned with my last pay , so, I was able to get my 2316 by December. Now, when I informed my HR on my current employer about the situation they advised us that we would have to personally apply our 1700 to BIR personally.
Our company is here in Cebu but our RDO is in Taguig as it was assigned to us. When I went to BIR between last week of February to 3rd week of March to process my ITR and inquire on how to pay, they informed me that we need to pay our ITR to where our RDO is (which is in Taguig) , I’ve been asking BIR if there is another way for us to pay it here in Cebu, they advised us that the only way was through Taguig since that is where our RDO was assigned.
I tried to Inquire to the Authorized Agent Banks here in Cebu if they can accept the payment and according to them, no- since they were assigned with different RDO code.
when I raised this concern to my HR , they kept on insisting that we should be the one to process it, I reasoned out the information that I gathered from BIR and Authorized Agent Banks and they informed me that they’ll have to look into this, until such time that the deadline already passed.
When I researched about ITR’s , I stumbled upon their ruling on “substitute” filing, Louis, Questions:
1. The processing of ITR’s / filing of 1700 isn’t it suppose to be my employers responsibility ? Do they have the right to pass the responsibility to process it to their employees?
2. when I check the BIR ruling , I saw somewhere that companies have until Feb of next calendar year to
process 2316 (is this correct?) does this include the 1700 form filing?
3. Do employees have any right to file a complaint to BIR or Labor incases when the employer do not want to process or shoulder any penalty that incurred due to late filing of ITR>
Hi John,
First of all I just would life to disclaim that I am not a BIR accredited taxagent and that what I have said on my blog are my personal opinions based on what I know so far. This is juts to make things clear so if you really need expert advise seek a BIR accredited CPA or a tax lawyer.
Okay let me answre your quesries to the best of my abilities and knowledge.
1. Yes they have the right to pass it to their employees if the employee is not qualified under substituted filling. Substituted filling is only for employee who is employed with one employer for the whole calendar year which in your case is not thus the current employer is not obligated to file your ITR but only to give your 2316 covering Nov to Dec 2015 to be given to the employee on or before Feb 2016. In case for those who resigned within the year the obligation of the employer is to give you 2316 is on the day of last payment is made(which is kinda tricky here need to research this further).
2. Yep you are right again if you comply with what I said in number 1. If you are under the substituted filing there is no need to file 1700 since the fact that you are under the “SUBSTITUTED” filing means that has been a substitute for the filing of 1700 and your BIR form 2316 is now your filed ITR per se. Thus you need to save that and give a copy of that when you are asks for an ITR or form 1700.
3. It depends if there is of course grounds for your complaint. Now I dont know why you are in Cebu but your RDO is in Taguig. That is quite baffling. The only issue I believe for such to happen is if your new employer is a Large Tax Payer which will have a different RDO form your location. Usually RDO is assigned by location.
To answer also your question, we need to know what is the basis for the counting for the “last pay” as mentioned earlier. I am in a gray with the term if it means last pay as in the covered working day or last pay taht is the date it is released which in your case is 2 months from your resignation date.
As for the filing. Not sure for what reason why you want to guarantee that you filed your income tax but in most cases for employees, the income tax should always be equal to the tax withheld thus it should be zero tax payable and the issue you will have is just a matter of filing it. Again if you need to show an ITR then your 2316 acts as your ITR so you can use the October 2316 as our latest ITR. If you need it so then you can argue with the BIR that your former employer has not yet release the 2316 needed to support our 1700 that you have yet to file. But again we need to know why your RDO is in Taguig but you are actually in Cebu because you can use that argument as impractical to the taxpayer.
Hope this helps John.
Hi John, found this site regarding the issue of final pay. As it says there are no clear mentioned even in the labor code when should be the final pay but again it indicates that reasonable would be on the next pay period. In my employer it is usually 30 days after all clearances are made so I am not sure why it took 2 months if I assume you all did the clearance procedures upon filing your letter of resignation.
http://tucp.org.ph/2010/07/resigned-employee%E2%80%99s-last-salary-must-be-given-within-reasonable-time/
Thanks Louis, you’ve been great help. I guess I’ll need to find another way for me to pay my tax, I’ve already incurred a penalty. besides the 20% and 25% penalties, do I also incur other penalties? I heard from one of my colleagues , there is a “3rd penalty” that BIR would add, do you have any idea about this ?
Hi John Carlo sorry for the late reply. Will research this. Just been busy lately.
Hi sir Louis..mag uumpisa pa lng kmi ng business…tanong ko lng po kng saan ako mag fifile ng rfp.kailangan ko p bang bumalik sa rdo ko..para mag file ng rfp bago mag bayad sa authorized bank.thnks po
Hi Bec,
Sensya na, what do you mean by rfp?
Hi Sir Louis,
Is tax shield illegal? Like my company is giving me low 16k as basic salary and 5k allowance. I hope di illegal sa phils.
Hi Tinybubbles,
Apologies for the late reply to your query, medyo busy with task sa Dream Do Defy at Idea School book promotion 🙂 if interested in real estate check out http://myideaschool.com/product/no-money-down-formula-in-real-estate-deals-hard-copy/
now sa tanong mo. Tax shield is not illegal, what is illegal is tax avoidance. Tax shield is like shifting things for a better position. So in your example, what is done is they give you smaller basic but a bigger allowance which may be put under the de minimis which is non-taxable on your side at the same time they can claim it as additional allowable deduction para sa income tax ng company(just an example). Always make sure that the deductions na kiniclaim are allowable deduction. Kasi pag hindi isa na ung tax avoidance.
Hope this answers your question Tinybubbles.
Hi good morning sir Louis,
Ask q lng po,
I received 2 salary from my employee at my small business(Avon).dapat po ba mgchage status ako from employed- self employed.. Ngstart po aqng mkareceive nang service fee sa Avon from April then ngregister AQ sa biR last sept..include q na din bang babayaran ang April..paanu po cya ifafile.
Thank you.hoping for your reply ..confused po talaga..
Yes Evangeline. Since ung isang source ng income mo is not from employee-employee relationship. Since isa ka ng self-employed, ikaw na magpafile ng sarili mo Income Tax which is usually due on the 15 of APRIL after ng taxable year(so if ung taxable year mo is 2015, deadline to file is April 15, 2016). One question I have is kung ano setup mo under sa AVON. I am not quite familiar if you are setup as an agent, kasi sa mga agent na kilala ko usually sa real estate is that they have to register as a sole proprietor as a contractor thus ung fully requiremenst ng BIR na books and OR is required. There was also a comment I read that if simple agent, they have some type of arrangement where the company they are working for as ang agent rmeist the withhlding tax on the commission payment and as just like in employment they indicate that such was already deducted and thus the agent does not need to do the monthly and quarterly tax filing and payment(again nabasa ko lng po ito, most like BIR would ask you to register as a sole proprietor as an contractor/agent).
I hope this helped Evangeline!
Hi,
Nahired ako sa company last year June 2015, this year palang ako mag change ng status from S to S1 (same company). I have a 6 years old daughter na. May marereceive pa din ba ko na ITR if machange ko yung tax status ko? kahit nakareceive nko ng ITR last year?
Thanks.
Hi Ana,
Pasensya na sa late na reply. Actually ganito ang mangyayari. ung ITR na binigay ng employer mo nung January 2016 ay para sa last year. This year(2016), bibigyan ka pagdating ng January 2017. NOw ano effect nung change of status? Siguraduhin mo lng sa HR nyo na nagawa ung change of status para maadjust ung witholding tax mo para sa taing 2016. But ung sabi mom na bibigyan ka ba ng panibagong ITR dahil nagchange ka ng status? Hindi na kais one is last year S ka pa lng two ung chnage ay magaaply sa year 2016 nga at usually dapat ibigay ng mga employer ung form 216 na acts as an ITR if under ka ng substituted filing.
So sa madaling salita, ang ibibgay sayong ITR is para sa 2016 na regular na dapat matanggap ng empleyado at dapat na nagrereflect na ung chnages na naganap sa year kung saan ito nag-aaply.
I hoe nalinawan ka Ana dito.Salamat po!
hi there, I hope you can help me out since I really have no idea with taxes. I work as an online English teacher, contractor with 10% being subtracted from my salary every month. I am already registered as self employed (BIR) and as I read through the comments and this article, I have to file my taxes before April 15. My question is, how do I get my ITR since I want to apply for a credit card? And as a self employed individual, it was also mentioned that we have to pay monthly, annually and yearly taxes. Can’t this be done yearly? Are all these separate fees? If so, wow…monthly, annually and yearly packs a punch :O
Hi niji,
Being a self-employed means you are now a business itself. Being a business means it is now your responsibility to file and pay your taxes. The 10% deducted to you by your client(yes the one paying you for your services is now your client and not your employer) is actually a withholding tax. Your client should issue you a form(BR form 2307 I think) indicating that they have deducted the 10% withholding tax to their payment to you. Keep those documents because come tax time you will need those in computing your still tax payable from last year. If you are knowledgeable to fill up the BIR form 1701 you will need those documents as supporting documents. If not, you might need the services of a BIR accredited CPA. Also, you might need the help of an accredited CPA to file your month and quarterly BIR filing and payment. Yes this is like a punch but that is the law.
Additional, as a business you can now claim some deductions but again better yet talk to a BIR accredite CPA to explain to you how this works for self-employed/Business owners.
Hope this helps niji.
Hello sir, asking for help! my friend is into online business since aug. 2014, and paid this 2303, 0605, 2551M since the business start, paying 2551M in 2015 & 2016, but didn’t filed any ITR for 2014, 2015 & 2016. question is, is she need to file ITR for 2014 even without income yet? and 2015? does it have penalties? for 2016? i highly appreciated for your response! thank you!
Hi Ednielyn,
She might have penalties, especially if she has any tax to pay for those years. But since you mentioned she has no income yet (so I believe the business is break-even for those years) there is a threshold on when to file an ITR and when to just file an information return. If the net income will fall just like that of a minimum wage earner then I believe there is no need to file(I will try to look for that specific provision in the tax code), but since this is a business it is better to complete the documents and file one if necessary. Better ask the help of a BIR accredited accountant.
Hope this helps ednielyn
Hi,
Gusto ko lang po malaman kung may makukuha po ba akong tax refund kung hindi ko nakumpleto ang fiscal year. I disconnected with the company last 24th of October 2016 and was working with the same company for 7 years.
Thank you!
Hi Joan,
Mostly ung mga employer ang ginagawa sa mga last pay na mid-year ay binabalik lahat ung tax na nadeduct para ung next emoployer na ang bahaalang mag recompute nag tax kasi ung next employer ang magpafile ng ITR mo. Check mo ung last pay mo baka binalik sayo ung mga tax na diniduct nila sayo.
Hope this helps Joan.
Hi!
I just want to ask help regarding my ITR just recently. I was hired February 13, 2016. My Actual Tax Withheld for 2016 is 15,463.19. But my ITR was only 1086.91, This is the ITR that my present employer returned to me. Me and my co-employees need help on how to really calculate our ITR. Thank you.
Hi Noemi,
I apologize for the late reply. As for the question, I am not quite sure because I don’t see the actual ITR. If the actual deduction per biweekly/monthly payroll has a total of 15k then they should refelct that in your ITR. THey have to compute your supposed Tax payable and compare it to the total tax withheld. If the total tax witheld is bigger than the computed tax payable in your ITR then they should issue a tax refund. If the tax payable in yhour ITR is bigger than the 15k then you should be paying additional for your tax. The amount 1k you said that is reflected might be the additional tax that you need to pay or your supposed refund that is why I cant say what it is until I can compare your supposed tax payable against the total actual tax deducted every payroll. If you have a CPA friend or if you can ask the HR, better ask them to explain it to you.
Hope this helps Noemi.
Hi. Confused po ako. Kasi nag-aaply ako online for TIN then natapos ko na yung registration and meron na akong TIN #. Question ko lang maaapektuhan ba yung tax ko if iba yung RDO ko? Sa Legazpi kasi yung RDO ko eh I’m from NCR. Akala ko province talaga yung need na ilagay dun late ko na nakita na NCR pala dapat.
Hi Mel,
Right now hindi naman but you have to update the RDO from Legazpi to the RDO either where are employed or practicing your profession or business.Kasi pag dumating na ung time that you have to file then you have to file to your RDO(Legazpi). Since you did an online application ng TIN you can check ung nearest RDO at explain mo ung nangyari para maintindihan nila at macorrect ung error.
Hope this helps Mel. By the way I hope you dont mind me asking you to check out my YouTube Channel, Investing in Philippines. Pa-subscribe na din po salamat.
Pwede pa bang i-edit yun?
Hi Mel,
Sensya na for the late reply. Ung online once naissue na un na un. The only way to chnage it is to go to the RDO and fill up jung form to make changes. NOt sure kung 1905 ata ung form change of home RDO.
Hope this helps Mel.
Hi Louis!
I’ve been working as an online teacher since September 2014. My maximum income each month is 7k coz I only work part-time. Ive been doing this job since I was studying actually. My company witholds 10% of our income because we are considered as professionals. Now, the problem is I wasn’t aware that I have to pay certain taxes monthly, annually and quarterly.(I know there was due negligence on my part) I actually just acquired my TIN this month along with my registration. I’ve been thinking about the penalties I will incur for the last 2 years I wasn’t able to register. I have a daughter and I’m aware that I have personal exemption that comes with my daughter’s 25k exemption. My questions are the ff:
1. Will it be possible to use my tax credit to pay my penalties?
2. Am i legible SA tax credit based on my income and incurred taxes?
3. How will I avail of these tax refunds if possible?
4. Am i even required to file an itr based on my income?
Thank you so much!
Additional info: we are contractors no employee-employer relationship. And 8 have no other sources of income. Thanks Louis!
Edit: Question 2. Am i qualified to receive tax refund/credit based on my profession,income, dependents and taxes incurred.
May I add this question too.
How does personal exemption and dependent exemption work?
Thanks once again
Do they actually deduct 50k from your overall annual tax? Ex. 600 is my tax each month so 600×12=7200
Since 7200 is under the 50k threshold I’m suppose to get tax credit?
Or the 50k of your income is untaxable. I’m really at my wit’s end here.
I apologize for the multiple questions I’ve been asking. I attended the seminar yet to be honest it was difficult to be accommodated in BIR.
Hi Bomi,
Thank you for your great question, these really good. But let me just give first a disclaimer that with the current rules of BIR, you might need to talk to a BIR accredited CPA to help you out
with your situation. My advise is the earlier you settle it the better because as long as you delay settling it, interest keeps on running on your unpaid taxes.
So let me answer your questions directly first and add a discussion about how actually income tax is computed since lots of taxpayers are confused or even misled about it.
1. I believe BIR does not allow offsetting of tax credit against penalties.
2. Yes, tax credit arises when your payor/client overwithheld or you over paid/remitted the tax payable that you should be paying(more on this later).
3. In the Philippines it is almost impossible to get back your money as cash refund they would rather give you a tax credit certificate(the term is actually tax debit memo) that you can use on other tax payables.
need to secure a tax credit certificate(I am not actually sure how is this done that is why I said you need to seek help from an accredited CPA… but I think in the ITR that you will file that indicates you overpaid you can tick mark that you will use
the credit on your next return.
4. Filing a monthly, quaterly, and annual return are actually required for professionals/contractors/business owners as part of BIR’s monitoring.
Now lets atalk about how really an individual professional or busines owner is taxed.
Income tax is computed this way
Gross income
less:allowable deduction(Personal and Additional exemptions)
less: Business income
equals:Taxable income
multiplied: applicable tax rate
equals: Tax payable
less: Tax withheld & tax credits
equals: Tax still due or another tax credit
From the above computation you can see that the 50K personal exemption and the 25k per child not exceeding 4 children is a deduction to gross income and not to your taxable income.
these are allowance to your gross income deemed to be your minimum living expenses.
ANother issue that most compute is with tax credit/refund. IN order for one to have a tax credit/refund as any other ordinary case, is that you must have overpaid something taht is why they are returning
it. IN the case for income tax refund, what happens is you are withhheld a certain amount every month or payment and in exchange they are supposed to give you BIR form 2307 which is a withholding tax certificate.
Thes eare the proof a withholding tax was already deducted to your income. At the end of the year you compute your supposed to be tax payable that is why you file an ITR. If the coumpted tax payable is lesser than
the actual tax withheld then it means taxes were overwithheld or overpaid thus they need to return it to you as a refund which again just like I said rarely happens in the Philippines. BIR will just issue you
a tax credit certificate(tax debit memo) which you can use to offset in next years ITR again.
So in your case(assuming this is your only source of income)
Gross Income( 7,000 x 12) 84,000.00
less: Personal -50,000.00
Additional(1 child) -25,000.00
less; Business expense(consult an accountant you might opt for Optional Standard deduction)
Taxable income 9,000.00
multiplied by tax rate 5%
Equals: TAx payable 450.00
Less: TAx withheld -7,200.00
Equals:Tax refund/credit -6,750.00
Again the above is just a sample computation so better sit down with a BIR accredited CPA and discuss on how you can settle your taxes right.
I hope this helps Bomi.
Thank you very much! I appreciate it this. Just a side note, I really think that citizen taxation should be part of every college’s curriculum. I felt helpless and uninformed. Thanks to you not so much! As a token of my appreciation I’ll check out your YouTube channel! Thanks again Louis!
Sorry but one last thing Louis, I just acquired my tin so I’ve been thinking is to how my company remits my taxes Kay BIR for the last 2 years? Do they keep it until I provide them my tin or do they remit it to BIR under my name? Thanks.
Hi Bomi sorry for the late reply. They shoul remit the taxes they withheldand in the first placed they should have ask you if you have a TIN and since you dont have and if it wasan employee-employer relationship they should have process your TIN.
But since you were a contractor, they should have ask for your tin and if not they could just have made up your tin in the bir form for them to process their filing and payment. As far as theyare concern they remittedthe amont they deducted.
Hi Louis! I have a question. I have multiple sources of income-I’m a doctor and I work for a hospital and have a clinic. From hospitals I have my taxes witheld, which are great because I have tax credits in the form 2307. However, how can I get my clinic income have witholding tax as well? Is it possible? I know it’s not applicable because patients can’t withold 10% for the BIR for me. Is there another way? I really need those credits.
Hi Dr. Mori,
Yes you are correct your patients cant issue you 2307 unless you bill as a business. But I need to know if the clinic is an entity registered asa business? If it is then you should either be filling percentage tax or quaterly income tax which arein a way a form credits.
But the thingis lots of people dobt clearly understand the form 2307 or 2316 and think the BIR is actually giving you credit. This credit is actually an advance tax payment collection BIR collects to ensure funds flow ona regular basis. If you file your ITR, they actually compute the tax you are suppose to pay then deduct the credit in 2307 which is the payment they already collected. Any actual excess from the credit is the real credit or refund, meaning you paid more than the tax you were suppose to pay for the taxable year. But imagine if the government has to wait April 15 for you to pay your taxes? They have no money to pay oayroll, buy materials, etc to function.
If your clinic is regiatered check your COR issued by the BIR. You should be paying either percentage tax or VAT and also it will indicate there if you will be filibg and paying monthly or quaterly income tax.Seekthe help of a BIR accredited CPA for issues like this.
Hope this helps Dr. Mori.
P.S. I am not an accredited BIR CPA 🙂
Hi Sir Louis! My sister is a customs broker and I am tasked to prepare and file her ITR. Its her first time to file ITR since she just registered with the BIR last year.
We are opting to choose OSD as her deduction with the hopes of not needing to submit an audited fs. But i’m not sure if it goes that way, that if you opt to choose OSD you wont submit audited fs anymore. Hope you could clear this issue. Thank you very much.
Hi Rhod, as far as I can remember yes(please seek the help of a BIR Accredited CPA for professional opinion or help when directly dealing with the BIR. It might be advantageous but the problem is once you opt for OSD, you will have to use it on the succeeding years even if it is more wiser to file a detailed FS if your actual expenses is higher leading to a smaller taxable income. Hope this helps Rhod.
Hello sir, i’ll ask few questions lang po.
1. Can I actually refund my given tax?
2. If yes, how?
my employer already gave me the copy of my ITR and eto po yung latest tax details ko from my payslip:
TAX EXEMPTION: 50,000.00
TAXABLE INCOME TO DATE: 70,134.60
TAX WITHHELD TO DATE: 13,952.29
I dont know how things work regarding tax so i will appreciate it so much if you will help me to this :'(
Hi Kimhico,
Apologies I didn’t reply to your query right away.
To answer your questions:
1. Yes you can refund your overpaid tax. Usually your employer(if you are employed under one employee only within the taxable year) should recompute your taxable income for the year to determine if they have correctly withheld your taxes. If they have over deducted or underdeducted, they should have adjusted your last pay to reflect a refund or additional deduction so that your taxes will be fully paid.
2. How? just like I mentioned above, your employer should have computed it to adjust your final pay for the taxable year so that they can include the refund or additional deduction to your last pay in the taxable year. If you have multiple employer or if you are in one of those special situation where you should file for your ITR you can convert the overpayment as a tax credit to apply to next years payment.
In your ITR can you locate the amounts that correspond to what you shared? If you have your ITR/BIR form 2316 Taxable income to date(70,134.60) should be in item 25. Tax withheld(13,952.29) should be in item 31. NO to determine if whether you have a tax refund or not you shold compare item 29(Tax DUe) to item 31(total tax withheld). If Tax withheld is greater than tax due you have a refund… if not then they need to deduct you additional ax to cover the difference between tax due and tax withheld.
Hope this helps kimhico
Is it the role/obligation of an accountant to inform an employee(with previous employee) about self-filing?
Hi Nicole,
Apologies for the late reply. Actually it is the role of the company’s HR. Every time they hire the should have asks the new employee for his/her ITR from last employment. IF your last employment is not the same year as the new job then there should be no problem since your new employment is under the current tax year. On the other hand if the new employee has both last and current employment within the same taxable year and that the last employer did not return all the withholding taxes they withheld, HR should inform the new employee that he/she is not covered by substituted filing and thus need to file her ITR. Of course the company must have directed the HR about this, if not I guess the are not coordinating.
Hope this answers your query Nicole.
Hi Sir Louis, I am a binary option and forex trader how can I Tax my trading profits in the Philippines? And do I have to tax my losses?
Thank You
Jets
hi sir louis working po ako as a j.o. sa isang municipal..if mag end po contract ko after 3 years my mkukuha po ba kong tax refund khit j.o.lang..
Hi Yoj,
Di ko an din kasi alam pano ung j.o. systemsa munisipiyo. I had a summer job work dati sa bayan ko so I do understand j.o. but as to tax not sure how they handle it in your municipality.
Magbabasabasa ako to check about it.
Thanks Yoj
Hi Sir Louis Secretary ako ng Employer namin from Saudi Arabia, need ko ba kumuha ng ITR and paano ako makakuha? Meron ako business Consultancy and Services which is my ITR naman, pwede na din ba na yun ang gamitin ko pag hinanapan ako ng ITR as Employee (Secretary) thank you and more power!
Hi Edith,
Medyo naguliuhan ako, do you mean kung dpaat ka bang magsubmit ng ITR or kumuha ng TIN? If yung consutancy business mo ay Sole Proprietorhip ung na din ang TIN mo at ung pinafile mo na ITR is dapat ung Personal ITR mo at nirererport mo na source oif income mo ung consultancy firm mo. UNg work mo sa Saudi is non-taxbale actually(if physicall sa Saudi ka nagwowork). but if ung service is actually here there dito un bubuwisan.
Hope this helps Edith.