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Here's the Tax Schedule for Freelancers

Freelancers, listen up!
Here's the Tax Schedule for Freelancers Freelancers, listen up!

With the 15th of April fast approaching, it is a common sight to see freelancers with no regular accounting staff scrambling to reconcile their records, to understand the various tax types and deadlines, and to make sense of the countless tax forms. Here is a quick guide that summarizes the basics of taxation for freelancers: [Note: This table should not be taken as legal advice or as an exhaustive/comprehensive list of all tax laws and other legislation applicable to freelancers. The information provided are as available during the time the article was written and may have to be updated from time to time.]

Processing of Application for TIN and Registration of Self-Employed Individuals

BIR FORM: 1901

For single proprietors and mixed income earners, submit: (a) photocopy of Mayor’s Business Permit (or application therefor) and/or PTR issued by the LGU; and (b) NSO Certified Birth Certificate. Other requirements, as applicable: (a) Contract of Lease; (b) DTI Certificate of Registration of Business Name; (c) Certificate of Authority for Barangay Micro Business Enterprises; (d) Proof of Registration/Permit to Operate from the BOI/PEZA/BCDA/SBMA; (e) Sworn Statement of Capital; (f) waiver of husband to claim additional exemption; (g) Marriage Contract; and (h) NSO Certified Birth Certificate of declared dependents.

For franchise holders, in addition to the foregoing applicable requirements, submit a photocopy of the Franchise Agreement.

DEADLINE

Prior to first taxable event, in the RDO having jurisdiction over the place where the head office is located. For individuals conducting business in a nomadic manner, in the RDO having jurisdiction over the place of residence.

NOTES

Annual Registration Fee = P500Documentary Stamp Tax = P15

For freelancers with existing TIN, file BIR Form 1905 (Application for Registration Information Update).

Request for Certification of Certificate of Registration and Authority to Print

BIR FORM: N/A

For Authority to Print, submit (a) job order and (b) final and clear sample of principal and supplementary receipts/invoices.

For registration of books of account, submit new sets of books of accounts.

DEADLINE

To be processed upon filing of BIR Form 1906.

NOTES

Certification Fee = P100Documentary Stamp Tax = P15 (per document)

For subsequent registration of manual books of account, file BIR Form 1905 together with (a) new sets of books of accounts and (a) photocopy of the first page of previously registered books of accounts. For loose leaf books of accounts, submit (a) photocopy of Permit to Use Loose Leaf Books, (b) Certification or Sworn Statement, (c) books to be registered, which shall be permanently bound and (d) photocopy of the first page of previously registered loose leaf books of accounts.

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For subsequent request for authority to print receipts/invoices, file BIR Form 1906 together with (a) job order, (b) final and clear sample of principal and supplementary receipts/invoices, (c) last booklet or photocopy of previous Authority to Print and (d) Permit to Use Loose Leaf Books of Accounts, as applicable.

Monthly VAT Declaration 

BIR FORM: 2550M

Other requirements, as applicable: (a) BIR Form 2307; (b) summary alpha list of withholding agents of income payments subject to withholding tax at source; (c) duly approved Tax Debit Memo; (d) duly approved Tax Credit Certificate; and (e) authorization letter, if return were filed by an authorized representative.

DEADLINE

On or before the 20th day of the following month

If filing through eFPS:

- Group A – 25 days from end of the month

- Group B – 24 days from end of the month

- Group C – 23 days from end of the month

- Group D – 22 days from end of the month

- Group E – 21 days from end of the month

NOTES

Applicable to any person (a) with actual gross sales or receipts exceeding P1,919,500; (b) required to register as VAT taxpayer but failed to register; or (c) who imports goods, whether or not made in the course of trade or business.

Otherwise, file Monthly Percentage Tax Return (BIR Form 2551M) with the following documentary requirements, as applicable: (a) BIR Form 2307; (b) duly approved Tax Debit Memo; and (c) previously filed return and proof of payment, if filing an amended return. Follow schedule of deadlines for filing of Monthly VAT Declaration.

Monthly Remittance of Taxes Withheld on Compensation

BIR FORM: 1601-C

Other requirements, as applicable: (a) previously filed return and proof of remittance, if filing an amended return; and (b) for advance payment, BIR Form 0605.

DEADLINE

Through eFPS:

- Group A – 15 days from end of month

- Group B – 14 days from end of month

- Group C – 13 days from end of month

- Group D – 12 days from end of month

- Group E – 11 days from end of month

NOTES

Applicable to individuals engaged in business or practice of profession with employees subject to income tax.

Monthly Remittance of Income Taxes Withheld (Expanded) 

BIR FORM: 1601-E

Other requirements, as applicable: (a) previously filed return and proof of remittance, if filing an amended return; (b) Monthly Alpha List Summary; and (c) for advance payment, BIR Form 0605.

DEADLINE

Through eFPS:

- Group A – 15 days from end of month

- Group B – 14 days from end of month

- Group C – 13 days from end of month

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- Group D – 12 days from end of month

- Group E – 11 days from end of month

NOTES

Applicable to individuals for payments made in connection with trade or business. 

Monthly Remittance of VAT and other Percentage Taxes Withheld

BIR FORM: 1600

Other requirements, as applicable: (a) alphabetical list of payees; (b) previously filed return and proof of tax payments, if filing an amended return; (c) Certificate of Tax Treaty Relief; (d) authorization letter, if return were filed by an authorized representative; and (e) for advance payment, BIR Form 0605.

DEADLINE

On or before the 10th day of the following month.

NOTES

Applicable (a) to payors of income subject to VAT to non-residents and (b) to payors of income to persons who opted to remit his/its VAT or percentage tax through the withholding and remittance of the same by the withholding agent/payor.

Monthly Remittance of Final Income Taxes Withheld

BIR FORM: 1601-F

Other requirements, as applicable: (a) previously filed return and proof of remittance, if filing an amended return; (b) Monthly Alpha List of Payees; and (c) for advance payment, BIR Form 0605.

DEADLINE

Through eFPS:

- Group A – 15 days from end of month

- Group B – 14 days from end of month

- Group C – 13 days from end of month

- Group D – 12 days from end of month

- Group E – 11 days from end of month

NOTES

Applicable to any withholding agent/payor required to deduct and withhold taxes on income payments subject to Final Withholding Tax.

Quarterly VAT Return

BIR FORM: 2550Q

Other requirements, as applicable: (a) BIR Form 2307; (b) summary alpha list of withholding agents of income payments subjected to withholding tax at source; (c) duly approved Tax Debit Memo; (d) duly approved Tax Credit Certificate; (e) previously filed return and proof of payment, if filing an amended return; and (f) authorization letter, if return were filed by an authorized representative.

NOTES

Applicable to any person (a) with actual gross sales or receipts exceeding P1,919,500; (b) required to register as VAT taxpayer but failed to register; or (c) who imports goods, whether or not made in the course of trade or business.

Otherwise, file Quarterly Percentage Tax Return with the following documentary requirements, as applicable: (a) BIR Form 2307; (b) duly approved Tax Debit Memo; and (c) previously filed return and proof of payment, if filing an amended return. Follow schedule of deadlines for filing of Quarterly VAT Return.

Quarterly Income Tax for Self-Employed Individuals (including those with Mixed Income)

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BIR FORM: 1701Q

Other requirements, as applicable: (a) BIR Form 2307; (b) BIR Form 2304; (c) duly approved Tax Debit Memo; and (d) previously filed return, if filing an amended return for the same quarter.

DEADLINE

April 15 for the first quarterAugust 15 for the second quarterNovember 15 for the third quarter

Quarterly Remittance of Final Income Taxes Withheld on Fringe Benefits Paid to Employees other than Rank and File

BIR FORM: 1603

If filing an amended return, submit previously filed return and proof of tax payments.

DEADLINE

On or before the 15th day of the month following the end of the calendar quarter in which the fringe benefits were granted to the recipient.

NOTES

Applicable to any withholding agent/payor required to deduct and withhold taxes on fringe benefits furnished to employees other than rank and file employees subject to Final Withholding Tax.

Annual Income Tax for Self-Employed Individuals (including those with Mixed Income)

BIR FORM: 1701

Other requirements, as applicable: (a) BIR Form 2316; (b) BIR Form 2304; (c) BIR Form 2307; (d) waiver of husband’s right to claim additional exemption; (e) duly approved Tax Debit Memo; (f) proof of Foreign Tax Credits; (g) Income Tax Return previously filed and proof of payment, if filing an amended return for the same year; (h) Account Information Form or if gross quarterly sales/earnings/output/receipts exceed P150,000, Certificate of independent CPA with Audited Financial Statements; and (i) proof of prior year’s excess tax credits.

DEADLINE

On or before 15 April of every year for income from preceding year.

NOTES

Applicable to any withholding agent/payor required to deduct withholding taxes on income payments subject to Expanded/Creditable Withholding Taxes.

Annual Information Return on Income Taxes Withheld on Compensation and Final Withholding Taxes

BIR FORM: 1604-CF

Other requirements, as applicable: (a) alpha list of employees as of 31 December with no previous employer within the year; (b) alpha list of employees as of 31 December with previous employer/s within the year; (c) alpha list of employees terminated before 31 December; (d) alpha list of employees whose compensation income are exempt from withholding tax but subject to income tax; (e) alpha list of minimum wage earners; (f) alpha list of employees other than rank and file who were given fringe benefits during the year; (g) alpha list of payees subject to Final Withholding Tax; and (h) previously filed return and proof of payment, if filing an amended return.

DEADLINE

January 31 of the following year.

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NOTES

Applicable to any withholding agent/payor required to deduct and withhold taxes on (a) compensation paid to employees and (b) income payments subject to Final Withholding Taxes.

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