An Income Tax is a tax imposed by the national government on businesses and individuals generating income inside or outside of the Philippines. Taxpayers are required to file an Income Tax Return (ITR) on a quarterly or annual basis for the government to determine their tax obligations.
Like most taxes paid by individuals and companies, the government utilizes income taxes to fund their programs for the improvement of social services, infrastructures, and other necessities.
What is an Income Tax?
As defined by the Bureau of Internal Revenue (BIR), Income Tax is a tax on a person’s income derived from the practice of their profession, engagement in trade or business, “or on the pertinent items of gross income” specified in Title II, Section 31 of the Tax Code of 1997 (Tax Code).
Filing Income Tax Returns with the BIR
Both individual and non-individual (corporations, businesses, etc.) taxpayers in the Philippines are required to declare their income taxes in a quarterly or annual basis.
Types of taxpayers required to declare income taxes:
- Resident citizens receiving income from engaging in trade, business or practicing their profession inside or outside of the Philippines;
- Resident aliens, non-resident citizens or non-resident alien individuals receiving income from engaging in trade, business or practicing their profession inside the Philippines;
- Corporations and partnerships with active operations inside the Philippines (regardless of how they were created or organized);
- Domestic corporations receiving income from sources within and outside of the Philippines;
- Foreign corporations receiving income from sources within the Philippines; and
- Estates and trusts engaged in trade or business inside or outside the Philippines.
However, foreign corporations are not required to file ITRs if they do not engage in trade or business in the Philippines, as well as joint ventures or organizations formed to venture on construction projects or engage in petroleum, coal, geothermal, and other energy operations.
Table of BIR Forms for Income Tax
|Prescribed Filing Period
|Quarterly Income Tax Return for Individuals, Estates, and Trusts
On or before May 15 of the current taxable year.
On or before August 15 of the current taxable year.
On or before November 15 of the current taxable year.
|Quarterly Income Tax Return for Corporations, Partnerships, and other Non-Individual Taxpayers
|60 days following the close of each of the first 3 quarters of the taxable year whether calendar or fiscal year.
|Annual Income Tax Return for Self-Employed Individuals, Estates, and Trusts
|Filed on the 15th day of the 4th month after the end of the year.
|Annual Income Tax Return for Corporations, Partnerships, and Other Non-Individual Taxpayers Subject Only to REGULAR Income Tax Rate
|Filed with or without payment on or before the 15th day of the 4th month following the close of the taxpayer’s taxable year.
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