Complete BIR Taxation Guide For Self-Employed & Freelancers

Complete BIR Taxation Guide for
Self-Employed & Freelancers

Everything freelancers (and self-employed
individuals) need to know about BIR Taxes. From
applying for a TIN ID, paying taxes online, to
getting your Income Tax Returns (ITR).
Michie Victoriano
Last Updated on – Sep 2, 2019 @ 6:40 am
As a freelancer myself, I get the occasional question from friends and

relatives: How do you pay for taxes? Fortunately, with this guide I can
simply tell them, “Here’s the link, read everything!”
Kidding aside, there are tons of freelancers out there scratching their
heads asking the what, where, when, and how to fulfill their BIR tax
responsibilities.
Their questions inspired our team at Grit PH to come up with this

comprehensive guide of all the stuff freelancers need to know about
managing their BIR tax in the Philippines.
Post Contents:
What is the Bureau of Internal Revenue (BIR) and what does it do?
Types of Taxes in the Philippines
What is the TRAIN Law and its effects?
https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

Page 1 of 35
Who are required to file Income Tax Returns?
Who are not required to file Income Tax Returns?
Who are exempted from Income Tax?
Do Freelancers need to pay Taxes [under the Train Law]?
What’s the impact of the TRAIN Law on take-home pay?
BIR Tax Tables
Withholding Tax Calculators
What is a TIN?
Who can apply for a TIN?
Getting your TIN for the first time
TIN Application Procedure for Self-Employed Individuals
How to Get your TIN Online?
How to Get a Digitized TIN ID?
How to Recover a lost TIN/TIN Card
How can Freelancers or Self-Employed Professionals avail of the
8% Tax?
Requirements and Procedure for Filing Income Tax for Self-
Employed Individuals
How to Pay your Income Tax Online?
List of ITR Forms (2316, 1700, 1701, 1702)
BIR Form 2316
BIR Form 1700
BIR Form 1701
BIR Form 1702
How Freelancers (and Self-Employed Individuals) cam get their
Income Tax Returns?
What is the Bureau of Internal Revenue (BIR)

and What Does It Do?

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The Bureau of Internal Revenue (BIR) is the government body under
the Department of Finance that collects taxes and enforces tax laws.
Its powers and duties include the following:
Reduction and collection of all internal revenue taxes, fees, and

charges
Enforcement of all forfeitures, penalties, and fines connected
therewith, including the execution of judgments in all cases
decided in its favor by the Court of Tax Appeals and the ordinary
courts
Administration of supervisory and police powers conferred to it by
the National Internal Revenue Code and special laws.
Types of Taxes in the Philippines

There is an assortment of taxes that we pay as citizens of our country.
While most of us are familiar with Value-Added Tax (VAT) or Income
Tax, there are many other forms of taxes that we only realize exist
when we’re required to pay.
Here’s a list of some of the taxes collected by the government.
1. Capital Gains Tax is a tax imposed on the gains presumed to have

been realized by the seller from the sale, exchange, or other
disposition of capital assets located in the Philippines, including pacto
de retro sales and other forms of conditional sale.
2. Documentary Stamp Tax is a tax on documents, instruments, loan

agreements and papers evidencing the acceptance, assignment, sale
or transfer of an obligation, rights, or property incident thereto.

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3. Donor’s Tax is a tax on a donation or gift and is imposed on the
gratuitous transfer of property between two or more persons who are
living at the time of the transfer.
4. Estate Tax is a tax on the right of the deceased person to transmit

his/her estate to his/her lawful heirs and beneficiaries at the time of
death and on certain transfers which are made by law as equivalent to
testamentary disposition.
5. Income Tax is a tax on all yearly profits arising from property,

profession, trades or offices or as a tax on a person’s income,
emoluments, profits and the like.
6. Percentage Tax is a business tax imposed on persons or entities

who sell or lease goods, properties or services in the course of trade
or business whose gross annual sales or receipts do not exceed
P550,000 and are not VAT-registered.
7. Value-Added Tax is a business tax imposed and collected from the

seller in the course of trade or business on every sale of properties
(real or personal) lease of goods or properties (real or personal) or
vendors of services. It is an indirect tax, thus, it can be passed on to
the buyer.
8. Withholding Tax on Compensation is the tax withheld from

individuals receiving purely compensation income.
9. Expanded Withholding Tax is a kind of withholding tax which is

prescribed only for certain payors and is creditable against the income
tax due of the payee for the taxable quarter year.

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10. Final Withholding Tax is a kind of withholding tax which is
prescribed only for certain payors and is not creditable against the
income tax due of the payee for the taxable year. Income Tax withheld
constitutes the full and final payment of the Income Tax due from the
payee on the said income.
11. Withholding Tax on Government Money Payments is the

withholding tax withheld by government offices and instrumentalities,
including government-owned or -controlled corporations and local
government units, before making any payments to private individuals,
corporations, partnerships and/or associations.
What is the TRAIN Law and What are its

Effects?
The Tax Reform for Acceleration and Inclusion, or TRAIN, is the first
package of the Comprehensive Tax Reform Program (CTRP).
It is a recently passed tax reform law with the goal of creating a more
just, simple, and effective system of tax collection.
Following the constitution, it aims to redistribute tax-paid benefits by

creating a system wherein richer citizens will have larger contributions
and poorer citizens benefit more from government programs and
services.
TRAIN aims to fund the following:
1. Education
2. Healthcare Services
3. Infrastructure Programs

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As a result of TRAIN, many things have changed: new taxes have been
introduced, some existing taxes either been raised or lowered, and
new rules for exemptions have been implemented.
Here’s a list of some of the things that have changed now that TRAIN
is in effect.
1. New Personal Income Tax Rates
Personal income tax rates will be lowered. Salaried employees earning

an annual income of P250,000 or below will be exempted from paying
income taxes.
2. Lower Tax Rates for Professionals
Self-employed professionals can expect to pay lower taxes because of

reduced tax rates for professionals.
3. Tax on 13th Month Pay and Other Bonuses
The threshold for tax exemption on 13th month pay and other bonuses
received by salaried employees has been raised from P82,000 to
P90,000. As a result, 13th month pay and bonuses paid to employees
that amount to P90,000 or below will not be taxed.
4. Tax on Drinks using Sugar and Caloric / Non-Caloric

Sweeteners
Beverages that use sugar and other sweeteners are now taxed. These
include soft drinks and other cola drinks, fruit juices, and powdered
drinks.

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5. Tax Exemption of milk, 3-in-1 coffee, medicines for diabetes,
etc.
Exempted from the sugar tax are milk, 3-in-1 coffee, 100% natural fruit
juice or vegetable juice, medically-indicated beverages, and drinks and
beverages that use natural sweeteners such as coco sugar or stevia.
Drugs and medicines prescribed for diabetes, high cholesterol, or

hypertension are also exempted from the 12% VAT.
6. Taxes on LPG, Diesel, Gasoline, and other fuel products
7. Taxes on Cars and Automobiles
8. Tax on Coal
9. Tax on Tobacco Products
10. Donor’s Tax
11. Estate Tax
Estate tax, or tax levied on the properties or estate of lawful heirs and
beneficiaries inherited from a deceased person, will now be subject to
a flat rate of 6% on the amount in excess of P5 million.
Estates with a net value of P5 million and below will be exempted from
paying the estate tax. Family homes valued at P10 million or less will
also be exempted from estate tax.
12. Tax on Cosmetic Surgery and other Aesthetic Procedures
A new 5% tax on cosmetic surgeries, aesthetic procedures, and body

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enhancements has been implemented
13. Documentary Stamp Tax
The documentary stamp tax charged for some legal or business

transactions has doubled from P1.50 to P3.00.
12. Stock Transaction Tax
13. Foreign Currency Interest Income Tax
The tax on interest income on foreign currency deposits was raised

from 7.5% to 15%.
Tax Exemptions:
With all the changes, one of the things you’ll want to know right away
is if you qualify for any of the new rules on tax exemptions.
Remember, even if you are exempt from paying income tax, this does
not necessarily mean that you don’t have to file your income tax
returns!
Check out our list below and make sure you know where you qualify
and what you have to do in order to pay your taxes correctly.
Who are Required to File Income Tax Returns?
Individuals:
Resident citizens receiving income from sources within or outside

the Philippines

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Employees deriving purely compensation income from two or
more employers, concurrently or successively at any time during
the taxable year
Employees deriving purely compensation income regardless of
the amount, whether from a single or several employers during
the calendar year, the income tax of which has not been withheld
correctly (i.e. tax due is not equal to the tax withheld) resulting to
collectible or refundable return
Self-employed individuals receiving income from the conduct of
trade or business and/or practice of profession
Individuals deriving mixed income, i.e., compensation income and
income from the conduct of trade or business and/or practice of
profession
Individuals deriving other non-business, non-professional related
income in addition to compensation income not otherwise subject
to a final tax
Individuals receiving purely compensation income from a single
employer, although the income of which has been correctly
withheld, but whose spouse is not entitled to substituted filing
Non-resident citizens receiving income from sources within the
Philippines
Aliens, whether resident or not, receiving income from sources
within the Philippines
Non-Individuals:
Corporations including partnerships, no matter how created or

organized.
Domestic corporations receiving income from sources within and
outside the Philippines

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Foreign corporations receiving income from sources within the
Philippines
Estates and trusts engaged in trade or business
Who are not required to file Income Tax returns?
1. An individual earning purely compensation income whose taxable

income does not exceed P250,000.00
2. An individual whose income tax has been withheld correctly by
his employer, provided that such individual has only one employer
for the taxable year
3. An individual whose sole income has been subjected to final
withholding tax or who is exempt from income tax pursuant to the
Tax Code and other special laws.
4. An individual who is a minimum wage earner
5. Those who qualify under “substituted filing.” However, substituted
filing applies only if all of the following requirements are present:
The employee received purely compensation income
(regardless of amount) during the taxable year;
The employee received the income from only one employer
in the Philippines during the taxable year;
The amount of tax due from the employee at the end of the
year equals the amount of tax withheld by the employer;
The employee’s spouse also complies with all 3 conditions
stated above;
The employer filed the annual information return (BIR Form
No. 1604-CF); and
The employer issued BIR Form No. 2316 (Oct 2002 ENCS
version) to each employee.

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Who are exempted from Income Tax?
1. Income from abroad of a non-resident citizen who is:
A citizen of the Philippines who establishes to the satisfaction of

the Commissioner the fact of his physical presence abroad with a
definite intention to reside therein
A citizen of the Philippines who leaves the Philippines during the
taxable year to reside abroad, either as an immigrant or for
employment on a permanent basis
A citizen of the Philippines who works and derives income from
abroad and whose employment thereat requires him to be
physically present abroad most of the time during the taxable
year
A citizen who has been previously considered as a non-resident
citizen and who arrives in the Philippines at any time during the
year to reside permanently in the Philippines will likewise be
treated as a non-resident citizen during the taxable year in which
he arrives in the Philippines, with respect to his income derived
from sources abroad until the date of his arrival in the Philippines.
2. Overseas Filipino Workers, including Overseas Seamen
An individual citizen of the Philippines who is working and deriving

income from abroad as an overseas Filipino worker is taxable only on
income from sources within the Philippines.
Provided, that a seaman who is a citizen of the Philippines and who

receives compensation for services rendered abroad as a member of
the complement of a vessel engaged exclusively in international trade

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will be treated as an overseas Filipino worker.
Note: A Filipino employed as Philippine Embassy/Consulate service

personnel of the Philippine Embassy/consulate is not treated as a non-
resident citizen; hence, their income is taxable.
1. General Professional Partnership

2. Government Service Insurance System (GSIS)
3. Social Security System (SSS)
4. Philippine Health Insurance Corporation (PHIC)
5. Local Water Districts (LWD)
Do Freelancers Need to Pay Tax [Under the

TRAIN Law]?
So how does TRAIN affect freelancers and self-employed taxpayers?
Freelancers still need to pay tax, but there are changes on how you
pay your taxes, and how much you’ll be required to pay.
Under certain conditions, you may even be exempt. Here are some of
the changes that directly affect freelancers.
First off, there will be no more monthly filing of percentage tax.

Instead, filing percentage tax is now quarterly. According to the BIR
TRAIN tax advisory dated February 8th, 2018:
“All taxpayers subject to percentage tax pursuant to Section 116 of

the Tax Code and those who will be subject thereto due to change
of registration from VAT to Non-VAT, are required to pay the
percentage tax on a quarterly basis using BIR Form No. 2551Q.

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There is no need to file and pay monthly percentage tax on their
monthly gross receipts using BIR Form No. 2551M.”
Second, tax rates are now an option for eligible individuals. According
to the BIR TRAIN supplemental tax advisory dated February 19th,
2018:
“Self-employed individuals and/or professionals with gross sales

and/or receipts and other non-operating income that do not
exceed the above amount (VAT exemption amount of Php
3,000,000.00) have the option to avail of the eight percent (8%)
income tax on gross sales or receipts and other non-operating
income in lieu of the graduated income tax rates and percentage
tax.
These taxpayers who avail of this option have to accomplish BIR

form No. 1905 (registration update) to effect the end date for their
VAT or percentage tax, and as such, they are not required to file
quarterly percentage tax.”
In terms of tax exemptions, taxpayers with an annual income of less

than P250,000 are exempt from paying income taxes.
However, freelancers who earn more than P250,000 must pay income
tax based on the graduated tax table, as well as an additional 3%
percentage tax. If a freelancer’s annual revenues exceed P3,000,000,
they must also pay 12% Value-Added Tax.
What’s the Impact of the TRAIN Law on Take-Home

Pay?

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If it’s still somewhat confusing, don’t worry. Here’s a breakdown of
how TRAIN will affect how much money you take home at the end of
the day.
First off, you’ll get to enjoy a higher take-home pay.
Previously, tax rates ranged from 5% to 32%, depending on the tax

bracket you were in.
But now that TRAIN has been implemented, income tax rates have
been lowered, and you’re exempted from paying personal income tax if
you earn less than P250,000 every year.
This tax exemption also includes 13th-month pay and other bonuses,
which means less taxes to pay and more money to take home.
Here’s a breakdown of how that works:
Individuals with an annual salary of P250,000 or below will no

longer pay income tax.
Individuals with an annual salary between P250,000 and
P400,000 per year will be charged with an income tax rate of 20%
on the excess over P250,000.
Individuals with an annual salary between P400,000 and
P800,000 will pay a fixed amount of P30,000 plus 25% of the
excess over P400,000.
Overall, you can break down how tax rates will be implemented into
two groups:
BIR Tax Tables:

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If annual gross sales or income is P3 Million or below:
Self-employed and professionals with an annual income not exceeding

the VAT threshold of P3,000,000 have the option to choose between
these two tax rates:
1. 8% of gross sales or receipts and other income, in excess of

P250,000 instead of the graduated income tax rates and
percentage tax (no option to register for VAT); OR
2. Graduated income tax rates of 0% to 35% on net taxable income,
plus 3% percentage tax (No change in computation of Net
Taxable Business Income)
This 8% withholding tax rate replaces the two-tier rate of 10% (for
self-employed and professionals earning less than P720,000 income
every year) or 15% (for those earning more than P720,000 per year).
The 8% withholding rate is applied on income, regardless of the

amount.
These are the payments made to self-employed individuals that are

subject to 8%:
Professional fees, talent fees, commissions, etc. for services

rendered by individuals;
lncome distribution to beneficiaries of Estates and Trusts;
lncome Payment to certain brokers and agents;
lncome Payments to partners of general professional partnership;
Professional fees paid to medical practitioners; and
Commission of independent and/or exclusive sales
representatives, and marketing agents of companies.”

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If annual gross sales or income is above P3 Million:
Self-employed individuals with an annual income of more than P3

million must follow the graduated income tax rates on the net taxable
income, plus VAT.
Here are some tables that help explain what income tax you can
expect to pay for each tax bracket under TRAIN:
TRAIN Income Tax Table [For 2018 – 2022] – Under the approved TRAIN
Tax Law
Annual Income Tax Rate
P250,000 and below None (0%)
>P250,000 – P400,000 20% of excess over P250,000
> P400,000 – P800,000 P30,000 + 25% of excess over P400,000
>P800,000 – P2,000,000 P130,000 + 30% of excess over P800,000
>P2,000,000 – P8,000,000 P490,000 + 32% of excess over P2 million
Above P8,000,000 P2.41 million + 35% of excess over P8M
Income Tax Rates in the Philippines [Starting Year 2023] – Under the
approved Tax Reform Bill
Annual Income Tax Rate
P250,000 and below None (0%)
>P250,000 – P400,000 15% of excess over P250,000
>P400,000 – P800,000 P22,500 + 20% of excess over P400,000
>P800,000 – P2,000,000 P102,500 + 25% of excess over P800,000

>P2,000,000 –
P402,500 + 30% of excess over P2 million
P8,000,000
P2.2025 million + 35% of excess over P8
Above P8,000,000

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million
Monthly Monthly Tax in Additional Take-Home Pay
Monthly
Tax 2018 (Under Tax Per Month (Under 2018 Tax
Salary
[2017] Reform) Reform)
P10,000 620.09 0 620.09
P15,000 1,541.83 0 1,541.83
P20,000 2,683.84 0 2,683.84
P25,000 3,918.22 634.57 3,283.65
P30,000 5,353.53 1,624.57 3,728.96
P35,000 6,853.53 2,655.72 4,197.81
P40,000 8,331.03 3,886.97 4,444.06
P45,000 9,831.03 5,136.97 4,694.06
P50,000 11,391.98 6,386.97 5,005.01
P55,000 12,991.98 7,636.97 5,355.01
P60,000 14,591.98 8,886.97 5,705.01
P65,000 16,191.98 10,136.97 6,055.01
P70,000 17,791.98 11,497.69 6,294.29
P75,000 19,391.98 12,997.69 6,394.29
P80,000 20,991.98 14,497.69 6,494.29
P85,000 22,671.98 15,997.69 6,674.29
P90,000 24,405.32 17,497.69 6,907.63
P95,000 26,138.65 19,122.69 7,015.96
P100,000 27,871.98 20,747.69 7,124.29
P105,000 29,605.32 22,372.69 7,232.63
P110,000 31,338.65 23,997.69 7,340.96

P115,000 33,071.98 25,622.69 7,449.29

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P120,000 34,805.32 27,247.69 7,557.63
P125,000 36,538.65 28,872.69 7,665.96
P130,000 38,271.98 30,497.69 7,774.29
P135,000 40,005.32 32,122.69 7,882.63
P140,000 41,738.65 33,747.69 7,990.96
P145,000 43,471.98 35,372.69 8,099.29
P150,000 45,205.32 36,997.69 8,207.63
P155,000 46,938.65 38,622.69 8,315.96
P160,000 48,671.98 40,247.69 8,424.29
P165,000 50,405.32 41,941.98 8,463.34
P170,000 52,138.65 43,675.32 8,463.33
P175,000 53,871.98 45,408.65 8,463.33
P180,000 55,605.32 47,141.98 8,463.34
P185,000 57,338.65 48,875.32 8,463.33
P190,000 59,071.98 50,608.65 8,463.33
P195,000 60,805.32 52,341.98 8,463.34
P200,000 62,538.65 54,075.32 8,463.33
P205,000 64,271.98 55,808.65 8,463.33
P210,000 66,005.32 57,541.98 8,463.34
P215,000 67,738.65 59,275.32 8,463.33
P220,000 69,471.98 61,008.65 8,463.33
P225,000 71,205.32 62,741.98 8,463.34
P230,000 72,938.65 64,475.32 8,463.33
P235,000 74,671.98 66,208.65 8,463.33
P240,000 76,405.32 67,941.98 8,463.34

P245,000 78,138.65 69,675.32 8,463.33

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P250,000 79,871.98 71,408.65 8,463.33
Withholding Tax Calculator
If you’re still confused or a little lost, you can use these Withholding
Tax calculators to get a rough idea of how much taxes you’ll owe
starting 2018 with your current salary.
BIR’s Withholding Tax Calculator

iMoney.ph’s Income Tax Calculator
To Estimate the Impact of the TRAIN Law on Compensation

Income
If you want to compare how the TRAIN Law affects your compensation
income, you can use these tax calculators.
Department of Finance Tax Calculator

BIRTaxCalculator.com
What is a TIN and What is it For?

A Taxpayer Identification Number or TIN is an identification number
used by the BIR to identify individuals or entities who are paying taxes.
By law, any person, whether natural or juridical, required under the

authority of the Internal Revenue Code to make, render or file a return,
statement or other documents, is required to have a TIN and use it in
the return, statement, or document to be filed with the BIR.
Each person or entity should only have one TIN. Using more than one

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TIN is a criminal offense punishable by a fine and imprisonment.
Who can apply for a TIN?
Here’s a list of individuals and entities who can secure their own TIN:
1. Self-employed and mixed-income individuals

2. Individuals or employees earning purely compensation income
3. Corporations, partnerships, including government agencies and
instrumentalities (GAI), Local Government Units (LGUs)
4. One time taxpayers with no previously issued TIN
5. Persons registering under Executive Order 98 (those securing TIN
to transact with government offices.
6. Estates and trusts
7. Non-resident citizens/Overseas Contract Workers/Seamen
earning purely foreign-sourced income
Getting Your TIN For the First Time
Here’s how you can get your own TIN. Below are the documents
required for the different individuals/entities that can register a TIN.
Requirements for Self-Employed and Mixed-Income Individuals:
1. Filled-up BIR Form 1901

2. Photocopy of Mayor’s Permit, or duly received Application for
Business Permit if still on process
3. NSO Birth Certificate
4. Marriage Contract (if applicable)
5. Professional Regulation Commission ID (if applicable)

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6. Occupational Tax Receipt or Professional Tax Receipt
7. Contract or Company Certificate of Employment
8. Other documents which may include the following, if applicable:
Contract of Lease
DTI Certificate of Registration for Business Name
Proof of registration/permit to operate from economic
development authorities
Franchise agreement
Sworn statement of capital
Working permit for non-resident
Waiver of husband to claim additional exemption
NSO Birth Certificate of declared dependents
Requirements for Individuals Earning Purely Compensation

Income:

2. NSO Birth Certificate or any valid ID bearing applicant’s complete
name, birth date and signature
3. Certificate of Employment
4. Marriage Contract (if applicable)
Requirements for Corporations and Partnerships (including

GOCCs, GAI, and LGUs):

2. Certificate of Registration issued by the Securities and Exchange
Commission (SEC); articles of incorporation/partnership
3. Mayor’s Permit
4. Other documents which may include the following, if applicable:

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Contract of lease
Certificate of authority if Barangay Micro Business Enterprise
registered
Franchise agreement
License to do business in the Philippines, if a resident foreign
corporation
Proof of registration from economic development authorities
5. For cooperatives, a copy of Certificate of Registration from
Cooperative Development Authority
6. For GOCCs, GAI and LGUs; copy of the Unit of Agency’s Charter
Requirements for One-time Taxpayers (With no previously issued

TIN):
1. Filled-up BIR FORM 1904

2. NSO Birth Certificate or any valid ID bearing the applicant’s
complete name, address, birth date, and signature
3. Marriage Contract, if applicable
If your first place of employment is a company with a competent

Human Resources department, they will often process your TIN for
you, especially since they will be processing your income tax as well.
Usually, they’ll ask for the required documents as you start

employment. However, if you’re self-employed, you’ll need to process
your TIN yourself. Here’s how you can do that.
TIN Application Procedure for Self-Employed

Individuals

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1. Accomplish BIR Form 1901 and 1906 and submit the same
together with the documentary requirements with the New
Business Registrant Counter of the RDO having jurisdiction over
the place where the head office and branch, respectively.
2. Pay the Annual Registration Fee (P500.00) at the New Business
Registrant Counter in the BIR Office.
3. Pay Documentary Stamp Tax (DST) (loose DST / BIR Form 2000*
for DST on Contract of Lease, etc). Present proofs of payment.
4. The RDO shall then issue the Certificate of Registration (Form
2303) together with the “Ask for Receipt” notice, Authority to
Print.
5. Attend the taxpayer’s initial briefing to be conducted by the RDO
concerned for new registrants in order to apprise them of their
rights and duties/responsibilities.
How to Get Your TIN Online
You can also apply for your TIN online through BIR’s eTIN website.
If you qualify as any of the following, you can use BIR’s online portal:
Self-employed individuals such as Single Proprietors and
Professionals, Mixed Income Earners (e.g. employee and single
proprietor and/or professional at the same time), Employees, and
Executive Order (E.O.) No. 98.
Here’s how you can get your TIN online:
1. Go to the BIR’s eTIN website

2. Before registering, make sure you have not previously registered
for a TIN. Having more than one TIN is criminally punishable

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pursuant to the provisions of the National Internal Revenue Code
of 1997, as amended.
3. Register using a unique and valid email that you have access to.
Instructions will be sent to this email address.
4. Enter your personal information and ensure that all information is
correct and accurate.
5. Click the SUBMIT button, and follow the instructions sent to your
email.
How to Get a Digitized TIN ID
Aside from getting your TIN, you can also apply for a digitized TIN ID
that not only contains your TIN, but also acts as a valid government-
issued ID.
Out of all government IDs that one can apply for, getting a TIN ID is
one of the easiest to process. Hence, you might as well process it for
your own use.
Here are the requirements needed to process your TIN ID:
1. Valid government issued ID (such as SSS, PRC, voter’s ID, driver’s

license, passport, etc.)
2. Philippine Statistics Authority issued Birth Certificate
How to Apply for your Digitized TIN ID:
1. Head to the BIR Office under whose jurisdiction your work falls
under.
2. Secure a BIR form 1904 if you are earning under the EO 98.
3. After filling out the form, submit the form along with a valid

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government issued ID.
4. You will be given your TIN ID. Request to have it digitized under
EO 98. The digitized ID is usually takes a day to process.
However, if there are many applicants at the time you’re
processing your ID, you’ll likely be asked to come back after a day
or so to claim your digitized TIN ID.
How to Recover a lost TIN/TIN Card
Forgetting what your TIN is can be a hassle, especially since you’re

only given one TIN for your whole life, and you’re not allowed to just
re-register.
After making a plan to make sure you don’t misplace your TIN again,
here are some ways you can recover your lost TIN.
1. Contact the BIR Contact Center

www.bir.gov.ph/index.php/contact-us/bir-trunkline.html
contact_us@cctr.bir.gov.ph
2. Go to the BIR Revenue District Office where your TIN is registered
Submit your BIR Form 1905
Affidavit of Loss (for a LOST TIN Card)
Original TIN Card (for a DAMAGED TIN Card)
Valid ID and Supplementary IDs
Whichever method you choose to recover your TIN, remember that it’s
your responsibility to protect your TIN from being lost or from being
stolen by people who might use your identity for their own purposes.
How can Freelancers or Self-employed

Page 25 of 35
Professionals avail of the 8% Tax?
Who is Qualified for 8% Tax?
Below are the Eligibility Requirements to avail of 8% Tax Rate
An individual must meet ALL 4 criteria to be eligible to register for the

8% tax rate availment option:
1. Individuals (Single Proprietor or Professional or Mixed Income

Earner) earning from self-employment and/or practice of
profession;
2. Taxpayers whose gross sales/receipts and other non-operating
income did not exceed the P3,000,000 VAT threshold during the
taxable year;
3. Taxpayers registered and subject only to percentage tax under
Section 116 of the NIRC, as amended; or taxpayers exempt from
VAT or other percentage taxes; AND
4. Must have signified their intention to elect the 8% income tax rate
thru any of the enumerations under Section II(7) of this Order.
The following individuals are NOT eligible to avail of the 8% tax rate
option:
Purely Compensation Income Earners;

VAT-registered taxpayers, regardless of the amount of gross sales
or receipts and other non-operating income;
Taxpayers exempt from VAT or other percentage taxes whose
gross sales/receipts and other non-operating income exceeded
the P3,000,000 VAT threshold during the taxable year;
Taxpayers who are subject to Other Percentage Taxes under Title

Page 26 of 35
V of the Tax Code, as amended, except those subject under
Section 116 of the same Title;
Partners of a General Professional Partnership (GPP);
Individuals enjoying income tax exemption.
The above taxpayers will be taxed based on the graduated income tax
rates prescribed under Section 24 (A)(2)(a) of the NIRC.
Requirements and Procedure for Filing Income

Tax for Self-Employed Individuals
Now that you’re registered as a self-employed individual and have a
TIN, it’s time to finally file your income taxes.
While the process isn’t too difficult, it often takes a lot of time because
many people wait until the deadline to process their taxes, which
increases the number of people at a time and exponentially lengthens
processing lines.
Keep this in mind as you read on how to file your income taxes.
Documents needed:
1. For self-employed individuals; for individuals deriving mixed

income, you’ll need to fill up three (3) copies of BIR Form 1701.
Procedure:
1. Fill out 3 copies of BIR Form 1701. Make sure all information is
correct and accurate.
2. If there is payment to be made:
Proceed to the nearest Authorized Agent Bank (AAB) of the

Page 27 of 35
BIR Revenue District Office where you are registered and
present the duly accomplished BIR Form 1701, together with
the required attachments and your payment.
Receive your copy of the duly stamped and validated form
from the teller of the AABs/Revenue Collection Officer
3. If there is no payment to be made:
Proceed to the Revenue District Office where you are
registered or to any established Tax Filing Centers
established by the BIR and present the duly accomplished
BIR Form 1701, together with the required attachments.
Receive your copy of the duly stamped and validated form
from the RDO/Tax Filing Center representative.
How to Pay your Income Tax Online

Aside from filing your income tax in person, you also have the option of
filing your income tax online through the BIR’s Electronic Filing and
Payment System (eFPS) website.
If you’re looking to avoid long lines and save yourself a significant

amount of time spent processing your income taxes, read on to find
out how you can file online from the comfort of your home.
Procedure for Online Income Tax Filing:
1. If you haven’t already, register your TIN here to be able to use

BIR’s eFPS website.
2. Check your email for a confirmation email from the BIR. This
confirms your enrollment and should be sent in 3 to 10 working
days.

Page 28 of 35
3. Once your eFPS registration has been confirmed, head to the
BIR’s eFPS website and accomplish the tax forms and other
relevant documents that need to be presented to online payment
partners.
4. Once finished, pay your taxes through online banking channels
that are accredited by the BIR.
Currently, these are the only online banking channels that are
approved by the BIR and can be used to pay for your income tax
online:
Development Bank of the Philippines

Land Bank
Bank of the Philippine Islands
GCash
Or you can also use Taxumo – an end-to-end online tax filing platform
in the Philippines that lets freelancers, self-employed professionals,
and SMEs automate the whole tax filing process in minutes.

Page 29 of 35
List of ITR Forms (2316, 1700, 1701, 1702)
BIR Form 2316: Certificate of Compensation Payment
or Income Tax Withheld
This form is a certificate that must be accomplished and issued yearly

by the Payor or Employer to each employee whose income is
subjected to final tax declaration.
The employer must indicate the total amount that was paid to the
employee and the corresponding taxes withheld during the calendar
year.

Page 30 of 35
The BIR defines compensation as either salaries, wages or other forms
of remuneration given by an employer to an employee. Should you
have no other income from other employers, there will be no need for
you to file an income tax return.
The BIR Form 2316 is enough proof that your income has already been
subjected to income tax. This is called substituted filing, wherein the
employer files the income tax returns for the employee.
This form is normally requested as part of pre-employment

requirements in order for your new employer to make sure that the
correct deductions have been made by your previous employer.
The BIR Form 2316 must be attached to the Annual Income Tax
Return, which is the BIR Form 1700 for individuals receiving purely
compensation income or BIR Form 1701 for individuals with mixed
income.
BIR Form No. 1700: Annual Income Tax Return for

Individuals Earning Purely Compensation Income
This return is filed annually by every resident citizen deriving

compensation income from all sources, or resident alien and non-
resident citizen with respect to compensation income from within the
Philippines.
The following are not required to file this return:
1. An individual whose gross compensation income does not exceed

his total personal and additional exemptions.
2. An individual whose compensation income derived from one

Page 31 of 35
employer does not exceed P60,000 and the income tax on which
has been correctly withheld.
3. An individual whose income has been subjected to final
withholding tax (alien employee as well as Filipino employee
occupying the same position as that of an alien employee of
regional or area headquarters and regional operating
headquarters of multinational companies, petroleum service
contractors and sub-contractors, and offshore banking units;
non-resident alien not engaged in trade or business); and
4. Other individuals not required to file an income tax return as
provided for by the National Internal Revenue Code and other
laws, e.g. senior citizen receiving purely compensation income of
not more than P60,000.00 in a year.
This return is filed on or before April 15 of each year covering income

for the preceding taxable year.
BIR Form No. 1701: Annual Income Tax Return for Self-
Employed, Professionals, Estates, and Trusts
This return is filed annually by the following for business income

derived during the calendar year regardless of amount of gross
income:
1. A resident citizen engaged in trade, business or practice of

profession within and without the Philippines.
2. A resident alien, non-resident citizen or non-resident alien
individual engaged in trade, business or practice of profession
within the Philippines.
3. A trustee of a trust, guardian of a minor, executor/administrator of

Page 32 of 35
an estate or any person acting in any fiduciary capacity for any
person, where such trust, estate, minor or person is engaged in
trade or business.
This is also filed by individuals who receive mixed income

(compensation with self-employment/professional income).
However, an individual whose sole income has been subjected to final

withholding tax pursuant to Sec. 57(A) of the Tax Code, or who is
exempt from income tax pursuant to the Tax Code and other laws, is
not required to file an income tax return.
This return is filed on or before April 15 of each year covering income

for the preceding taxable year.
BIR Form No. 1702: Annual Income Tax Return for

Corporations and Partnerships
This return is filed annually by every corporation, partnership, joint

stock companies, joint accounts, associations (except foreign
corporation not engaged in trade or business in the Philippines and
joint venture or consortium formed for the purpose of undertaking
construction projects or engaging in petroleum, coal, geothermal and
other energy operators), government-owned or controlled
corporations, agencies and instrumentalities.
This return is filed, with or without payment, on or before the 15th day
of the fourth month following the close of the taxpayer’s taxable year
whether fiscal or calendar year.
How Freelancers (and Self-Employed) Can Get

Page 33 of 35
their Income Tax Return
As a freelancer, it’s your responsibility to file your own taxes. The first
thing you need to do is register as a self-employed individual at the
BIR. These are the required documents needed:
1. BIR Registration Form (Form 1901)

2. BIR Payment Form (Form 0605)
3. BIR Authority to Print Form (1906)
4. NSO Birth Certificate
5. Barangay Certification
6. Cedula
7. TIN Number/Card
8. Books of account (ledger/journal/expenses book)
When you have all the necessary documents together, you’ll need to
submit these to the BIR District office that jurisdiction over your
business.
Pay an annual registration fee of P500, a P15 certification fee, and

another P15 fee for the documentary stamp tax.
Next, you’ll be required to attend a seminar held by the BIR that briefs
taxpayers, and then you’ll receive your Certificate of Registration
(COR). Once you have your COR, you’ll then have to apply invoices or
receipts using BIR Form 1906.
Then, register your books of accounts and have them stamped in the
same district office.
When you’ve successfully registered as self-employed, you’ll

Page 34 of 35
eventually have to file your Income Tax Return. Here’s how you can file
your Income Tax Return:
1. On BIR’s website, download BIR Form No. 1701, titled “Annual

Income Tax Return for Self-Employed Individuals, Estates and
Trusts.”
2. Follow BIR’s guidelines and fill it out completely and accurately.
Double check to make sure all information is correct.
3. When you’ve finished filling up the form, head to any authorized
agent bank of the district office where you are registered and
present to them your form and documents.
4. If you’ve done everything correctly, they will stamp and validate
the form as proof of filing your ITR.
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Complete BIR Taxation Guide For Self-Employed & Freelancers

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Self-Employed & Freelancers

Last Updated on – Sep 2, 2019 @ 6:40 am

As a freelancer myself, I get the occasional question from friends and

Their questions inspired our team at Grit PH to come up with this

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

What is the Bureau of Internal Revenue (BIR)

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

Reduction and collection of all internal revenue taxes, fees, and

Types of Taxes in the Philippines

Here’s a list of some of the taxes collected by the government.

1. Capital Gains Tax is a tax imposed on the gains presumed to have

2. Documentary Stamp Tax is a tax on documents, instruments, loan

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

4. Estate Tax is a tax on the right of the deceased person to transmit

5. Income Tax is a tax on all yearly profits arising from property,

6. Percentage Tax is a business tax imposed on persons or entities

7. Value-Added Tax is a business tax imposed and collected from the

8. Withholding Tax on Compensation is the tax withheld from

9. Expanded Withholding Tax is a kind of withholding tax which is

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

11. Withholding Tax on Government Money Payments is the

What is the TRAIN Law and What are its

Following the constitution, it aims to redistribute tax-paid benefits by

TRAIN aims to fund the following:

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

1. New Personal Income Tax Rates

Personal income tax rates will be lowered. Salaried employees earning

2. Lower Tax Rates for Professionals

Self-employed professionals can expect to pay lower taxes because of

3. Tax on 13th Month Pay and Other Bonuses

4. Tax on Drinks using Sugar and Caloric / Non-Caloric

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

Drugs and medicines prescribed for diabetes, high cholesterol, or

6. Taxes on LPG, Diesel, Gasoline, and other fuel products

7. Taxes on Cars and Automobiles

9. Tax on Tobacco Products

10. Donor’s Tax

11. Estate Tax

12. Tax on Cosmetic Surgery and other Aesthetic Procedures

A new 5% tax on cosmetic surgeries, aesthetic procedures, and body

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

13. Documentary Stamp Tax

The documentary stamp tax charged for some legal or business

12. Stock Transaction Tax

13. Foreign Currency Interest Income Tax

The tax on interest income on foreign currency deposits was raised

Who are Required to File Income Tax Returns?

Resident citizens receiving income from sources within or outside

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

Corporations including partnerships, no matter how created or

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

Who are not required to file Income Tax returns?

1. An individual earning purely compensation income whose taxable

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

1. Income from abroad of a non-resident citizen who is:

A citizen of the Philippines who establishes to the satisfaction of

2. Overseas Filipino Workers, including Overseas Seamen

An individual citizen of the Philippines who is working and deriving

Provided, that a seaman who is a citizen of the Philippines and who

https://grit.ph/freelancer-tax/ 11/12/19, 6:45 PM

Note: A Filipino employed as Philippine Embassy/Consulate service