Contrary to popular belief, not all freelancers in the Philippines are exempt from tax obligations. You are only exempted from paying taxes if you meet any of the following criteria:
- You are a minimum wage earner.
- Your gross income is well below your basic personal exemption (BPE: Php 50,000, regardless of marital status) and your additional personal exemption (APE: Php 25,000/child dependent, maximum of 4).
- Your annual salary from an employer is Php 60,000 and below.
If you meet any of the following, congratulations! You’re not required to pay taxes as a freelancer or self-employed person. If you need to file taxes, here is everything you need to know about freelancer tax in the Philippines.
Freelancers who need to file taxes must register with the Bureau of Internal Revenue (BIR) as a self-employed individual. By doing so, you’ll be granted a Certificate of Registration (CoR), which will allow you to file and pay your taxes.
You’ll need to prepare the following documents for your BIR registration:
- NSO Birth Certification
- Fully accomplished BIR Form 1901
- BIR Form 0605 Payment Form
- TIN number
- Community tax certificate
- Certification from barangay captain
If applicable, it is also advised you submit the following requirements:
- A copy of mayor’s business permit
- Marriage contract
- ID with Professional Regulatory Commission (PRC)
- DTI certificate of business name
- Occupational or Professional Tax Receipt (OTR/PTR)
- Contract/company certification
If you’ve yet to have a TIN number, all you need to do is secure one by visiting BIR’s official website. This service is free of charge. The whole registration with the BIR, however, requires an annual registration fee of Php 500.00, payable at BIR or any authorized agent banks within the RDO.
The BIR will then require you to attend a seminar, after which you will be able to claim your Certificate of Registration (Form 2303), along with the Books of Accounts, Authority to Print (ATP), and “Ask for Receipt” notice.
When to file taxes
Now that you have your CoR, it’s time to remember your tax obligations. As a freelancer, you will be required to make annual, monthly, and quarterly taxes.
- Monthly Percentage Tax
Paid every 20th of the month
BIR Form 2551M and BIR Form 0605
- Quarterly Income Tax
Paid every 15th of April, August, and November
BIR Form 1701Q and BIR Form 0605
- Annual and Last Quarter Payment of Income Tax
Every April 15th
BIR Form 1701 (Annual Income Tax Return) and BIR Form 0605
Aside from these taxes, you also need to renew your COR every 30th of January. To learn how to calculate your freelance income taxes, visit this page.
Tax filing is now made convenient in the advent of the Internet. To file your taxes, visit the Electronic Filing and Payment System (eFPS). Meanwhile, payments can be made through Authorized Agent Banks (AABs).
Learn more about freelancer tax in the Philippines
For more information, check out BIR’s Tax Guide for Professionals. You can also get in touch with Duran & Duran-Schulze Law at [email protected] or (+632) 478 5826.