Returns and Payment of Tax

Lesson 4

 Taxpayers are required to use the new BIR forms, otherwise, the same will not be accepted by
Accredited Agent Banks (AABs) where the forms are supposed to be filed and taxes paid.
 The form should bear the correct form number and the latest revision date.
 Under the pay as you file system, the total amount of income tax due shall be paid at the time the return
is filed.
 Hence, the date prescribed for the filing of the return is the date prescribed for the payment of the tax
This rule does not, however, apply in the following cases:
1. Tax is withheld at source.
2. Tax is withheld on wages.
3 Tax period is terminated.
4. The corporation is contemplating dissolution, liquidation or reorganization.
5. There is deficiency assessment.
INCOME TAX RETURN FOR INDIVIDUALS
Income tax return is a sworn statement or declaration in which the taxpayer discloses the nature and extent of
his tax liability by formally making a report of his income and allowable deductions for the taxable year in the
prescribed form.

Who Shall File Income Tax Return Using BIR Form 1701
This return shall be filed by the following individuals 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 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.
4. An individual engaged in trade or business or in the exercise of their profession and receiving compensation
income as well.

 All individuals, estates and trusts above required under the law and existing issuances to file the return
should also fill up Part Ix of the new BIR Form 1701
 Married individuals shall file a return for the taxable year to include the income of both spouses,
computing separately their individual income tax based on their respective total taxable income

 The income of unmarried minors derived from property received from a living parent shall be included
in the return of the parent except when the donor's tax has been paid on such property or when the
transfer of such property is exempt from donors tax.
 If the taxpayer is unable to make his own return, the return may be made by his duly authorized agent or
representative or by the guardian, or other person charged with the care of his person or property.
 The principal and his representative or guardian shall assume the responsibility of making the return and
incurring penalties for erroneous, false or fraudulent returns.

 Who Shall File Income Tax Return Using BIR Form 1700
This return shall be filed 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,
except the following:

1. An individual whose gross compensation income does not exceed his total personal and additional
exemptions or P250,000.
2. An individual receiving purely compensation income, regardless of amount, from only one employer in the
Philippines for the calendar year, the income tax of which has been withheld correctly by the said employer (tax
due equals tax withheld): Provided, That an individual deriving compensation concurrently from two or more
employers at any time during the taxable year shall file an income tax return.
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 the 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).
4. A minimum wage earner or an individual who is exempt from income tax.

 Married individuals shall file a single return for the taxable year to include the income of both spouses,
separately computing their individual income tax based on their respective taxable income, which return
shall be signed by the tax filer or the spouse, or their authorized representative.
 Where it is impracticable for the spouses to file one return, each spouse may file a separate return.
 Individuals not required to file an ITR or those qualified for substituted filing may voluntarily file this
return for purposes of loans, foreign travel requirements and for other purposes they may deem proper.
 However, individuals other than those solely earning income as OFWs as defined in RR 1-2011 availing
of the benefits of special laws, such as, but not limited to the PERA Law are required to file an ITR.
 The term "individual whose compensation income has been subjected to final withholding tax" shall
include aliens or Filipino citizens occupying the same positions as the alien employees, as the case may
be, who are employed by regional operating headquarters, regional or area headquarters, offshore
banking units, petroleum service contractors and sub-contractors, pursuant to pertinent provisions of
Sections 25 (C), (D), (E) and 57(A), including those subject to Fringe Benefit Tax (FBT) under Section
33 of the Tax Code
SUBSTITUTED FILING OF INCOME TAX RETURNS BY EMPLOYEES RECEIVING PURELY
COMPENSATION INCOME
 Individual taxpayers receiving purely compensation income, regardless of amount, from only one
employer in the Philippines for the calendar year, the income tax of which has been withheld correctly
by the said employer (tax due equals tax withheld) shall not be required to file Annual Income Tax
Return for Individuals Earning Purely Compensation Income (BIR Form No. 1700). In lieu of BIR Form
No. 1700, the Certified List of Employees Qualified for Substituted Filing of ITR with information
regarding the name of compensation earner, TIN, compensation paid, tax due and tax withheld, filed by
the employer with the concerned BIR office and stamped "Received" by the latter shall be tantamount to
the substituted filing of ITRs by concerned employees.

The following individuals, however, are not qualified for substituted filing and therefore, still required to
file Income Tax Return in accordance with existing regulations:

(A) Individuals deriving compensation from two or more employers concurrently or successively at any time
during the taxable year.
(B) Employees deriving 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
(C)Individuals deriving other non-business, non-professional-related income in addition to compensation
income not otherwise subject to a final tax.
(D) Individuals receiving purely compensation income from a single employer, although the income tax of
which has been correctly withheld, but whose spouse falls under Section 2.83.4(A), 2.83.4(B) and 2.83.4(C) of
these regulations.
(E) Non-resident aliens engaged in trade or business in the Philippines deriving purely compensation income, or
compensation income and other non-business, non- professional-related income.

Substituted Filing of Individual ITR

 Substituted filing is when the employer's annual return (BIR Form 1604CF) may be considered as the
"substitute" Income Tax Return (ITR) of the employee inasmuch as the information provided in his
income tax return (BIR Form 1700) would exactly be the same information contained in the employer's
annual return (BIR Form 1604-CF).
  However, in cases covered by substituted filing, the employer shall furnish each employee with the
original copy of BIR Form 2316 and file/submit to the BIR the duplicate copy not later than February 28
following the close of the calendar year

INDIVIDUALS NOT REQUIRED TO FILE INCOME TAX RETURN PER REV. REG. 8-2018
IMPLEMENTING TRAIN
A. An individual earning purely compensation income whose taxable income does not exceed Two Hundred
Fifty Thousand pesos (P250,000);
The Certificate of Withholding filed by the respective employers, duly stamped "Received" by the Bureau, shall
be tantamount to the substituted filing of income tax returns by said employees.
B. An individual whose income tax has been correctly withheld by his employer, provided that such individual
has only one employer for the taxable year the Certificate of Withholding filed by the respective employers,
duly stamped "Received" by the Bureau, shall be tantamount to the substituted filing of income tax returns by
said employees;
C. An individual whose sole income has been subjected to final withholding tax;
D. A minimum wage earner as defined in these regulations The Certificate of Withholding filed by the
respective employers, duly stamped "Received" by the Bureau, shall be tantamount to the substituted filing of
income tax returns by said employees.

Mandatory Itemized Deductions

Individual taxpayers who are not entitled to avail of the OSD and thus use only the itemized deduction method
are the following
1. Those exempt under the Tax Code, as amended, and other special laws with no other taxable income [e.g,
Barangay Micro Business Enterprise (BMBE)
2. Those with income subject to special/preferential tax rates; and
3. Those with income subject to the income tax rate under Sec. 24 of the Tax Code, as amended, and also with
income subject to special/preferential tax rates.

BIR Form 1700 and 1701 - When and Where to File and Pay

1. For Electronic Filing and Payment System (eFPS) Taxpayer

 The return shall be e-filed and the tax shall be e-paid on or before the 15th day of April of each year
covering income for the preceding taxable year using the eFPS facilities thru the BIR website
http://www.bir.gov.ph.

2. For Non-Electronic Filing and Payment System (non-eFPs) Taxpayer

 The return shall be filed and the tax shall be paid on or before the 15th day of April of each year
covering income for the preceding taxable year with any Authorized Agent Bank (AAB) located within
the territorial jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered. In
places where there are no AABs, the return shall be filed and the tax shall be paid with the concerned
Revenue Collection Officer (RCO) under the jurisdiction of the RDO.
 Non-eFPS tax filer may opt to use the electronic format under "eBIRForms" (refer to www.bir.gov.ph)
for the preparation, generation and submission and/or payment of this return with greater ease and
accuracy.
 In case of "no-payment returns", the same shall be filed with the RDO where the taxpayer is
registered/has his legal residence or place of business in the Philippines or with the concerned RCO
under the same RDO.

3. For Installment Payment - When the tax due exceeds P2,000, the taxpayer may elect to pay in two equal
installments, the first installment to be paid at the time the return is filed and the second, on or before July 15 of
the same year.
4. For Non-Resident Taxpayer - In case taxpayer has no legal residence or place of business in the Philippines,
the return shall be filed with the Office of the Commissioner or Revenue District Office No. 39, South Quezon
City.

Excess Withholding Tax
Over-withholding of income tax on compensation shall be refunded by the employer except if the over
withholding is due to the employee's failure or refusal to file the withholding exemption certificate, or
supplies false or inaccurate information, the excess shall not be refunded but shall be forfeited in favor
of the government.

Required Attachments - BIR Form 1700

1. Certificate of Income Tax Withheld on Compensation (BIR Form 2316).
2. Waiver of the husband's right to claim additional exemption, if applicable.(before 2018)
3. Duly approved Tax Debit Memo, if applicable.
4. Proof of Foreign Tax Credits, if applicable.
5. For amended return, proof of tax payment and the return previously filed.
6. Proof of other tax payment/credit, if applicable.
7. Authorization letter, if filed by authorized representative.
Required Attachments - BIR Form 1701
1. Certificate of independent CPA duly accredited by the BIR (The CPA Certificate is required if the annual
gross sales, earnings, receipts or output exceed P 3,000,000).

2. Account Information Form (AIF) and/or Financial Statements (FS), including the following
schedules prescribed under existing revenue issuances which must form part of the Notes to
the Audited FS:
a) Taxes and Licenses
b) Other information prescribed to be disclosed in the Notes to FS
3. Statement of Management's Responsibility (SMR) for Annual Income Tax Return.
4. Certificate of Income Payments not subjected to Withholding Tax (BIR Form No. 2304).
5. Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307).
6. Certificate of Compensation Payment/Tax Withheld (BIR Form No. 2316).
7. Duly approved Tax Debit Memo, if applicable.
8. Proof of prior years' excess credits, if applicable.
9. Proof of Foreign Tax Credits, if applicable.
10. For amended return, proof of tax payment and the return previously filed.
11. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source
(SAWT), if applicable
12. Proof of other tax payment/credit, if applicable.
13. Authorization Letter, if filed by an authorized representative.
14. Waiver of husband's right to claim additional exemption, if applicable.(before 2018)

INCOME TAX RETURN FOR CORPORATIONS

 Who Shall File BIR Form 1702-RT
 This return shall be filed by corporation, partnership and other non-individual taxpayer subject only to
REGULAR income tax rate of 30%. Under CREATE Law 20% or 25%.
 Every corporation, partnership no matter how created or organized, 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 operations), government owned or controlled
corporations, agencies and instrumentalities shall render a true and accurate income tax return in
accordance with the provisions of the Tax Code.
 The return shall be filed by the president, vice-president or other principal officer, and shall be sworn to
by such officer and by the treasurer or assistant treasurer.
Who Shall File BIR Form 1702-EX
 This return shall be filed by a corporation, partnership and other non-individual taxpayer EXEMPT
under the Tax Code, as amended (Sec. 30 and those exempted in Sec. 27(C)] and other special laws with
no other taxable income such as but not limited to foundations, cooperatives, charitable institutions,
nonstock and non-profit educational institutions, general professional partnership (GPP) etc., otherwise
use BIR Form 1702- MX.
Who Shall File BIR Form 1702-EX
 Every GPP shall file this return setting forth the items of gross income and of deductions and the names,
TINs, addresses and share of its partners.

Who Shall File BIR Form 1702-MX

This return shall be filed by every corporation, partnership and other non-individual taxpayer with MIXED
income subject to multiple income tax rates or with income subject to special/preferential rate.

Mandatory Itemized Deductions

Corporations, partnerships and other non-individuals are mandated to use the itemized deductions in the
following cases:
1.Those exempt under the Tax Code, as amended (Sec. 30 and those exempted, under Sec. 27 (C)] and other
special laws, with no other taxable income;
2. Those with income subject to special/preferential tax rates; and
3. Those with income subject to income tax rate under Sec. 27 (A), and 28 (A) (1) of the Tax Code, as amended,
and also with income subject to special/preferential tax rates.
 Juridical entities whose taxable base is gross revenue or receipts (e.g, non-resident foreign international
carriers) are not entitled to the itemized deductions nor to the optional standard deduction (OSD) under
Sec. 34 (L) of the Tax Code, as amended.

BIR Form 1702-RT, 1702-EX and 1702-MX- When and Where to File and Pay
1. For Electronic Filing and Payment System (eFPS) Taxpayer
The return shall be e-filed and the tax shall be e-paid on or before the 15th day of the fourth month following
the close of the taxpayer's taxable year using the eFPS facilities thru the BIR website http://www.bir.gov.ph.
2. For Non-Electronic Filing and Payment System (non-eFPS) Taxpayer
 The return shall be filed and the tax shall be paid on or before the 15th day of the fourth month
following the close of the taxpayer's taxable year with any Authorized Agent Bank (AAB) located
within the territorial jurisdiction of the Revenue District Office (RDO) where the taxpayer's principal
office is registered. In places where there are no AABs, the return shall be filed and the tax shall be paid
with the concerned Revenue Collection Officer (RCO) under the jurisdiction of the RD0
 Non-eFPS tax filer may opt to use the electronic format under "eBIRForms" (refer to www.bir.gov.ph)
for the preparation, generation and submission and/or payment of this return with greater ease and
accuracy.
 In case of "no-payment returns", the same shall be filed with the RDO where the taxpayer’s principal
office is registered or with the concerned RCO under the same RDO.
Required Attachments - BIR Form 1702-RT

1. Certificate of independent CPA duly accredited by the BIR (The CPA Certificate is required it
2. Account Information Form (AIF) and/or Financial Statements (FS), including the following the gross
quarterly sales, earnings, receipts or output exceed P 150,000). schedules prescribed under existing revenue
issuances which must form part of the Notes to the Audited FS:
a) Taxes and Licenses
b) Other information prescribed to be disclosed in the Notes to FS

Part of the Notes to the Audited FS:

3. Statement of Management's Responsibility (SMR) for Annual Income Tax Return.
4. Certificate of Income Payments not subjected to Withholding Tax (BIR Form No. 2304).
5. Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307).
6. Duly approved Tax Debit Memo, if applicable.
7. Proof of prior years' excess credits, if applicable.
8. Proof of Foreign Tax Credits, if applicable.
9. For amended return, proof of tax payment and the return previously filed.
10. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source
(SAWT), if applicable.
11. Proof of other tax payment/credit, if applicable.

Required Attachments BIR Form 1702-MX

In addition to the above attachments, the Certificate of Tax Treaty Relief/Entitlement issued by the concerned
Investment Promotion Agency (IPA) shall be provided.

Required Attachments - BIR Form 1702-EX

 In addition to the above attachments, the Schedule of Returns filed by General Professional Partnership
shall be provided.
 If a corporation claimed 40% of the gross income as optional standard deduction (OSD), it is still
required to submit its financial statements when it files its annual income tax return and to keep such
records pertaining to its gross income (RR 2-1010, Feb. 18, 2010).
 A corporation may employ either calendar year or fiscal year as basis for filing its annual income tax
return. This basis, however, cannot be changed without prior approval from the Commissioner

Returns of General Professional Partnerships

 Every general professional partnership shall file a return of its income except income exempted by law,
showing the items of gross income and of deductions allowed; and the names, TIN, addresses and shares
of each of the partners.
 General professional partnerships as such are not subject to income tax.
 It is the partners who are liable for income tax in their separate and individual capacities.
 The partner shall report as gross income his distributive share, actually and constructively received from
the net income of the partnership
 The general professional partnership is not required to file quarterly income tax return/quarterly
information return.
 It is required, however, to file annual income tax return/annual information return (Form 1702-EX) with
audited financial statements.
 Per Revenue Regulations 2-2010, a taxpayer who elected to avail of the optional standard deduction
(OSD) shall signify in the return such intention; otherwise, itemized deductions will be considered.
 Once the election to avail of the OSD or itemized deduction is signified in the return, it shall be
irrevocable for the taxable year for which the return is made.
 The election to claim either the OSD or the itemized deduction for the taxable year must be signified by
checking the appropriate box in the income tax return filed for the first quarter of the taxable year
adopted by the taxpayer.
 An individual taxpayer who is entitled to and claimed the OSD shall not be required to submit with his
tax return such financial statements otherwise required under the Code But, the taxpayer shall keep such
records pertaining to his gross sales or gross receipts.

eFPS AND eBIRForms

 Revenue Memorandum Circular 61-2012, Revenue Memorandum Order 24-2013, Revenue Regulations
6-2014 and 5-2015, Revenue Memorandum Circular 19-2015 provide guidance on the implementation
of the electronic platform in filing tax returns through the eFPS or the eBIRForms for filing ITRs for
calendar year 2014.
There are two BIR electronic platforms available for filing tax returns:
1. eFPS
2. eBIRForms

Electronic Bureau of Internal Revenue Forms (eBIRForms) refers to the two types of electronic services (e-
Services) provided by the BIR for the preparation, generation, and submission of tax returns, which are the
following:

1. Offline eBIRForms Package also known as Offline eBIRForms Package, is a tax preparation software that
allows the taxpayer and Accredited Tax Agent (ATA) to accomplish or fill out tax forms offline.
It is an alternative mode of preparing tax returns that deviates from the conventional manual process of filling
out tax returns on pre-printed forms, which is highly susceptible to human error.

Online eBIRForms System - is a filing infrastructure that accepts tax returns submitted online and automatically
computes penalties for tax returns submitted beyond due date.
The System creates secure user accounts thru enrollment for use of the online System, and allows ATAs to file
on behalf of their clients.

The System also has a facility for Tax Software Providers (TSPs) to test and certify the data generated by their
tax preparation software (certification is by form).
It is capable of accepting returns data filed using certified TSP's tax preparation software.

Taxpayers/ATAS can directly encode data, validate, edit, save, delete, view and print the tax returns.
The form package has automatic computations and has the capability to validate information inputted by the
taxpayers/ATASs.

The following are mandated to use eFPS:

Taxpayer Account Management Program (TAMP) Taxpayers;

1.Accredited and prospective importers required to secure the BIR Importer's Clearance
2.Certificate (BIR-ICC) and BIR Broker's Clearance Certificate (BIR-BCC);
3. National Government Agencies (NGAs);
4.All Licensed Local Contractors;
5. Enterprises enjoying fiscal incentives (PEZA, BO1, Various Zone Authorities, etc.);
6. Top 5,000-10,000 Individual Taxpayers;
7. Corporations with Paid-Up Capital Stock of P10 Million and above;
8. Corporations with a complete computerized accounting system (CAS);
9. Procuring Government Agencies with respect to Withholding of VAT and Percentage Taxes;
10. Government Bidders;
11. Insurance companies and stock brokers;
12. Large taxpayers;
13. Top 20,000 private corporations.

The following are mandated to use eBIRForms and eFile:

1. Accredited tax agents, practitioners and all their client-taxpayers who have authorized them to file on their
behalf;
2. Accredited printers of principal and supplementary receipts/invoices;
3. One-Time Transaction (ONETT) taxpayers;
4. Those engaged in business, or those with mixed income (both compensation and business income) who shall
file a "No Payment" Return;
5. Government-Owned or Controlled Corporations (GOccs);
6. Local Government Units (LGUs), except barangays;
7. Cooperatives, registered with National Electrification Administration (NEA) and Local Water Utilities
Administrations (LWUA).

Client-Taxpayers refers to taxpayers who are otherwise authorizing their tax agents or practitioners to file on
their behalf.
Thus, client-taxpayers whose tax agents/practitioners only sign the audit certificate but have no authority to file
the returns on their behalf are not covered by the mandatory requirement to use eBIRForms.

The following are exempted from the mandatory use of eBIRForms and electronically filing "No
Payment Returns":

1. Senior Citizens (SCs) or Persons with Disability (PWDs) filing their own returns;
2. Employees deriving purely compensation income whether from one or more employers, whether or not they
have any tax due that has to be paid;
3. Employees qualified for substituted filing under RR 2-98, Sec. 2.83.4, as amended, but who opted to file an
ITR and are filing for purposes of promotion (PNP/AFP), loans, scholarship, foreign travel requirements, etc.

 Only taxpayers previously enumerated are required to file electronically.

 Other taxpayers, such as Micro Small Medium Enterprises (MSMEs), which are filing their own returns
and have tax payments due, are not required to file electronically, but can voluntarily enroll and file
using either the eFPS/eBIRForms electronic platforms of the BIR.
 RDOs and AABs should continue to accept manually filed returns for calendar year 2014 (either printed
BIR Forms or generated forms from the Offline eBIRForms).
 Taxpayers who are mandated to use the eFPS and eBIRForms but continue to file manually, shall be
subject to the P1,000 penalty per return pursuant to Sec. 250 of the Tax Code, and 25% surcharge for
wrong venue under RR 5-2015.

LARGE TAXPAYERS
 Revenue Regulations 17-2010, issued Nov. 16, 2010, states that a Large Taxpayer (LT) is a taxpayer,
regardless of its location in the country, which has been classified and notified in writing by the CIR as
one that has satisfied the criteria for determining large taxpayers.
 Taxpayers classified and notified as Large Taxpayers by the CIR shall continue as such, and shall be
covered by these Regulations, unless notified by the CIR in writing of its delisting. The following
taxpayers shall be automatically classified as candidate to be a Large Taxpayer and will be notified in
writing as such by the CIR:
a. All branches of a taxpayer under the Large Taxpayers Service;
b. Subsidiaries, affiliates and entities of conglomerates/group of companies of a large taxpayer initially listed as
of the effectivity of this Regulations;
c. The surviving company, in case of merger/consolidation involving a large taxpayer;
d. Any corporation that absorbs the operation/business in case of spin-off/s of any large taxpayer;
e. Corporations with an authorized capitalization of at least P300 million registered with the Securities and
Exchange Commission (SEC);
f. Multinational enterprises (MNEs) with an authorized capitalization or assigned capital of at least P300
million;
g. Publicly-listed corporations;
h. Universal, Commercial and foreign banks;

The Regular Banking Unit (RBU) and the Foreign Currency Deposit Unit (FCDU)/Offshore Banking Unit
(OBU) of a bank shall be considered as one taxpayer for purposes of classifying it as a Large Taxpayer, even if
the said units are assigned different Taxpayer Identification Numbers (TINs).

i. Taxpayers with an authorized capitalization of at least P100 million belonging to the following industries:
banks, insurance, telecommunication, utilities, petroleum, tobacco and alcohol.
j. Corporate taxpayers engaged in the production of metallic minerals.
In addition to the taxpayers enumerated above, a taxpayer shall be classified as candidate to be a Large
Taxpayer and will be notified in writing as such by the CIR if it satisfies any or a combination of the following
criteria:

1. As to tax payment

a. Value-Added Tax (VAT). Any taxpayer with net VAT paid or payable of at least P200,000 per quarter for the
preceding year;
b. Excise Tax. Any taxpayer with annual excise tax paid or payable of at least P1 million for the preceding year;
c. Income Tax. Any taxpayer with annual income tax paid or payable of at least P1 million for the preceding
year;

d. Withholding Tax. Any taxpayer with annual withholding tax payment/remittance for all kinds of withholding
taxes (i.e. on compensation, expanded, final and government money payment) of at least Pl million. For
taxpayers, business establishments and government offices with branches/units, the basis is the total annual
taxes withheld by the Head Office and all the branches/units;
e. Percentage Taxes. Any taxpayer with percentage taxes of at least P200,000 per quarter for the preceding year;
f. Documentary Stamp Taxes. Any taxpayer with aggregate annual documentary stamp taxes of at least P1
million; or

2. As to financial condition and results of operations:

a. Gross Sales/Receipts. Any taxpayer with total annual gross sales/receipts of P1 billion for the preceding year;
b. Net worth. Any taxpayer with a total net worth at the close of each calendar or fiscal year of at east P300
million;
c. Gross Purchases. Any taxpayer with total annual gross purchases of at least P800 million for the preceding
year;
d. Top corporate taxpayers listed and published by the Securities and Exchange Commission (SEC)

Taxpayers already classified and notified as Large Taxpayer by the ClIR are mandatorily covered by the
Electronic Filing and Payment System (eFPS) in filing and paying their internal revenue tax liabilities,
including the accompanying schedules and attachments as prescribed under existing revenue issuances.

All existing LTs must have adopted, and be maintaining, a working and duly accredited Computerized
Accounting System (CAS) by Dec. 31 2010. Newly identified LTs, on the other hand, must have adopted, and
secured the accreditation of, the required CAS within 6 months after having been officially notified, in writing,
of their status as LTs.

Revenue Regulations 1-2010 requires the filing of returns and payment of taxes through the eFPS on the part of
enterprises enjoying fiscal incentives granted by other government agencies such as those registered with the:

(i) Philippine Economic Zone Authority;

(ii) Board of Investments;
(iii) various zone authorities covered under Republic Act 9400 (Subic Special Economic Zone, Clark Special
Economic Zone and Clark Freeport Zone, Poro Point Freeport Zone, Morong Special Economic Zone, John Hay
Special Economic Zone);
(iv) Cagayan Special Economic Zone Authority;
(V) Export Development Council;
(vi) Tourism Infrastructure and Enterprise Zone Authority; and
(vii) PHIVIDEC Industrial Authority.
All licensed local contractors are hereby required to enrol themselves to the Bureau of Internal Revenue's
Electronic Filing and Payment System (eFPS). The enrolment should be done at the Revenue District Office
(RDO) where the local contractors are registered as taxpayers (RR 10-2012, June 1, 2012).

The Top 10,000 Individual Taxpayers engaged in trade or business or practice of a profession are required to
file returns and remit the taxes withheld thru the eFPS (RR 6 2009, June 3, 2009).

The following non-large taxpayers including their branches located in the computerized revenue district offices
shall file their returns and pay their taxes thru eFPS, to wit: (i) the volunteering 200 or more non-large
taxpayers;

(i) Non-large taxpayers belonging to the top 20,000 private corporations duly identified under RR 14-2008 and
notified by the Commissioner as such shall make use of the eFPS in filing their returns and in paying their taxes
due. Returns of said non-large taxpayers shall include those of their branches, provided, they are located in the
computerized revenue district offices. The provisions shall apply to returns to be filed starting April 1, 2009
(RR 3-2009, Feb. 9, 2009).

The following are also required to file returns and remit the taxes withheld thru the eFPS: (i) corporations with
paid-up capital stock of P10 million and above;

(i) corporations with complete computerized system; and

(ii) all government bidders pursuant to Executive Order 398 as implemented by RR 3-2005. It, should be
emphasized, however, that non-stock non-profit corporations are excluded from this coverage (RR 3-2009, July
18, 2007).

Per Revenue Regulations 1-2013, National Government Agencies (NGAs) are mandatorily required to use the
electronic tax remittance advice (eTRA) in so far as remittance of withheld VAT and business tax is concerned.

FILING OF RETURNS AND PAYMENT OF TAXES BY LARGE TAXPAYERS

Where to File and Pay
All Large Taxpayers shall electronically file (e-file) all internal revenue tax returns, including other required
documents, and electronically pay (e-pay) taxes due thereon thru Electronic Filing and Payment System (eFPS)
pursuant to existing revenue issuances.

All information returns, declarations, documents and other attachments to such returns required to be filed,
including the Summary List of Sales and Purchases (SLSP), Summary List of Importation (SLI), Summary
Alphalist of Withholding Tax Agents (SAWT), Monthly Alphalist of Payees (MAP), Alphalist of Regular
Suppliers, Inventory List, etc. shall be in electronic submission (e-submission)/electronic attachment (e
attachment) in the prescribed format under existing revenue issuances.
This constitutes an exception to the place of filing and payment as provided for in Sections 58, 17, 81, 114, 128,
130 and 200 of the NIRC.

Modes of Payment

INSTALLMENT PAYMENT OF INDIVIDUAL INCOME TAX PER REV. REG. 8-2018 IMPLEMENTING
TRAIN
When the tax due is in excess of Two thousand pesos (P2,000), the individual may elect to pay the tax in two
(2) equal installments, in which case, the first installment shall be paid at the time the annual income tax return
is filed and the second installment paid on or before October 15 following the close of the calendar year.

If any installment is not paid on or before the date fixed for its payment, the whole amount of the unpaid tax
becomes due and payable, together with the delinquency penalties to be reckoned on the original date when the
tax is required to be paid.
Payments may be made only through any or a combination of the following modes:
a. Bank Debit Memo/Advice, Electronic Fund Transfer Instruction Scheme (EFTISs) against the taxpayers
account with any of the eFPS Authorized Agent Banks (AABs);

Tax Debit Memo (TDM) applied by the taxpayer against the unutilized portion of duly issued Tax Credit
Certificate (TCC) for payment of all internal revenue taxes, except for withholding taxes, availment of tax
amnesty, deposits on withdrawal of excisable articles, internal revenue taxes not being collected or administered
by the BIR and compromise penalties

When to File and Pay Income Tax

Corporate Large Taxpayers shall e-file Quarterly Income Tax Returns (BIR Form 1702Q), and e-pay the taxes
due thereon, not later than sixty (60) days from the close of each of the first three (3) quarters of the taxable
year, whether calendar or fiscal.

Annual Income Tax Return shall be e-filed and e-paid on or before the fifteenth (15th)day of the fourth (4th)
month following the close of the calendar or fiscal year, as the case may be, in accordance with Sections 75, 76
and 77 of the NIRC.

Corporate taxpayers with Improperly Accumulated Earnings Tax (before 2018-BIR Form 1704), shall e-file and
e-pay within fifteen (15) days after the close of the year immediately succeeding taxpayer's covered taxable year

TIME OF FILING OF INDIVIDUAL INCOME TAX RETURN PER REV. REG. 8-2018
IMPLEMENTING TRAIN
Individuals engaged in business/practice of profession, regardless of amount of sales/receipts, are required to
file quarterly income tax return on or before May 15, August 15 and November 15 for the first, second and third
quarters of the current year, respectively pursuant to Section 74(A) of the Tax Code, as amended;
and to file an annual income tax return, not later than the fifteenth (15th) day of the fourth month following the
close of the calendar year or April 15 as provided under Section 51(C(1) of the Tax Code, as amended.

Individual Taxpayers, who may, in the future, be classified as Large Taxpayers and notified by the CIR of their
status as such, shall e-file and e-pay a Quarterly Income 1ax Returns (BIR Form 1701Q) according to the
following schedules:

15 Apr.
1st Quarter on or before April 15 of the current taxable year,
15 Aug.
2nd Quarter on or before August 15 of the current taxable year,
15 Nov.
3rd Quarter on or before November 15 of the current taxable year.

Annual Income Tax Return (BIR Form 1701) shall be e-filed and e-paid on or before April 15 of the following
calendar year, in accordance with Section 74 (B) of the NIRC.
The accompanying schedules and attachments on the tax returns above-mentioned, shall be e-attached/e-
submitted, following the file format prescribed under existing revenue issuances.

Withholding Tax Remittance and Information Returns

All withholding taxes for remittance by the Head Office and/or all branches/units of a Large Taxpayer shall be
e-filed in a consolidated return within 10 days following the end of each month for January to November, and
on or before January 15 of the following year for the month of December, using BIR Form 1601-C, 1601-E,
1601-F and 1602, respectively, on a staggered basis according to the classification of industry pursuant to
existing issuances.
For the e-payment, the taxpayer shall give instruction to the AAB to debit its account for the amount of tax
payable on or before the due date for payment thereof as prescribed under the prevailing/applicable
laws/regulations.

Quarterly Remittance Return of Final Income Taxes Withheld (On Fringe Benefits Paid to Employees Other
than Rank and File) (BIR Form 1603) shall be e-filed and e-paid on or before the fifteenth (15th) day of the
month following the calendar quarter.

Annual Information Return of Income Tax Withheld on Compensation and Final Withholding Taxes (BIR Form
1604-CF) shall be e-filed on or before January 31 of the succeeding year together with the required
Alphabetical List of Employees
The Annual Information Return of Creditable Income Taxes Withheld (Expanded)/lncome Payments Exempt
from Withholding Taxes (BIR Form 1604-E) shall be e-filed not later than March 1 of the following the year in
which payments were made, together with the required Alphabetical List of Payees

The required Alphalists attached to the returns shall be e- submitted/e-attached using the prescribed file format
in RMC 5-2009.
The accompanying schedules and attachments on the above-mentioned tax returns shall be e-attached/e-
submitted with the information required under RR 2-2006 and RMC 3-20o06, following the file format
prescribed under existing revenue issuances.