JUANITA C.

LEVISTE-GALLEVO
Certified Public Accountant
1415B Wack Wack Twin Towers, Wack Wack Greenhills East, Mandaluyomg City
Mobile No.: +63 (917) 572-1706
Email Address: nitzlgallevo@yahoo.com/nitzgallevo@yahoo.com

A Brief Overview of BIR Filing Rules for

Philippine Corporations Businesses
Upon registering your corporation, branch office or business with the Philippine Bureau of Internal Revenue
(BIR), you will be required to attend a seminar that will orient you on your company’s basic tax obligations in the
Philippines.
While most corporation owners would send their accountants to this seminar rather than attend it themselves, it
is wise and prudent for you to be aware of the information given there as well. So here, in a nutshell, are the basic rules
of Philippine tax filing that you, as a business owner, should know.

What to pay
1. Sales tax. There are two kinds of businesses in the Philippines: value added tax (VAT) payers and percentage tax
payers, or non-VAT.
VAT payers are required to pay monthly and quarterly sales taxes equivalent to 12% of their gross sales, while non-VAT
payers pay 3% monthly.

When to pay: on or before the 20th day of the following month (monthly) and the 25th day after the close of the
quarter (when applicable)
Forms to use: 2551-M (monthly) for non-VAT; 2550-M (monthly) and 2550-Q (quarterly) for VAT

Who are Required to File VAT Returns

 Any person or entity who, in the course of his trade or business, sells, barters, exchanges, leases goods or
properties and renders services subject to VAT, if the aggregate amount of actual gross sales or receipts
exceed One Million Nine Hundred Nineteen Thousand Five Hundred Pesos (P1,919,500.00).
 A person required to register as VAT taxpayer but failed to register
 Any person, whether or not made in the course of his trade or business, who imports goods

2. Income taxes withheld at source. Businesses are required to withhold taxes from their building lessors (5% of total
monthly rent), hired freelancers (10–15% for professionals and 2% for subcontractors), and regular employees (rates
depend on salary), and remit these taxes to the BIR every month. The BIR Form 2307 should be issued to these
withholdees to serve as their proof of creditable income tax withheld at source.

When to remit: on or before the 10th day of the following month

Forms to use: 1601-C (compensation) for employees; 1601-E (expanded) for lessors and freelancers

3. Income tax. As a general rule, income tax rates for corporations in the Philippines are at 30% of net taxable income,
while the optional standard deduction rate, which can be used in lieu of itemized deductions, is 40% of the company’s
gross income.
However, several conditions, such as BOI or PEZA registrations, special tax treatises, etc., may significantly lower the
amount of taxes due from a corporation. Our company can guide you on what steps to take to legally minimize your
company’s tax duties in the Philippines.
When to pay: on or before May 30 (q1), August 29 (q2), November 29 (q3), and April 15 (annual)
Forms to use: 1702-Q (quarterly) and 1702-RT (annual)

4. Registration fee. This is a ₱500 fee that needs to be paid every year as a renewal of one’s BIR registration.
When to pay: on or before January 31

Form to use: 0605 (payment form)

 If the deadlines for filing fall on a holiday or weekend, then your company may still file and pay without incurring
penalties on the next working day.

Additional notes
The deadlines listed above are for manual payers only. Users of the eFiling and Payment System (eFPS) usually
have their due dates set one to five days after the manual payers, depending on the industry that their business is
engaged in. The companies that are required to use the eFPS include corporations with paid-up capital stocks of at least
₱10 million pesos, taxpayers with computerized accounting systems, PEZA members, and BOI-certified companies.

Payments should be made at authorized agent banks within the revenue district under which your business is registered.
Payments made in banks outside your own revenue district will be subject to 25% penalty.