INCOME TAXATION

INCOME TAX COMPLIANCE REQUIREMENTS

UNIT 6

Objectives:
 Familiarize the rules for compliance requirements for the income tax of individual taxpayers;
 Familiarize BIR forms and pertinent filing deadlines the said forms; and
 Prepare and filled-up the annual income tax return (BIR Form 1701) of individual taxpayers correctly.

Keeping of Books of Accounts

All persons, partnerships, corporations or companies required by law to pay internal revenue taxes shall keep and use
relevant and appropriate set of bookkeeping records.
Those whose gross annual gross sales, earnings, receipts or output exceeding three million pesos (P3,000,000.00), shall
have their books of accounts and financial statement audited and examined yearly by independents Certified Public
Accountant (CPA).

Registration Requirements
All persons, partnerships, corporations or companies subject to internal revenue taxes shall register with the appropriate
Revenue District Officer:
1. Employees: within 10 days from the date of employment
2. Self-employed individuals, professionals, estates and trusts and their branches, if any; branches of corporations: on or
before commencement of business
3. Corporations (whether taxable or not): before payment of any tax due
4. Partnerships, associations, cooperatives, government agencies and instrumentalities (GAIs), GOCCs, local government
units (LGU): before and upon filing of a return, statement or declaration as required by the Tax Code.

Annual Registration Fee

An annual registration fee of P500.00 for every separate or distinct establishment or place of business shall be paid upon
registration and every year thereafter on or before January 31 by every person, partnership, corporation or company
subject to internal revenue taxes. The following shall be exempt from the payment of the annual registration fee:
1. Cooperatives duly registered with the Cooperative Development Authority (CDA);
2. Individuals earning purely compensation income (employed locally or abroad);
3. Overseas Filipino Workers;
4. GAIs, in the discharge of their governmental functions;
5. Marginal income earners;
6. LGUs, in the discharge of their governmental functions;
7. Tax exempt persons enumerated under section 30 of the Tax code;
8. Non-stock, non-profit organizations not engaged in business;
9. Persons subject to tax under one-time transactions; and
10.Facilities where no sales transaction occur.

Transfer and Cancellation of Registration

In case a registered person decides to transfer his registered address or business address (e.g. principal/head office and
branches), he must inform the Revenue District Office (RDO) where he is registered by filing the prescribed BIR form
specifying therein the complete address where he intends to transfer.
The registration of any person who ceases to be liable to a certain tax shall be canceled upon filing with the RDO where
he is registered, an application for registration information update in a form prescribed by the BIR.

Issuance of Receipts or Sales or Commercial Invoices

All persons subject to internal revenue taxes shall at the point of each sale and transfer of merchandise or for services
rendered valued at 100.00 or more, shall issue duly registered receipts or sale or commercial invoices.
Additional Provisions:
 Within five years from the effectivity of the Act and upon establishment of a system capable of storing and processing
the required data, taxpayers engaged in the export of goods and services, e-commerce, and under the jurisdiction
of the Large Taxpayers Service are required to issue electronic receipts or sales or commercial invoices in lieu of
manual receipts or sales or commercial invoices.
 Taxpayers not required to issue electronic receipts or sales or commercial invoices may opt to do so.
 Digital records must be kept in the place of business for a period of three years.

Barangay Micro Business Enterprises (BMBE)

Micro Business Enterprises or BMBEs refer to any business enterprise engaged in the production, processing or
manufacturing of products or commodities, including agro-processing, trading and services (excluding practice of a
licensed profession), whose total assets including those arising from loans but excluding the land on which the office,
plant or equipment resides, should not be more than 3 million pesos.
Under the R.A. 9178, otherwise known as the Barangay Micro Business Enterprises law, BMBEs are exempted from income
tax arising from the registered BMBEs operations. These exemptions are granted to encourage business activities and
thus, boost the economic development of the country.
The BMBEs must register to obtain a certificate as a BMBE with the Office of the City or Municipal Treasurer. The said
certificate is valid only for two years subject for renewal.

BIR Forms
Below is a matrix of BIR Forms available to taxpayers in filing to the Bureau of Internal Revenue:
BIR
Name Description Filing Date
Form
Every time a tax payment or
To be accomplished every time a taxpayer
penalty is due or an advance
pays taxes and fees which do not require
payment is made
the use of a tax return such as second
Upon payment of annual
0605 Payment Form installment payment for income tax,
registration fee for a new
deficiency tax, delinquency tax, registration
business and for renewals on
fees, penalties, advance payments, deposits,
or before January 31 of every
installment payments, etc.
year.
Payment Form Under Tax
Shall be used in paying penalties assessed
Compliance Verification Shall be accomplished every
0613 under the Tax Compliance Verification
Drive/Tax Mapping time a penalty is due
Drive/Tax Mapping.
Description
Monthly Remittance Shall be filed in triplicate by every On or before the tenth (10th)
Return of Income Taxes Withholding Agent (WA)/Payor required to day of the following month
1601-C
Withheld on deduct and withhold taxes on compensation in which withholding was
Compensation paid to employees. made
Annual Information Shall be filed by every employer or On or before January 31 of
Return of Income Taxes withholding agent/payor (private or public the year following the
1604-C
Withheld on agency), local government unit and other calendar year in which the
Compensation juridical entity required to deduct and compensation payment and

Annual Information
Return of Creditable
Income Taxes Withheld
1604-E
(Expanded)/ Income
Payments Exempt from
Withholding Tax
Annual Information
Return of Income
1604-F
Payments Subjected to
Final Withholding Taxes
Annual Income Tax
Return For Individuals
Earning Purely
1700 Compensation Income
(Including Non-
Business/Non-Profession
Related Income)
Annual Income Tax
Return For Individuals
1701
(including MIXED Income
Earner), Estates and Trusts
Quarterly Income Tax
Return For Self-Employed
1701Q Individuals, Estates and
Trusts
Description
Annual Income Tax
Return for Individuals
Earning Income PURELY
from Business/Profession
(Those under the
1701A
graduated income tax
rates with OSD as mode
of deduction OR those
who opted to avail of the
8% flat income tax rate)
withhold taxes on compensation paid to other income payments were
employees. paid or accrued.
Shall be filed by every withholding
On or before March 1 of the
agent/payor (private or public agency),
year following the calendar
local government unit and other juridical
year in which the income
entity required to deduct and withhold
payments subject to expanded
taxes on income payments subject to
withholding taxes or exempt
Expanded Withholding Taxes, or making
from withholding tax were
income payments not subject to
paid or accrued.
withholding tax but subject to income tax
Shall be filed by every withholding
agent/payor required to deduct and On or before January 31 of
withhold taxes on income payments subject the year following the
to Final Withholding Tax. The tax rates and calendar year in which the
nature of income payments subject to final income payments subject to
withholding taxes are printed in BIR Form final withholding taxes were
Nos. 1601-FQ, 1602Q and 1603Q paid or accrued
respectively
Shall be filed by every resident citizen
Shall be filed on or before
deriving compensation income from all
April 15 of each year
sources, or resident alien and non-resident
covering income for the
citizen with respect to compensation
preceding taxable year.
income from within the Philippines
Shall be filed by individuals who are
engaged in trade/business or the practice of Shall be filed on or before
profession including those with mixed April 15 of each year
income (i.e., those engaged in the covering income for the
trade/business or profession who are also preceding taxable year.
earning compensation income).
 1st QTR - On or before May
15 of the current taxable
year
This return shall be filed in triplicate by the  2nd QTR - On or before
following individuals regardless of amount August 15 of the current
of gross income taxable year
 3rd QTR - On or before
November 15 of the current
taxable year
Shall be filed by individuals earning income
PURELY from trade/business or from the
practice of profession, to wit:
A. Those subject to graduated income tax
Shall be filed on or before
rates and availed of the optional
April 15 of each year
standard deduction as method of
covering income for the
deduction, regardless of the amount of
preceding taxable year.
sales/receipts and other non-operating
income; OR
B. Those who availed of the 8% flat income
tax rate whose sales/receipts and other
 non-operating income do not exceed
P3M
Shall be filed in triplicate by the following
taxpayers;
1. A VAT-registered person; and
2. A person required to register as a VAT
Shall be filed not later than
taxpayer but failed to register.
the 25th day following the
Quarterly Value-Added This return/declaration must be filed by the
2550Q close of each taxable quarter
Tax Return aforementioned taxpayers for as long as the
(i.e. Calendar quarter of Fiscal
VAT registration has not yet been cancelled,
Quarter)
even if there is no taxable transaction
during the month or the aggregate
sales/receipts for any 12-month period did
not exceed the P1,500,000.00 threshold.
Shall be filed in triplicate by the following:
1. Persons whose gross annual sales and/or
receipt do not exceed P1,500,000 and
who are not VAT-registered persons;
2. Domestic carriers and keepers of
garages, except owners of bancas and
owners of animal-drawn two wheeled
vehicle;
3. Operators of international air and
shipping carriers doing business in the
Philippines; Not later than the 20th day
Monthly Percentage Tax
2551M 4. Franchise grantees of gas or water following the end of each
Return
utilities; month
5. Franchise grantees of radio and/or
television broadcasting companies whose
gross annual receipts of the preceding
year do not exceed Ten Million Pesos
(P10,000,000.00) and did opt to register
as VAT taxpayers;
6. Banks, non-bank financial intermediaries
and finance companies;
7. Life insurance companies; and
8. Agent of foreign insurance companies.
Shall be filed in triplicate by the following:
1. Persons whose gross annual sales and/or
receipts do not exceed P 3,000,000 and
who are not VAT-registered persons;
2. Domestic carriers and keepers of
garages, except owners of bancas and
Shall be filed and the tax paid
Quarterly Percentage Tax owners of animal-drawn two wheeled
within twenty five (25) days
2551Q Return vehicle;
after the end of each taxable
Description 3. Operators of international air and
quarter.
shipping carriers doing business in the
Philippines;
4. Franchise grantees of gas or water
utilities;
5. Franchise grantees of radio and/or
television broadcasting companies whose
 gross annual receipts of the preceding
year do not exceed Ten Million Pesos (P
10,000,000) and did not opt to register as
VAT taxpayers;
6. Franchise grantees sending overseas
dispatch, messages or conversations
from the Philippines;
7. Proprietors, lesses or operators of
cockpits, cabarets, night or day clubs,
boxing exhibitions, professional
basketball games, jai-alai and racetracks;
8. Banks, non-bank financial intermediaries
and finance companies;
9. Life insurance companies; and
10. Agents of foreign insurance companies.

The Annual Income Tax Return (ITR)

At the end of the reporting period, usually at an annual period (e.g. fiscal or calendar), the taxpayer reports the results of
his operations to the BIR (Bureau of Internal Revenue) who is the agency of the government to administer all matters
pertaining to Income taxation.
The system of collection In the Philippines is known as the “self-assessment system”. Under the this system, the taxpayer
calculates the tax by himself or through an accountant, fills-up his tax return, files it with the proper tax office, and pays
the tax due thereon upon filing.
For income taxation purposes, the Annual Income Tax Return (ITR) which refers to the document submitted by the
taxpayer to the BIR for substantial compliance. It summarizes all the income and the allowed deductions; the income tax
due after deduction; the quarterly income tax paid; and the withholding tax, as required by the Tax Code.
The ITR must be filed with an authorized agent bank, Revenue District Office, Collection agent or duly authorized
treasurer of the city or municipality where the individual legally resides or principal place of business in the Philippines
or if there is no legal residence or principal place of business in the Philippines, with the office of the Commission of the
BIR.

Who are required to file the ITR?

1. Resident Filipino citizens;
2. Non-resident Filipino citizens, concerning their income earned within Philippines;
3. Domestic Corporations who are not exempt from the payment of income tax;
4. Domestic Corporations who are exempt from the payment of income tax (but had not complied and secured a proof
of exemption). These corporations are required to file an ITR, but is not required to pay the income tax;
5. Partnerships which are not considered general professional partnerships (GPPs)

Who are not required to file the ITR?

1. Individuals who are exempted from the payment of income tax;
2. Individuals whose only income had been subjected to final withholding tax;
3. Individuals earning purely compensation income whose employers are withholding the correct amount of taxes or
under the Revenue regulation 3-2002 known as the “substituted filing” of income tax return by employees receiving
purely compensation income.

Additional Provisions for filing an ITR under the TRAIN Law

For persons and individuals, the ITR shall consist of a maximum of four pages in paper or electronic form containing only
the following information:
1. Persona profile and information;
2. Total gross sales, receipts from compensation of services rendered, conduct of trade or business, or the exercise of a
profession, except income subject to final tax as provided under the Tax Code;
3. Allowable deduction under the Tax Code;
4. Taxable income as defined in the Tax Code;
5. Income tax due and payable.

Declaration of Income Tax for Individuals

Self-employed individuals and Professionals (SEP) are required to file a declaration of their estimated income tax on or
before May 15 of the current taxable year. The amount of the estimated income tax is required to be paid in four
installment as follows:
· First installment - At the time of declaration
· Second installment - August 15
· Third installment - November 15
· Fourth installment - On or before May 15 of the following calendar year when the final
adjustment of the income tax return is due to be filed

Amendment of the Annual Income Tax Return

An individual taxpayer may amend the income tax return filed any day within three years from the date of filing or from
the last date of the prescribed filing of the income tax, provided that the taxpayer had received no notice for tax
audit/examination, assessment and demand has actually been served to the taxpayer in the meantime.

__________________________________________________ ___END OF NOTES______________________________________________________________

Income Taxation
Lecture on Filling-up Annual Income Tax Return (1701)
The following information relates to the various income and expenses of Dennis B. Magallano for the
Taxable year 2019. Dennis is a CPA and works as an Accountant in a private manufacturing company. He
also owns various bookkeeping firm and a merchandind business in San Isidro, Tomas Oppus, So. Leyte
Annual Gross Salary P 360,000.00
SSS, Philhealth & Pag-Ibig Benefits 13,320.00
Representation & Transportation Allowance 60,000.00
Monetized Value of 14-days un-used leave credits 16,142.00
13th Month Pay & Other Bonuses 93,600.00
Net Sales from Merchandising Business 528,990.00
Net Receipts from the practice of profession (net of 10% withholding tax) 423,000.00
Cost of Sales from Merchandising Business 238,046.00
Cost of Service from practice of Profession 190,350.00
Salaries Expense 78,986.00
Utilities Expense 45,670.00
Depreciation Expense 29,900.00
Rent Expense 24,000.00
Representation Expense 7,880.00
Family expenses (with substantiation or receipts) 13,339.00
Transportation Expenses (only 1,260.00 has substantation or receipts) 3,260.00
Winnings on Eat Bulaga Talent Show 10,000.00
PCSO winnings 7,000.00
Property Dividend received from SM Corporation 50,000.00
Overpayments/Tax Credit last year 5,910.00
Tax payments during the previous three quarters 38,685.00
Withholding Tax on Compensation 33,723.00

Additional Information:
Dennis failed to file his Annual Income Tax Return (1701) due on April 15, 2020. He filed it on May 20, 2020.
BUSINESS & PERSONAL INFORMATION
Taxable year: 2019
Amended return: No
Number of sheets attached: 00
TIN number: 256-900-143
RDO Code: 90
Taxpayer/Filer Type Single Proprietorship & Professional
Alphanumeric Tax Code II012 Business Income-Graduated IT Rates &
II014 Income from Profession-Graduated IT Rates
Taxpayer/Filer Name Dennis B. Magallano
Registered Address San Isidro, Tomas Oppus, Southern Leyte
Zip Code 6605
Date of Birth: August 9, 1975
Email Address: denmag@gmail.com
Citizenship Filipino
Claiming Foreign Tax Credit No
Contact No. 09091479143
Civil Status Single
Income exempt from Income Tax? No
Subject to Preferential Tax Rate? No
Tax Rate Graduated Rates
Method of Deduction Itemized
Annual Income Tax Return (1701) Solution Set
ANSWER KEY
Item USING ITEMIZED DEDUCTIONS
Sched 2 Taxable Compensation Income
Annual Gross Salary P 360,000.00
Representation & Transportation Allowance 60,000.00
Monetized Value of 14-days un-used leave credits 16,142.00
13th Month Pay & Other Bonuses 93,600.00
4 Gross Compensation Income P 529,742.00
Less: SSS, Philhealth & Pag-Ibig Benefits P 13,320.00
Non-taxable Monetized leave credits 11,530.00
Non-taxable 13th Month Pay & Other Bonuses 90,000.00
5 Non-Taxable/Exempt Compensation 114,850.00
6 Taxable Compensation Income P 414,892.00
7 Tax Due-Compensation Income 33,723.00
Sched 3 Taxable Business Income
Net Sales from Merchandising Business P 528,990.00
Net Receipts from the practice of profession (423,000/.90) 470,000.00
8&10 Net Sales/Revenues/Receipts/Fees P 998,990.00
Less: Cost of Sales from Merchandising Business P 238,046.00
Cost of Service from practice of Profession 190,350.00
11 Cost of Sales/Services 428,396.00
12 Gross Income/(Loss) from Business/Profession P 570,594.00
Sched 4 Less:
4 Utilities Expense 45,670.00
5 Depreciation Expense 29,900.00
6 Representation Expense 7,880.00
11 Rent Expense 24,000.00
13 Salaries Expense P 78,986.00
16 Transportation Expenses 1,260.00
Sched 3-
13&16 Ordinary/Total Allowable Itemized Deduction 187,696.00
18 Net Income/(Loss) P 382,898.00
19 Add: Winnings on Eat Bulaga Talent Show P 10,000.00
20 PCSO winnings 7,000.00
22 Total Other Non-operating Income 17,000.00
23 Taxable Income-Business P 399,898.00
24 Total Taxable Income-Compensation & Business 814,790.00
25 & Part
2 - 22 Total Tax Due-Compensation & Business P 134,437.00
Part 7 Tax Credits/Payments
1 Overpayments/Tax Credit last year P 5,910.00
2 Tax payments during the previous quarters 38,685.00
5 Withholding Tax on Compensation 33,723.00
9 Withholding Tax on practice of profession 47,000.00
10 Total Tax Credits / Payments P 125,318.00
Part 2 - 24 Tax Payable/(Overpayment) P 9,119.00
Part 2 Penalties
27 Interest (((9,119.00 X .20) X 34)/360) P 172.25
28 Surcharge (9,119.00 X .25) 2,279.75
30 Total Penalties 2,452.00
31 Total Amount Payable (Overpayment) P 11,571.00
Annual Income Tax Return (1701) Solution Set
ANSWER KEY
USING OPTIONAL STANDARD DEDUCTION (OSD)
Sched 2 Taxable Compensation Income
Annual Gross Salary P 360,000.00
Representation & Transportation Allowance 60,000.00
Monetized Value of 14-days un-used leave credits 16,142.00
13th Month Pay & Other Bonuses 93,600.00
4 Gross Compensation Income P 529,742.00
Less: SSS, Philhealth & Pag-Ibig Benefits P 13,320.00
Non-taxable Monetized leave credits 11,530.00
Non-taxable 13th Month Pay & Other Bonuses 90,000.00
5 Non-Taxable/Exempt Compensation 114,850.00
6 Taxable Compensation Income P 414,892.00
7 Tax Due-Compensation Income P 33,723.00
Sched 3 Taxable Business Income
Net Sales from Merchandising Business P 528,990.00
Net Receipts from the practice of profession (423,000/.90) 470,000.00
8&10 Net Sales/Revenues/Receipts/Fees P 998,990.00
17 Less: Optional Standard Deduction 399,596.00
18 Net Income/(Loss) P 599,394.00
19 Add: Winnings on Eat Bulaga Talent Show P 10,000.00
20 PCSO winnings 7,000.00
22 Total Other Non-operating Income 17,000.00
23 Taxable Income-Business P 616,394.00
24 Total Taxable Income-Compensation & Business P 1,031,286.00
25 Total Tax Due-Compensation & Business P 199,386.00
Part 7 Tax Credits/Payments
1 Overpayments/Tax Credit last year P 5,910.00
2 Tax payments during the previous quarters 38,685.00
5 Withholding Tax on Compensation 33,723.00
9 Withholding Tax on practice of profession 47,000.00
10 Total Tax Credits / Payments P 125,318.00
Part 2 - 24 Tax Payable/(Overpayment) P 74,068.00
-
Part 2 Penalties
27 Interest (((74,068.00 X .20) X 34)/360) P 1,399.06
28 Surcharge (74,068.00 X .25) 18,517.00
30 Total Penalties 19,916.06
31 Total Amount Payable (Overpayment) P 93,984.06
 Republic of the Philippines
For BIR BCS/ Department of Finance
Use Only Item: Bureau of Internal Revenue
BIR Form No.
Annual Income Tax Return
1701 Individuals (including MIXED Income Earner), Estates and Trusts
January 2018 (ENCS) Enter all required information in CAPITAL LETTERS using BLACK ink. Mark applicable boxes with
Page 1 an “X”. Two copies must be filed with the BIR and one held by the Tax Filer.
1701 01/18ENCS P1
1 For the Year (YYYY) 2 0 1 9 2 Amended Return? Yes x No 3 Short Period Return? Yes x No

PART I – Background Information of Taxpayer/Filer

4 Taxpayer Identification Number (TIN) 2 5 6 - 9 0 0 - 1 4 3 - 0 0 0 0 0 5 RDO Code 0 9 0
6 Taxpayer Type x Single Proprietor x Professional x Estate Trust x Compensation Earner
7 Alphanumeric Tax Code (ATC) x II012 Business Income-Graduated IT Rates x II014 Income from Profession–Graduated IT Rates II013 Mixed Income–Graduated IT Rates

II011 Compensation Income II015 Business Income - 8% IT Rate II017 Income from Profession – 8% IT Rate II016 Mixed Income – 8% IT Rate
8 Taxpayer’s Name (Last Name, First Name, Middle Name)/ESTATE OF (First Name, Middle Name, Last Name)/ TRUST FAO: (First Name, Middle Name, Last Name)
M A G A L L A N O , D E N N I S , B A N Z U E L A
9 Registered Address (Indicate complete address. If the registered address is different from the current address, go to the RDO to update registered address by using BIR Form No. 1905)

S A N I S I D R O , T O M A S O P P U S , S O U T H E R N L E Y T E
9A ZIP Code 6 6 0 5
10 Date of Birth (MM/DD/YYYY) 11 Email Address
0 8 0 9 1 9 7 5 denmag@gmail.com
12 Citizenship 13 Claiming Foreign Tax Credits? 14 Foreign Tax Number, if applicable
F I L I P I N O Yes X No
15 Contact Number (Landline/Cellphone No.) 16 Civil Status (if applicable)
0 9 0 9 1 4 7 9 1 4 3 X Single Married Legally Separated Widow/er
17 If married, spouse has income? Yes No 18 Filing Status Joint Filing Separate Filing
19 Income EXEMPT from Income Tax? Yes x No 20 Income subject to SPECIAL/PREFERENTIAL RATE? Yes x No
[If yes, fill out also consolidation of ALL activities per Tax Regime (Part X)] [If yes, fill out also consolidation of ALL activities per Tax Regime (Part X)]
21 Tax 21A Method of Deduction (choose one)
Rate* X Graduated Rates X Itemized Deduction Optional Standard Deduction (OSD)
(choose one) (Choose Method of Deduction in Item 21A) [Sec. 34(A-J), NIRC] [40% of Gross Sales/Receipts/Revenues/Fees [Sec. 34(L), NIRC]

8% in lieu of Graduated Rates under Sec. 24(A) & Percentage Tax under Sec. 116 of NIRC
[available if gross sales/receipts and other non-operating income do not exceed Three million pesos (P3M)]
PART II – Total Tax Payable (DO NOT enter Centavos; 49 Centavos or Less drop down; 50 or more round up)
Particulars A. Taxpayer/Filer B. Spouse
22 Tax Due (From Part VI Item 5) 1 3 4 4 3 7
23 Less: Total Tax Credits/Payments (From Part VII Item 10) 1 2 5 3 1 8
24 Tax Payable/(Overpayment) (Item 22 Less Item 23) 9 1 1 9
25 Less: Portion of Tax Payable Allowed for 2nd Installment to be paid on or before October 15
(50% or less of Item 22)

26 Amount of Tax Payable/(Overpayment) (Item 24 Less Item 25)

Add: Penalties 27 Interest 1 7 2
28 Surcharge 2 2 8 0
29 Compromise
30 Total Penalties (Sum of Items 27 to 29) 2 4 5 2
31 Total Amount Payable/(Overpayment) (Sum of Items 26 and 30) 1 1 5 7 1
32 Aggregate Amount Payable/(Overpayment) (Sum of Items 31A and 31B) 1 1 5 7 1
If overpayment, mark one (1) box only. (Once the choice is made, the same is irrevocable)
To be refunded To be issued a Tax Credit Certificate (TCC) To be carried over as a tax credit for next year/quarter
I declare under the penalties of perjury that this return, and all its attachments, have been made in good faith, verified by me, and to the best of my knowledge and belief, are true and correct,
pursuant to the provisions of the National Internal Revenue Code, as amended, and the regulations issued under authority thereof. Further, I give my consent to the processing of my information as
contemplated under the *Data Privacy Act of 2012 (R.A. No. 10173) for legitimate and lawful purposes. (If signed by an Authorized Representative, indicate TIN and attach authorization letter)

33 Number of Attachments
Printed Name and Signature of Taxpayer/Authorized Representative
PART III - Details of Payment
Particulars Drawee Bank/Agency Number Date (MM/DD/YYYY) Amount
34 Cash/Bank Debit Memo
35 Check
36 Tax Debit Memo
37 Others (specify below)

Machine Validation/Revenue Official Receipt Details (if not filed with an Authorized Agent Bank) Stamp of Receiving Office/AAB and Date of Receipt
(RO’s Signature/Bank Teller’s Initial)

*NOTE: The BIR Data Privacy Policy is in the BIR website (www.bir.gov.ph)
 BIR Form No.

1701 Annual Income Tax Return

January 2018 (ENCS) Individuals (including MIXED Income Earner), Estates and Trusts
Page 2 1701 01/18ENCS P2
TIN Tax Filer’s Last Name
0 0 0 0 0
PART IV – Background Information of Spouse
1 Spouse’s Taxpayer Identification Number - - - 0 0 0 0 0 2 RDO Code
3 Filer’s Spouse Type Single Proprietor Professional Compensation Earner
4 Alphanumeric Tax Code (ATC) II012 Business Income-Graduated IT Rates II014 Income from Profession–Graduated IT Rates II013 Mixed Income–Graduated IT Rates

II011 Compensation Income II015 Business Income - 8% IT Rate II017 Income from Profession – 8% IT Rate II016 Mixed Income – 8% IT Rate
5 Spouse’s Name (Last Name, First Name, Middle Name)

6 Contact Number 7 Citizenship

8 Claiming Foreign Tax Credits? Yes No 9 Foreign Tax Number
(if applicable)
10 Income EXEMPT from Income Tax? Yes No 11 Income subject to SPECIAL/PREFERENTIAL RATE? Yes No
[If yes, fill out also consolidation of ALL Activities per Tax Regime (Part X)] [If yes, fill out also consolidation of ALL activities per Tax Regime (Part X)]
12 Tax 12A Method of Deduction (choose one)
Rate* Graduated Rates Itemized Deduction Optional Standard Deduction (OSD)
(choose one) (Choose Method of Deduction in Item 12A) [Sec. 34(A-J), NIRC] [40% of Gross Sales/Receipts/Revenues/Fees [Sec. 34(L), NIRC]

8% in lieu of Graduated Rates under Sec. 24(A) & Percentage Tax under Sec. 116 of NIRC
[available if gross sales/receipts and other non-operating income do not exceed Three million pesos (P3M)]
PART V – Computation of Tax
Schedule 1 – Gross Compensation Income and Tax Withheld (Attach Additional Sheet/s, if necessary)
On Items 1 and 2, enter the required information for each of your employer/s and mark (X) whether the information is for the Taxpayer or the Spouse. On Item 3A, enter the Total
Gross Compensation and Total Tax Withheld for the Taxpayer and on Item 3B, for the Spouse. (DO NOT enter Centavos; 49 Centavos or Less drop down; 50 or more round up)
a. Name of Employer
Taxpayer
1 Spouse b. Employer’s TIN

Taxpayer
2 Spouse b. Employer’s TIN
(Continuation of Table Above) c. Compensation Income d. Tax Withheld
1
2
Gross Compensation Income and Total Tax Withheld for
3A TAXPAYER (To Part V Schedule 2 Item 4A and Part VII Item 5A)
Gross Compensation Income and Total Tax Withheld for
3B SPOUSE (To Part V Schedule 2 Item 4B and Part VII Item 5B)
Schedule 2 – Taxable Compensation Income (DO NOT enter Centavos; 49 Centavos or Less drop down; 50 or more round up)
Particulars A. Taxpayer/Filer B. Spouse
4 Gross Compensation Income (From Part V Schedule 1 Item 3Ac/3Bc) 5 2 9 7 4 2
5 Less: Non-Taxable / Exempt Compensation 1 1 4 8 5 0
6 Taxable Compensation Income (Item 4 Less Item 5) 4 1 4 8 9 2
7 Tax Due-Compensation Income (Item 6 x applicable Income Tax Rate) 3 3 7 2 3
Schedule 3 – Taxable Business Income (If graduated rates, fill in items 8 to 24; if 8% flat income tax rate, fill in items 25 to 30)
3.A – For Graduated Income Tax Rates
8 Sales/Revenues/Receipts/Fees 9 9 8 9 9 0
9 Less: Sales Returns, Allowances and Discounts
10 Net Sales/Revenues/Receipts/Fees (Item 8 Less Item 9) 9 9 8 9 9 0
11 Less: Cost of Sales/Services (applicable only if availing Itemized Deductions) 4 2 8 3 9 6
12 Gross Income/(Loss) from Operation (Item 10 Less Item 11) 5 7 0 5 9 4
Less: Deductions Allowable under Existing Laws
13 Ordinary Allowable Itemized Deductions (From Part V Schedule 4 Item 18) 1 8 7 6 9 6
14 Special Allowable Itemized Deductions (From Part V Schedule 5 Item 3 and/or Item 6)
15 Allowance for Net Operating Loss Carry Over (NOLCO) (From Part V Schedule 6 Item 8 and/or Item 13)
16 Total Allowable Itemized Deductions (Sum of Items 13 to 15) 1 8 7 6 9 6
OR
17 Optional Standard Deduction (OSD) (40% of Item 10)
18 Net Income/(Loss) (If Itemized: Item 12 Less Item 16; If OSD: Item 10 Less Item 17) 3 8 2 8 9 8
Add: Other Non-Operating Income (specify below)
19 Winnings on Eat Bulaga Talent Show 1 0 0 0 0
20 PCSO winnings 7 0 0 0
21 Amount Received/Share in Income by a Partner from General Professional Partnership (GPP)
22 Total Other Non-Operating Income (Sum of Items 19 to 21) 1 7 0 0 0
23 Taxable Income-Business (Sum of Items 18 and 22) 3 9 9 8 9 8
24 Total Taxable Income – Compensation & Business (Sum of Items 6 and 23) 8 1 4 7 9 0
25 Total Tax Due-Compensation and Business Income (under graduated rates)
(Item 24 x applicable income tax rate ) (To Part VI Item 1) 1 3 4 4 3 7
 BIR Form No.

1701 Annual Income Tax Return

January 2018 (ENCS) Individuals (including MIXED Income Earner), Estates and Trusts
Page 3 1701 01/18ENCS P3
TIN Tax Filer’s Last Name
0 0 0 0 0
3.B – For 8% Flat Income Tax Rate (DO NOT enter Centavos; 49 Centavos or Less drop down; 50 or more round up)
Particulars A. Taxpayer/Filer B. Spouse
26 Sales/Revenues/Receipts/Fees (net of sales returns, allowances and discounts)
Add: Other Non-Operating Income (specify below)
27
28 Total Income (Sum of Items 26 and 27)
29 Less: Allowable reduction from gross sales/receipts and other non-operating income of purely self-
employed individuals and/or professionals in the amount of P250,000 (not applicable if with compensation income)
30 Taxable Income/(Loss) (Item 28 Less Item 29)
31 Tax Due-Business Income (Item 30 x 8% Flat Income Tax Rate)
32 Total Tax Due–Compensation & Business Income (under flat rate) (Sum of Items 7and 31) (To Part VI Item 1)

Schedule 4 - Ordinary Allowable Itemized Deductions (attach additional sheet/s, if necessary)

1 Amortizations
2 Bad Debts
3 Charitable and Other Contributions
4 Depletion / Utilities Expense 4 5 6 7 0
5 Depreciation 2 9 9 0 0
6 Entertainment, Amusement and Recreation 7 8 8 0
7 Fringe Benefits
8 Interest
9 Losses
10 Pension Trusts
11 Rental 2 4 0 0 0
12 Research and Development
13 Salaries, Wages and Allowances 7 8 9 8 6
14 SSS, GSIS, Philhealth, HDMF and Other Contributions
15 Taxes and Licenses
16 Transportation and Travel 1 2 6 0
17 Others (Deductions Subject to Withholding Tax and Other Expenses) [Specify below; Add additional sheet(s), if necessary]
a Janitorial and Messengerial Services
b Professional Fees
c Security Services
d
18 Total Ordinary Allowable Itemized Deductions (Sum of Items 1 to 17d) (To Part V Schedule 3.A Item 13) 1 8 7 6 9 6
Schedule 5 – Special Allowable Itemized Deductions (attach additional sheet/s, if necessary)
5.A – Taxpayer/Filer Description Legal Basis Amount
1
2
3 Total Special Allowable Itemized Deductions-Taxpayer/Filer (Sum of Items 1 and 2) (To Part V Schedule 3.A Item 14A)
5.B – Spouse
4
5
6 Total Special Allowable Itemized Deductions -Spouse (Sum of Items 4 and 5) (To Part V Schedule 3.A Item 14B)
Schedule 6 - Computation of Net Operating Loss Carry Over (NOLCO)
6.A – Computation of NOLCO
Description A. Taxpayer/Filer B. Spouse
1 Gross Income
2 Less: Ordinary Allowable Itemized Deductions
3 Net Operating Loss (Item 1 Less Item 2) (To Schedule 6.A.1 Item 7A &/or Schedule 6.A.2 Item 12A)
6.A.1 – Taxpayer/Filer’s Detailed Computation of Available NOLCO
Net Operating Loss B. NOLCO Applied D. NOLCO Applied E. Net Operating Loss
C. NOLCO Expired (Unapplied)
Year Incurred A. Amount Previous Year/s Current Year
[(E)= A – (B+C+D)]
4
5
6
7
8 Total NOLCO - Taxpayer/Filer (Sum of Items 4D to 7D) (To Part V Schedule 3.A Item 15A)
 BIR Form No.

1701 Annual Income Tax Return

January 2018 (ENCS) Individuals (including MIXED Income Earner), Estates and Trusts
Page 4 1701 01/18ENCS P4
TIN Tax Filer’s Last Name
0 0 0 0 0
(Continuation of Schedule 6)
6.A.2 – Spouse’s Detailed Computation of Available NOLCO
Net Operating Loss E. Net Operating Loss
B. NOLCO Applied D. NOLCO Applied
C. NOLCO Expired (Unapplied)
Year Incurred A. Amount Previous Year/s Current Year
[(E)= A – (B+C+D)]
9
10
11
12
13 Total NOLCO - Spouse (Sum of Items 9D to 12D) (To Part V Schedule 3.A Item 15B)
PART VI – Summary of Income Tax Due
1 Regular Rate–Income Tax Due (From Part V, Either Item 25 or Item 32)
2 Special Rate–Income Tax Due (From Part X Item 17B/17F)
3 Less: Share of Other Government Agency, if remitted directly to the Agency
4 Net Special Rate–Income Tax Due/Share of National Govt. (Item 2 Less Item 3)
5 Total Income Tax Due (Sum of Items 1 & 4) (To Part II Item 22)
PART VII - Tax Credits/Payments (attach proof)
1 Prior Year’s Excess Credits 5 9 1 0
2 Tax Payments for the First Three (3) Quarters 3 8 6 8 5
3 Creditable Tax Withheld for the First Three (3) Quarters
4 Creditable Tax Withheld per BIR Form No. 2307 for the 4 th Quarter
5 Creditable Tax Withheld per BIR Form No. 2316 (From Part V Schedule 1 Item 3Ad/3Bd) 3 3 7 2 3
6 Tax Paid in Return Previously Filed, if this is an Amended Return
7 Foreign Tax Credits, if applicable
8 Special Tax Credits, if applicable (To Part VIII Item 6)
9 Other Tax Credits/Payments (specify) Withholding Tax on practice of profession
_________________________________ 4 7 0 0 0
10 Total Tax Credits/Payments (Sum of Items 1 to 9) (To Part II Item 23) 1 2 5 3 1 8
PART VIII – Tax Relief Availment
VIII.A – Special Rate
1 Regular Income Tax Otherwise Due (Part X Item 16B &/or Item 16F X applicable regular income tax rate)
(Part X Item 7B and/or Item 7F X
2 Tax Relief on Special Allowable Itemized Deductions applicable regular income tax rate)
3 Sub-Total – Tax Relief (Sum of Items 1 and 2)
4 Less: Income Tax Due (From Part X Item 17B and/or Item 17F)
5 Tax Relief Availment Before Special Tax Credit (Item 3 Less Item 4)
6 Add: Special Tax Credit, if any (From Part VII Item 8)
7 Total Tax Relief Availment- SPECIAL (Sum of Items 5 and 6)
VIII.B – Exempt
8 Regular Income Tax Otherwise Due (Part X Item 16A &/or 16E X applicable regular income tax rate)
(Part X Item 7A and/or Item 7E X
9 Tax Relief on Special Allowable Itemized Deductions applicable regular income tax rate)
10 Total Tax Relief Availment- EXEMPT (Sum of Items 8 and 9)
PART IX – Reconciliation of Net Income per Books Against Taxable Income (Attach additional sheet/s, if necessary)
Particulars A. Taxpayer/Filer B. Spouse
1 Net Income/(Loss) per Books
Add: Non-Deductible Expenses/Taxable Other Income
2
3
4
5 Total (Sum of Items 1 to 4)
Less: A) Non-Taxable Income and Income Subjected to Final Tax
6
7
B) Special/Other Allowable Deductions
8
9
10 Total (Sum of Items 6 to 9)
11 Net Taxable Income/(Loss) (Item 5 Less Item 10)
TABLE 1 – Tax Rates (effective January 1, 2018 to December 31, 2022) TABLE 2 – Tax Rates (effective January 1, 2023 and onwards)
If Taxable Income is: Tax Due is: If Taxable Income is: Tax Due is:
Not over P 250,000 0% Not over P 250,000 0%
Over P 250,000 but not over P 400,000 20% of the excess over P 250,000 Over P 250,000 but not over P 400,000 15% of the excess over P 250,000
Over P 400,000 but not over P 800,000 P 30,000 + 25% of the excess over P 400,000 Over P 400,000 but not over P 800,000 P 22,500 + 20% of the excess over P 400,000
Over P 800,000 but not over P 2,000,000 P 130,000 + 30% of the excess over P 800,000 Over P 800,000 but not over P 2,000,000 P 102,500 + 25% of the excess over P 800,000
Over P 2,000,000 but not over P 8,000,000 P 490,000 + 32% of the excess over P 2,000,000 Over P 2,000,000 but not over P 8,000,000 P 402,500 + 30% of the excess over P 2,000,000
Over P 8,000,000 P 2,410,000 + 35% of the excess over P 8,000,000 Over P 8,000,000 P 2,202,500 + 35% of the excess over P 8,000,000