tax

The Bureau of Internal Revenue in the Philippines has made it easier and more convenient for taxpayers to file and pay their tax online ever since BIR TRAIN Law was implemented. Follow this complete guide on how to pay tax online in the Philippines this 2020.

What are the Benefits of Paying Taxes Online?

Paying taxes online is faster and easier compared to traditional manual filing and payment. Additionally, the taxpayer can save and compile his or her tax returns and payment receipts electronically through a secure hard drive or online cloud storage.

How to Pay Tax Online in the Philippines:

1. Prepare your Income Tax Return
2. Fill out your eBIR Forms
3. Validate your Total Tax Payment
4. Save and Submit a Final Copy of your ITR
5. Pay your Taxes at BIR Online Accredited Payment Centers

Step-by-step Guide on How to Pay Tax Online in the Philippines:

STEP 1: Prepare your Income Tax Return

The first step is creating and preparing your ITR (Income Tax Return). You can do this by installing the latest version of offline eBIR Forms on your desktop. The offline eBIR Forms software is used to assist taxpayers for the filing and computation of taxes. It is important to note that the current software is available for Windows version only.

STEP 2: Fill out your eBIR Forms

The second procedure to pay tax online in the Philippines is filling out your eBIR Forms. It depends on what type of taxpayer you have been registered in the Bureau of Internal Revenue. The following BIR Forms apply for the types of income taxpayers in 2020:

New BIR Form 1700:

New BIR Form 1700 is the Annual Income Tax Return for taxpayers earning purely compensation income. The deadline for filing this ITR is on or before April 15 of each year, covering for the preceding taxable year.

New BIR Form 1701A:

The new BIR Form 1701A was introduced since the launch of TRAIN Law. You must file this form if you are a professional or purely engaged in a business subject to graduated tax rates and if you are claiming for Optional Standard Deduction (OSD) as a mode of deduction; or if you are availing the 8% flat tax rate.

One of the simplest forms to file. Follow this step-by-step guide: “How to File BIR Form 1701A.”

New BIR Form 1701:

The New BIR Form 1701 is the annual ITR for taxpayers, including mixed-income earners or professionals engaged in a business subject to graduated tax rates and using Itemized Deduction as a mode of deduction. The deadline of filing is on or before April 15 of each year covering income for the preceding taxable year.

STEP 3: Validate your Total Tax Payment

The next step is validating your total tax payment. Once you have filled all the necessary details on your eBIR forms, the software will automatically compute your total tax dues. The software will prompt a message warning if you have given an incorrect detail or if you have missed providing information.

If you have finished, click the VALIDATE button at the lower part of the form. You will receive a successful validation confirmation.

STEP 4: Save and Submit a Final Copy of your ITR

After you have validated your income tax return, that means you are entirely sure all the details and values are correct and accurate. The next thing you need to do is saving and submitting a final copy of your tax forms. Select the file folder or drive where you want to keep your final copy of ITR on your computer.

STEP 5: Pay your Taxes at BIR Online Accredited Payment Centers

The Bureau of Internal Revenue accepts tax payments online through electronic online payment channels, including the following:

• Landbank of the Philippines (Link.Biz Portal)
• Development Bank of the Philippines’ Pay Tax Online
• Unionbank Online Web and Mobile Payment Facility
• GCash App Bills Payment
• PayMaya Bills Payment

How to Pay Income Tax Online Using Landbank Link.Biz Portal?

Landbank Link.Biz Portal accepts online tax payments for LBP ATM account holders, Bancnet ATM, Debit, and Prepaid Cardholders and also depositors of RCBC and Robinsons Bank. Follow the procedures below to pay income tax using the Landbank Link.Biz Portal:

1. Visit the official website of BIR and select ePay
2. Choose the Landbank icon and tap “PAY NOW” button
3. You’ll be redirected to Landbank’s portal
4. Complete each step until the tax payment confirmation

How to Pay Income Tax Online Using DBP?

The Development Bank of the Philippines (DBP) also accepts online tax payments through their online platform. All Visa and MasterCard credit cardholders are allowed. Similarly, all Bancnet ATM and Debit Cardholders are also entitled to use DBP online tax payment facility. Follow the steps below:

1. Go to the BIR official website and select ePay
2. Select DBP icon
3. You’ll be redirected to DBP website
4. Complete each step and provide your account details
5. Pay your income tax

How to Pay Income Tax Online Using Unionbank?

All individual and corporate Unionbank account holders can pay their taxes online using Unionbank web and mobile payment facility. You must have an existing online banking account and do the following procedures:

1. Visit BIR ePay page
2. Choose Unionbank
3. You’ll be redirected to Unionbank platform
4. Log in to your Unionbank account
5. Complete tax account details
6. Submit tax payment

How to Pay Income Tax Online Using GCash?

1. Install the GCash Mobile App
2. Create an account and log in
3. Fund your GCash account
4. Select Pay Bills icon
5. Choose Government as the category
6. Select BIR
7. Enter tax account info
8. Receive an SMS payment confirmation

How to Pay Income Tax Online Using PayMaya?

1. Install PayMaya Mobile App
2. Sign up for an account and log in
3. Fund your PayMaya account
4. From the Home screen, select Bills
5. Choose Government as the category
6. Type BIR in the search box
7. Enter the required information
8. Confirm tax payment
9. Receive an SMS payment confirmation

Other Tax Payment Procedures in the Philippines:

Check out this step-by-step complete guide on how to register a business in BIR for sole proprietorship, partnership, and corporation. The Bureau of Internal Revenue has simplified the registration of business in the Philippines. Now, applicants and registrants do not need to go from one counter to another to submit the documentary requirements.

Having your own business is a lucrative way to expand your reach to generate more income. Earning income will also task you an obligation to pay proper taxes. Thus, registering your business in BIR is mandatory to run a profitable company in the Philippines.

How to Register a Business in BIR?

In this article, we are sharing about the procedures and requirements on how to register Sole Proprietor Business, Partnership, and Corporation in the BIR. Proceed to the Regional District Office (RDO) where your business is located and do the following steps.

How to Register a Business in BIR for Sole Proprietorship?

1. Fill out Application of Registration Form (BIR Form 1901)
2. Submit photocopies of the required documents:
   • DTI Certificate of Registration
   • Mayor’s Permit
   • Barangay Business Clearance
   • Contract of Lease (if you’re renting)
   • Proof of Ownership (if not renting) – TCT or Certificate of Land Title
   • Original Copy of PSA Birth Certificate
   • Original Copy of Marriage Certificate if married
3. Sketch your location of business
4. Fill out BIR Form 0605 and Pay Annual Registration Fee
5. Pay Documentary Stamp Tax
6. Register your Book of Accounts
7. Register your Official Receipts and Sales Invoices
8. Attend the seminar in filing and tax payment
9. Claim your Certificate of Registration

Step 1: Fill out Application of Registration Form (BIR Form 1901)

Accomplish BIR Form 1901. Print or write each detail legibly using capital letters. Mark all appropriate boxes with “X”. You must also know your TIN (Tax Identification Number) in accomplishing your BIR business registration.

Step 2: Submit photocopies of the required documents

Before you register your business in BIR, you should have taken the prior steps such as getting your DTI Business Name Registration, Mayor’s Permit and Barangay Business Clearance. Getting those documents are easy. You can get them all in a day.

Step 3: Sketch your location of business

The BIR also requires sketch of the location of business. A simple sketch of your workplace would help the bureau’s tax mapping activities if there are any in your area.

Step 4: Fill out BIR Form 0605 and Pay Annual Registration Fee

Annual registration fee of P500 is required for new registration of business. Similarly, you need to file this payment form again on or before January 31 of each year as long as you are doing a business.

Step 5: Pay Documentary Stamp Tax

Business registration in the Bureau of Internal Revenue also requires payment of documentary stamp tax. No worries, because you won’t need to pay much especially if you are processing your registration for single proprietorship business.

Step 6: Register your Book of Accounts

Books must be registered before the commencement of the business or upon the registration of a new business in the BIR. Book of accounts and other accounting records must be kept at the office. Additionally, they must be updated and must maintain up-to-date recording of business transactions.

Step 7: Register your Official Receipts and Sales Invoices

All businesses that render services and offer sales are subject to internal revenue taxes. Therefore, they must issue receipts or sales invoices authorized by the BIR.

Likewise, the use of POS machines for the issuance of receipts must also be authorized by the Revenue District Office (RDO) where the business is located.

Every registered business must comply to the BIR rules and regulation including the posting of the Notice for the Issuance of Sale / Commercial Invoice and/or Official Receipts at a visible place at the taxpayer’s place of business.

Step 8: Attend the seminar in filing and tax payment

The business owner or anyone who is responsible for your bookkeeping and accounting can attend the seminar about filing and payment of taxes. Since the TRAIN Law was executed, tax payments are now lower and easier. The same is true with filing of income tax.

Step 9: Claim your Certificate of Registration

At the final step, the BIR will issue your Certificate of Registration (BIR Form 2303). This is an important business document. All the types of taxes the taxpayer or business owner must pay in the calendar year are also displayed in this document.

In addition, the BIR Certificate of Registration must also be posted in a visible place at the location of the business. Keep a copy of it for yourself in case you need it for banking or visa application purposes.

BIR Business Registration Procedure Time Frame

How long is the processing time to register a business in the BIR?

The entire business registration process in BIR takes around 10 minutes to complete depending whether you have provided all the information on the forms correctly. It will help you to speed up the process of registration of your business if you have submitted all the required documents and permits.

How to Register a Business Partnership in BIR?

1. Fill out Application of Registration Form (BIR Form 1903)
2. Submit photocopies of the required documents:
   • Articles of Partnership SEC
   • Mayor’s Permit
   • Barangay Business Clearance
   • Contract of Lease (if you’re renting)
   • Proof of Ownership (if not renting) – TCT or Certificate of Land Title
3. Sketch your location of business
4. Fill out BIR Form 0605 and Pay Annual Registration Fee
5. Pay Documentary Stamp Tax on Lease
6. Register your Book of Accounts
7. Register your Official Receipts and Sales Invoices
8. Attend the seminar in filing and tax payment
9. Claim your Certificate of Registration

A partnership is a legal form of business between two or more persons who share skills, management, and profit. There are three types of partnership recognized by the BIR in the Philippines – general partnership, limited partnership, and general professional partnership. Moreover, this type of business helps in expansion and wealth generation.

If you are planning to start up a partnership, the procedure for registration of partnership business in BIR is similar from the sole proprietorship except on the forms and requirement for the Articles of Partnership from SEC.

How to Register a Corporation in BIR?

1. Fill out Application of Registration Form (BIR Form 1903)
2. Submit photocopies of the required documents:
   • Articles of Incorporation SEC
   • Mayor’s Permit
   • Barangay Business Clearance
   • Contract of Lease
3. Sketch your location of business
4. Fill out BIR Form 0605 and Pay Annual Registration Fee
5. Pay Documentary Stamp Tax on Lease and Subscription
6. Register your Book of Accounts
7. Register your Official Receipts and Sales Invoices
8. Attend the seminar in filing and tax payment
9. Claim your Certificate of Registration

A corporation is a legal entity of a company or group of people authorized to act as a single entity. A corporation is required to be registered at the Securities and Exchange Commission (SEC). While corporations always produce more income, they are also the most complex type of business.

If you want to register a corporation at the BIR, the application and procedures are listed above. Articles of Incorporation is one of the documents required. The registration of corporation in BIR is also similar with other types of business.

Business Related Articles:

• How to Earn Money in GCash for Free
• New Income Tax Table 2020 Philippines
• How to Fill Out BIR Form 1701A for Self-employed and Professionals
• How to Pay SSS Contributions using GCash

A beginners guide on How to fill out BIR Form 1701A for self-employed and professionals. We share here a simple and easy way how to compute and file annual income tax return for individuals earning income purely from business or profession under OSD and 8% flat rate.

Note that if you are availing Allowable Itemized Deductions (AID), you will have to use BIR Form 1701. The steps and guides in filing annual ITR for 1701 are posted on another page.

What is BIR Form 1701A?

BIR Form 1701A is the form used for filing Annual Income Tax Return for individuals earning income purely from business or profession subject to graduated income tax rates who availed the optional standard deduction (OSD) and those who availed the 8% flat income tax rate whose sales receipts and other non-operating income do not exceed 3 million pesos.

This BIR Form 1701A aims to simplify and assist taxpayers to file their Annual Income Tax Returns easily. BIR form 1701A has only 2 pages and is very easy to fill out compared to the old form that had numerous pages. This new form also applies the new TRAIN Law and New Income Tax Table Rates 2020.

1701A is also now available at the eBIR Form Offline program. You can also fill out BIR Form 1701A PDF manually for your own convenience if you prefer that way.

However, we recommend using the eBIR Form because it automatically loads the values you need to fill out and blocks the unwanted parts you don’t need to provide according to the tax rate (OSD or 8%) you have chosen.

Who should file BIR Form 1701A?

According to the Bureau of Internal Revenue, “The return shall be filed by individuals earning income PURELY from trade/business or from the practice of profession, to wit

1. A resident citizen (within and without the Philippines
2. A resident alien, non-resident citizen or non-resident alien (within the Philippines).

The return shall only be used by said individuals as follows

A. Those subject to graduated income tax rates and availed of the optional standard deduction as method of deduction, regardless of the amount of 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”

Procedures How to Fill Out BIR Form 1701A:

1. Fill out Part 1 (page 1 of the form) and select your taxpayer type and Alphanumeric Tax Code (ATC) – Either 012 or 015 for Single proprietor and 014 or 017 for Professional
2. Proceed to Page 2 for the computation of your income tax associated with the tax rate you have chosen (OSD or 8%)
3. Enter any tax credit or tax payment you made previously
4. Go back to page 1 and validate your entries
5. Sign your ITR and pay your taxes

How to Fill Out BIR Form 1701A for Self-Employed:

Self-employed individuals include businessmen or single proprietors or any person earning income from their business, VAT or Non-VAT registered.

The example below opted for the OSD (Optional Standard Deduction) tax rate. You can also opt for the 8% flat rate IF you opted for it already from filing your first 1701Q for the year. Otherwise, opt for the Graduated Income Tax Rate just like from the example below.

Step 1:

Fill out Part 1 section (screenshot above) then proceed with the next page (page 2) and provide the details for the computation of income tax. Since our example opted for the Optional Standard Deduction, we must fill out the details for this section.

Step 2:

Next fill out the section for tax credits or tax payments if any. After you have encoded the values in this page, click the validate tab and proceed to page 1.

Step 3:

Validate your entries and go back to page 1. Write your signature. Double check all the entries you have provided and all your personal details before printing out the document.

You are done with your ITR. So easy right?

How to Fill Out BIR Form 1701A for Professionals:

Professionals include doctors, lawyers, CPAs, architects or any individual earning income from the practice of their profession.

In the example below, we opted for the 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.)

To demonstrate with you another option, you can use this ONLY if you have opted for the 8% flat rate already when filing your first quarter income tax or first quarter percentage tax return.

Step 1:

Accomplish Part 1 section just like that of the above screenshot. Again, you must enter the correct information and options relevant to your status and background as a taxpayer.

Step 2:

Proceed to page 2, Part IV-B for the computation of your tax due. Remember you are computing for the 8% income tax rate.

Step 3:

Enter any tax credit or payment made from the previous quarters. That’s it, you’re done with the steps on how to fill up BIR form 1701A. You can now pay your taxes at any accredited bank, LGU or at the BIR.

The deadline for submitting and paying annual income tax is still April 15.

Helpful BIR Form Filing Guides:

• How to Use eBIR Forms Offline – Step by Step Guide
• How to get TIN Online
• BIR RDO Codes Updated List 2020