RA 8424: Title II, Chapter II – General Principles

CHAPTER II

General Principles 

SECTION 23.    General Principles of Income Taxation in the Philippines. –Except when otherwise provided in this Code:

(A) A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines;

(B) A nonresident citizen is taxable only on income derived from sources within the Philippines;

(C) An individual citizen of the Philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income from sources within the Philippines: Provided, That a seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel engaged exclusively in international trade shall be treated as an overseas contract worker;

(D) An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines;

(E) A domestic corporation is taxable on all income derived from sources within and without the Philippines; and

(F) A foreign corporation, whether engaged or not in trade or business in the Philippines, is taxable only on income derived from sources within the Philippines.

(Manual encoding credits: Jacky Margaret Adriano)

By: Tax and Accounting Center Philippines

Few months prior to the last day of filing calendar year annual income tax return for taxable year 2013, the Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 2-2014 dated 24 January 2014 entitled “New Income Tax Forms”.

New Annual Income Tax Returns Philippines

Starting the taxable year 2013, the following new income tax returns in the Philippines shall be used by those taxpayers who are mandatorily required to file annual income tax returns, and those not required to file but opted to file the same:

1. Individual Income Tax Returns Philippines

• BIR Form No. 1700 version June 2013 – Annual income tax return for individuals earning purely compensation income; and,
• BIR Form No. 1701 version June 2013 – Annual income tax returns for Self-employed individuals, estates, and trusts.

2. Corporate Income Tax Returns Philippines

• BIR Form No. 1702-RT version June 2013 – Annual income tax return for corporations, partnerships, and other non-individual taxpayers subject ONLY to REGULAR income tax rate of 30%;
• BIR Form No. 1702-EX version June 2013 – Annual income tax return for use ONLY by corporations, partnerships, and other non-individual taxpayers EXEMPT under the Tax Code and other special laws, with NO other taxable income; and,
• BIR Form No. 1702-MX version June 2013 – Annual income tax return for corporations, partnerships and other non-individuals with mixed income subject to multiple income tax rates or with income subject to special or preferential rate.

Please be guided on the proper annual income tax returns to be used for filing not later than April 15 of the following year for individual taxpayers (employees, freelancers, sole proprietorship, and the likes), and corporate taxpayers on calendar year, or not later than the 15th day of the fourth month following the end of fiscal year for corporate taxpayers on fiscal year basis.

How to get copies of the 2013 new income tax returns Philippines?

You have the following options to get new BIR forms for use in the filing of the annual income tax returns Philippines:

1. Through a download from the Bureau of Internal Revenue (BIR) website – http://www.bir.gov.ph/birforms/form_itr.htm#;
2. Through a pre-printed forms  from the Bureau of Internal Revenue office of registration (e.g. Revenue District Office);
3. For electronic filers under elctronic filing and payment system (EFPS), then, through the BIR EFPS facility upon availability; or
4. Through the eBIR returns upon availability.

Please be guided accordingly and happy filing season!

Disclaimer: This article is for general conceptual guidance only and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances. For comments, you may also please send mail at info(@)taxacctgcenter.org, or you may post a question at Tax and Accounting Center Forum and participate therein.