As freelancers, do we pay income tax?

As freelancers, yes, we pay income tax…

and withholding tax, when we hire/pay people in exchange for their services.

By virtue of...

NIRC National Internal Revenue Code of the Philippines

BIR Memorandum Circircular Reiterating taxpayers’ obligations in relation to online business transactions

Is freelance taxation new?

NO. The entire principle of taxation is part of world history, which has been Biblically accounted.

And it came to pass in those days, that there went out a decree from Caesar Augustus, that all the world should be taxed. (Luke 2:1)

And he said unto them, Render therefore unto Caesar the things which be Caesar's, and unto God the things which be God's. (Luke 20:25)

Submit yourselves to every ordinance of man for the Lord's sake… (1 Peter 2:13)

So, how do we comply? We register our freelance business with the Philippine Bureau of Internal Revenue.

What are the requirements for registering our freelance business?

1. BIR Form 1901 (2 copies) Application for Registration

2. Letter of intent What services do we offer? (Free template available at

3. Business location sketch

4. BIR Form 0605 (3 copies) Payment Form

5. Registration fee of Php500 With BIR (Payment) Form

Requirements may vary due to other factors civil status, nature of work, licensure, etc.

Do we need mayor’s permit, DTI, etc.? Answer to that depends on the nature of our work.

Upon registration approval… we will receive a certificate with paid BIR documentary stamp.

BIR Form 2303 COR Certificate of Registration

Apply for authority to print (ATP) receipts and invoices

Within 30 days from date of registration ATP of receipts and invoices

Request BIR- accredited printer to process ATP and produce OR booklets with carbonized paper.

Accounting books …may vary depending on the nature of our work as freelancers and self- employed income earners

Accounting books journal

Accounting books cash disb’ts.

Accounting books cash receipts

Accounting books ledger

Accounting books official appt. bk. These books are valid for three years, from date of registering them at the BIR.

Can we do our own bookkeeping? YES.

We may hire a CPA later to do our financial statement, that is, if our annual income reaches and exceeds Php550,000.

Otherwise, we don’t have to submit an FS … just the ITR (BIR Form 1701). Again, that is, if our annual income is below Php550,000.

What types of income tax do we pay? 1 - Annual registration fee (Php500) Renewable on or before January 31 BIR Form

What types of income tax do we pay? 2 - Percentage tax, 3% of monthly gross Filed or paid on or before the 20th of the month, following the applicable month BIR Form 2551M

What types of income tax do we pay? 3 - Quarterly tax, based on percentage tax Filed or paid on or before the 15th of April, August, and November BIR Form 1701Q

What types of income tax do we pay? 4 - Annual tax, based on percentage and quarterly tax Filed or paid on or before April 15 BIR Form

Also, community tax (cedula) Paid at the municipal’s office or barangay district office Computed at 0.1% of our gross income Required prior to filing ITR (BIR Form 1701)

Where do we pay income tax? any BIR-authorized agent bank (AAB)

If we have no income for the month… do we pay income tax?

No, we don’t pay income tax for… non-income months.

We file directly with the BIR- RDO or the regional district office of the BIR (where we have registered), using the BIR forms, depending on tax period (i.e., 2551M, 1701Q, 1701)

For details, do ask the BIR personnel, call your BIR-RDO for inquiries, or better yet, visit the BIR website:

You may also visit…

The Filipino freelancers’ guide to paying taxes and securing social benefits

Salamat po. Salamat po.