5% - 32% depending on your net taxable income
A) OPTIONAL STANDARD DEDUCTION
- Self-employed professionals may elect a standard deduction in an amount not exceeding 40% of gross sales/receipts/revenues/fees.
- No need to submit the Account Information Form (AIF) or Financial Statements.
B) ITEMIZED DEDUCTION
- Includes all the ordinary and necessary expenses paid or incurred during the taxable year related to the operation of your business or practice of your profession.
- Keep a file of your Official Receipts (OR), Cash/Sales Invoice, Payroll, Vouchers,
Bank Statements, Debit/Credit Memo
*See list of itemized deductions.
C) PERSONAL EXEMPTIONS
- PHP 50,000 whether you’re single, married, legally separated or head of a family
D) ADDITIONAL EXEMPTIONS
- PHP 25,000 additional exemption for every qualified dependent child, maximum of 4 qualified dependents.
2EXPANDED WITHHOLDING TAX (EWT)RATE
15% if total professional fees exceed PHP 720,000.00 for the current year; or
10% if total professional fees total PHP 720,000.00 and below for the current year.
This is deducted by the withholding agent/client from the income/fees of the
professional as partial and advance payment of the income tax due from him or her.