• PAY

    1INCOME TAX

    RATE

    5% - 32% depending on your net taxable income

    BEGIN

  • ALLOWABLE DEDUCTIONS

    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.
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  • 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.

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  • 3ABUSINESS TAX RATES:
    VALUE ADDED TAX (VAT)

    3A

    RATE

    12% if gross professional fees exceed
    PHP 1,919,500.00 for a 12-month period

    VAT RECEIPT

    The amount of tax shall be shown as a separate item in the invoice or receipts

    3BBUSINESS TAX RATES:
    PERCENTAGE TAX (PT)

    3B

    RATE

    3% if gross professional fees is
    PHP 1,919,500.00 or below for a
    12-month period

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  • 4ANNUAL REGISTRATION FEE

    FORM

    0605 Payment Form

    WHEN

    On or before the last day of January every year after the initial registration.

    RATE

    PHP 500

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  • DONE!

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