tax
Filing Your Income Tax Return (ITR) in the Philippines: A Quick Guide
Posted by Mariel Therese Deocampo
onSeptember 25, 2025
Filing your Income Tax Return (ITR) may not be the most exciting task of the year, but it’s one of the most important responsibilities you have as a taxpayer. Whether you’re an employee, a freelancer, or a business owner, ensuring your ITR is filed accurately and on time keeps you compliant with the Bureau of Internal Revenue (BIR) and helps you avoid costly penalties.
In this guide, we’ll walk you through why filing matters, who needs to file, the deadlines, the documents you’ll need, and how to file — plus a few tips to make the process smoother.
Why Filing Your ITR Matters
Filing your Income Tax Return isn’t just a yearly obligation, it’s your legal responsibility as a taxpayer. Timely and accurate filing ensures you remain compliant with the Bureau of Internal Revenue (BIR) and avoid penalties, surcharges, and interest fees.
Beyond compliance, your ITR serves as an official record of your income and tax payments. This document is often required when:
Applying for loans or credit cards – Banks and financial institutions use your ITR to verify income.
Processing visas – Embassies may require your ITR as proof of financial capacity.
Bidding for government projects – Contractors and suppliers need updated ITRs for eligibility.
In short, your ITR is more than paperwork, it’s proof of your credibility, financial stability, and compliance with Philippine tax laws.
Who Needs to File an Income Tax Return in the Philippines?
In the Philippines, filing an Income Tax Return (ITR) is required for individuals and entities earning income within the country — whether from employment, business, or other sources. You need to file an ITR if you fall under any of these categories:
Employees
- Those with multiple employers during the year
- Employees whose income tax was not correctly withheld
- Employees earning other sources of income aside from salary
Self-Employed Individuals
- Sole proprietors and freelancers
- Professionals practicing their profession (e.g., lawyers, doctors, accountants)
Mixed-Income Earners
- Individuals earning both from employment and business or professional practice
Corporations and Partnerships
- Both resident and non-resident corporations doing business in the Philippines
Non-Residents with Income from PH Sources
- Foreign individuals or entities earning from Philippine-based activities
Exemptions and Substituted Filing
Some individuals are not required to file an ITR if they qualify under substituted filing, this applies to employees who:
Have only one employer during the taxable year
Received purely compensation income
Had their taxes correctly withheld by their employer
Were issued a BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld) which the employer files with the BIR on their behalf
Other exemptions apply to minimum wage earners and those whose income has been fully subjected to the final tax. However, these exemptions have specific conditions under BIR rules, so it’s best to verify your status before deciding not to file.
Deadline for Filing Income Tax Return in the Philippines
Meeting the right deadline is just as important as filing the correct form. Missing it can result in penalties, surcharges, and interest — all of which can be avoided with proper planning.
Individual Taxpayers – Whether you’re a sole proprietor, a professional, or a mixed-income earner, the deadline for filing your Annual Income Tax Return is April 15 of the following year.
Corporations and Partnerships – For domestic and foreign corporations, partnerships, and other on-individual taxpayer, the deadline is the 15th day of the fourth month following the close of the taxable year. If your company follows a calendar year, the due date is April 15 of the following year.
Note: If a deadline falls on a weekend or holiday, it generally moves to the next working day.
Documents Needed for Filing Your ITR
Let’s dive into the documents you need to prepare, broken down by category.
1. BIR Forms
Here are the forms you need when filing your Annual Income Tax Return (ITR). The form you use depends on your taxpayer type and source of income.
Form 1700 – For individuals earning purely compensation income (not qualified for substituted filing)
Form 1701 – For self-employed individuals, professionals, and mixed-income earners under graduated tax rates
Form 1701A – For Individuals who opted 8% flat income tax or optional standard deduction (strictly business/professional income)
Form 1701-MS – For individuals classified as micro and small taxpayers (self-employed or mixed-income, up to ₱20M gross sales)
Form 1702RT – For corporations, partnerships, and non-individual taxpayers under regular tax rates
Form 1702EX – For corporations, partnerships, and non-individual taxpayers exempt from income tax
Form 1702MX – For corporations, partnerships, and non-individual that are subject to special rate
2. Financial Records
This includes all source documents and bookkeeping records that support your reported income and expenses, such as:
Books of Accounts (manual, loose-leaf, or computerized, duly registered with the BIR)
Invoices (for goods/services sold)
Purchase Invoices and Expense Receipts
Bank Statements and bank transaction records
Petty Cash Vouchers and reimbursement slips
Payroll Records (if applicable)
BIR Form 2316 for employed individuals as proof of compensation
Any other supporting documents for business transactions
3. Tax Credit and Withholding Documents
If your income has already been subjected to withholding taxes, you’ll need to prepare the official documents to claim those tax credits. Common examples include:
BIR Form 2307 (Certificate of Creditable Tax Withheld at Source) – issued by your clients or customers if they withheld taxes on your income payments.
BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld) – issued by your employer if you earned income from employment.
Summary Alphalist of Withholding Taxes (SAWT) – required as an attachment to your ITR if you are claiming tax credits from Form 2307; it provides a detailed list of all income payments and related withholding taxes for the year.
Other tax credit certificates – such as foreign tax credits (if applicable) or special tax incentive certificates from investment agencies.
4. Financial Statements
If you choose the Itemized Deduction method, you must submit financial statements together with your ITR. These financial statements must be audited by an independent Certified Public Accountant (CPA) if your gross sales or receipts exceed ₱3,000,000 in a taxable year. If they are below this threshold, you still need to submit financial statements, but an audit is not required.
Commonly required financial statements include:
Statement of Financial Position (Balance Sheet)
Statement of Comprehensive Income (Income Statement)
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
5. Quarterly Income Tax Returns (1701Q or 1701AQ)
You will need copies of your 1st, 2nd, and 3rd quarter tax returns when preparing your Annual Income Tax Return.
BIR Form 1701Q – For individuals, including sole proprietors, self-employed professionals, and mixed-income earners.
BIR Form 1702Q – For corporations, partnerships, and other non-individual taxpayers. We broke down everything you need to know about Form 1702Q in this blog.
These quarterly returns are crucial for the figures reported in them (such as cumulative income, expenses, and taxes paid) are carried over and reconciled in your annual return. Having accurate quarterly data ensures that all income is properly declared, tax credits are correctly applied, and you avoid discrepancies or penalties during year-end filing.
Special Notes for Freelancers and Online Sellers
The BIR now actively monitors freelancers, content creators, and e-commerce sellers. If you're earning online, it's crucial to:
Register as a self-employed individual
Keep copies of all payout reports from platforms (e.g., Upwork, TikTok Creator Fund, Shopee, Lazada, etc.)
Maintain a record of all expenses (home office, internet, gear, etc.)
Where to File Your Income Tax Return
You can file your Income Tax Return (ITR) through either of the following channels, depending on your preference and situation:
eBIRForms – A free online filing system provided by the BIR for most individual taxpayers and small businesses.
eFPS (Electronic Filing and Payment System) – Used mainly by large taxpayers and those mandated by the BIR to file and pay electronically.
Manual filing – Only allowed when electronic filing system is down, the tax form is not yet available on electronic filing, or if permitted by the Commissioner of Internal Revenue. This is done by filing and paying taxes to any Revenue Collection Officer (RCO) or Authorized Agent Bank (AAB).
What Happens If You Miss the Deadline?
Missing the Income Tax Return (ITR) filing deadline can result in additional costs and penalties, including:
Surcharge – 25% of the tax due, or 50% in cases of willful neglect or false return.
Interest – 12% per annum on the unpaid amount, computed from the deadline until fully paid.
Compromise Penalty – A monetary penalty imposed in lieu of criminal prosecution, based on BIR’s schedule of compromise penalties.
These charges can quickly add up, so it’s always best to file and pay your taxes on time to avoid unnecessary expenses.
Pro Tips for Smooth ITR Filing
Here are a few reminders to stay on top of your taxes:
Gather documents early. Prepare receipts, invoices, and financial statements ahead of time.
Check your details. Make sure your TIN, name, and address are correct.
Use the right form. Select the correct ITR form for your taxpayer type.
File and pay on time. Avoid penalties by meeting deadlines.
Keep proof of filing. Save the confirmation email or stamped copy.
If you're too busy to manage tax documents yourself, consider hiring outsourced bookkeeping services. It’s a practical way to stay organized, reduce errors, and meet tax deadlines without stress.
Final Thoughts
Preparing for your annual income tax return filing doesn’t have to be stressful as long as you have your documents in order. Whether you’re a full-time freelancer, a startup owner, or a side hustler, being compliant not only avoids penalties but also builds a strong foundation for your financial future.
At Accountable PH, we help freelancers and SMEs streamline their tax compliance. Need help organizing your tax documents? Book a consultation today!
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Tax