TAX TABLE
If Taxable Income is : Tax Due is: If Taxable Income is : Tax Due is:
Not over P10,000
5%
   
Over P10,000 but not over P30,000 P500 + 10% of the excess over P10,000 Over P140,000 but not over P250,000 P22,500 + 25% of the excess over P140,000
Over P30,000 but not over P70,000 P2,500 + 15% of the excess over P30,000 Over P250,000 but not over P500,000 P50,000 + 30% of the excess over P250,000
Over P70,000 but not over P140,000 P8,500 + 20% of the excess over P70,000 Over P500,000 P125,000 + 34% of the excess over P500,000
Note : Effective January 1, 1999, the maximum rate will be changed to 33% and 32% on January 1, 2000.

BIR Form 1700 - Annual Income Tax Return
Guidelines and Instructions

Who Shall File

       This return shall be filed, in triplicate copies, by every resident citizen deriving compensation income from all sources, or resident alien and non-resident citizen with respect to compensation income from within the Philippines, except the following:

1.
An individual whose gross compensation income does not exceed his total personal and additional exemptions;
2.
An individual whose compensation income derived from one employer does not exceed P60,000 and the income tax on which has been correctly withheld;
3.
An individual whose income tax has been subjected to final withholding tax(alien employee as well as Filipino employee occupying the same position as that of the alien employee of regional or area headquarters of multinational companies, petroleum service contractors and sub-contractors, and offshore banking units; non-resident alien not engaged in trade or business); and
4.
An individual who is exempt from income tax.

       Married individuals shall file a single return for the taxable year to include the income of both spouses, separately computing their individual income tax based on their respective taxable compensation income.e it is impracticable for the spouses to file one return, each spouse may file a separate return.

When and Where to File

       The income tax return with a tax payable shall be filed with any Authorized Agent Bank (AAB) of the Revenue District Office where the taxpayer is required to register/where the taxpayer has his legal residence or place of office in the Philippines. In places where there are no AABs, the return shall be filed with the Revenue Collection Officer or duly Authorized City or Municipal Treasurer. If taxpayer has no legal residence or place of office in the Philippines, the return shall be filed with the Office of the Commisioner or Revenue District Office (RDO) where the taxpayer is required to register/ where the taxpayer has his legal residence or place of office in the Philippines.

       The returns of the taxpyers shall be filed on or before the fifteenth (15th) day of April of each year covering income for the preceding taxable year.

       ( It is suggested, however, that the tax return be filed with the appropriate collection agent of the Revenue District Office where the taxpayer is required to register.)

When and Where to Pay

       Upon filing this return, the total amount payable shall be paid to the AAB where the return is filed. In places where ther are no AABs, the tax shall be paid with the Revenue Official Receipt (BIR Form No. 2524). When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal installments, the first installment to be paid at the time the return is filed and the second, on or before July 15 of the same year.

       Where the return is filed with an AAB, the lower portion must be duly machine-validated and stamped received to serve as receipt of payment. The machine validation shall reflect the amount paid, date of payment and transaction code whereas the stamp mark shall show the name of the AAB, branch code, teller's code and teller's initial. The AAB shall also issue an official receipt as additional proof of payment.

       Overwithholding of income tax on compensation due to the fault of the employee shall be forfeited in favor of the government.

Personal and Additional Exemptions

       The filer's civil status shall be indicated by marking with an "x" the appropriate box. The amount of personal exemption are as follows :

  a. For single individual, widow/widower or married individual judicially decreed as legally separated with no qualified dependents P20,000
b. For Head of the Family P25,000
c. For each employed married individual P32,000

       In the case of married individuals where only one of the spouses is deriving gross income, only such spouse shall be allowed the personal exemption.

       An additional exemption of P8,000.00 shall be allowed for each qualified dependent child, not exceeding four(4). The additional exemption for dependents shall be claimed by the husband, who is deemed the head of the family unless he explicitly waives his right in favor of his wife.

       In the case of legally separated spouses, additional exemption may be claimed only by the spouse who has custody of the child or children; Provided, that the total amount of additional exemptions that may be claimed by both shall not exceed the maximum additional exemptions allowed byt the Tax Code.

Change of Status

       If the taxpayer marries or should have additional dependent(s) during the taxable year, the taxpyer may claim the corresponding personal or additional exemption, as the case may be, in full for such year.

       If the taxpayer dies during the taxable year, his estate may still be claim the personal and additional exemptions for himself and his dependent(s) as if he died at the close of such year.

 

       If the spouse or any of the dependents dies or if any of such dependents marries, becomes twenty-one (21) years old or becomes gainfully employed during the taxable year, the taxpayer may still claim the same exemptions as if the spouse or any of the dependents died, or as if such dependents married, became twenty-one (21) years old or became employed at the close of such year.

Gross Taxable Compensation Income

       Premium payment on health and/or hospitalization insurance of an individual taxpayer does not include SSS, GSIS, Medicare and Pag-ibig Contributions, and Union Dues of individuals.

       The non-business/non-professional related income reported under "other taxable income" should reflect only the net taxable amount.

Premium Payment on Health and/or Hospitalization Insurance

       Premium payment on health and/or hospitalization insurance of an individual taxpayer, including his family, in the amount of P2,400.00 per year, per family, may be deducted from gross income. Provided, that said taxpayer, including his fammily, has a yearly gross income of not more than P250,000.00 In case of marred taxpayers, only the spouse claiming the additional exemption for dependents shall be entitled to this deduction.

Definition of Terms

       "Head of the Family" means an unmarried or legally separated man or woman with one or both parents, or with one or more brothers, sisters, or with one or more legitimate, recognized natural or legally adopted children, living with and dependent upon him for their chief support, where such brothers or sisters or children are not more than twenty-one(21) years of age, unmarried, not gainfully employed, or regardless of age, are incapable of self-support because of mental or physical defect. The term also includes a benefactor of a senior citizen under Republic Act 7432.

       "Dependent Child" means a legitimate, illegitimate or legally adopted child chiefly dependent upon and living with the taxpayer if such dependent is not more than twenty-one(21) years of age, unmarried and not gainfully employed or if such dependent, regardless of age, is incapable of self-support because of mental or physical defect.

Penalties

There shall be imposed and collected as part of the tax:

1. A surcharge of twenty five percent (25%) for each of the following violations:

a. Failure to file any return and pay the amount of tax or installment due on or before the due date;

b. Unless otherwise authorized by the Commissioner, filing a return with a person or office other than those with whom it is required to be filed;

c. Failure to pay the full or part of the amount of tax shown on the return, or the full amont of tax due for which no return is required to be filed on or before the due date;

d. Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment.

2. A surcharge of fifty percent (50%) of the tax or of the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, for each of the following violations:

a. Willful neglect to file the return within the period prescribed by the Code or by rules and regulations; or

b. In case a false or fraudulent return is willfully made.

3. Interest at the rate of twenty percent (20%) per annum, or such higher rate as may be prescribed by rules and regulations, on any unpaid amount of tax, from the date prescribed for the payment until the amount is fully paid.

4. Compromise penalty.

Attachments Required

1.
Certificate of Income Tax Withheld on Compensation (BIR Form 2316)
2.
Waiver of the husband's right to claim additional exemption, if applicable.
3.
Duly approved Tax Debit Memo, if applicable.
4.
Proof of Foreign Tax Credits, if applicable.
5.
For amended return, proof of payment and the return previously filed.
Box No. 1 refers to the transaction perod and not the date of filing this return.
The last 3 digits of the 12-digit TIN refers to the branch code.
TIN = Taxpayer Identification Number