The Freelancer’s Guide to BIR Tax Forms
So many forms, so little time
Let’s get it out there: nobody likes paperwork. Especially not when there are at least seven different forms and lots of numbers involved. But alas, paying taxes—and in the freelancer’s case, filing them—is a necessary evil of sorts. All in the name of being responsible citizens, even if it makes our vision swim and our heads hurt a little.
So, let’s get right down to it. How does a freelancer pay for taxes anyway? We’ll clue you in: there’s computing and processing, and plenty of paperwork to deal with. But hey, don’t fret just yet. From here, we break down the different BIR tax forms that you’ll encounter from registration to your annual filing. We promise we’ll make it as painless as possible.
First thing’s first: before you can start paying your taxes, you need to get registered under the Bureau of Internal Revenue (BIR). This right here is your rite of passage, your grand debut into the tax-paying world. Here are the forms you need to get acquainted with:
Form 1901 (Application for Registration)
What it is: The igniting spark of your registration process, this is the first official step to becoming a BIR-registered professional.
What you need: First off, you’ll definitely be needing your NSO birth certificate and valid ID’s. Other requirements, such as a DTI certificate of business name, mayor’s business permit, Professional Tax Receipt and contract or company certification may be required. The required documents vary depending on location and the nature of your business, so be sure to call up your local Regional District Office (RDO) to confirm what you’ll be needing. Find your RDO’s address and contact number via this directory.
A pro tip: Having a Taxpayer Identification Number number will make the entire registration process simpler, so make securing a TIN the first on your to-do list. Thankfully, freelancers can easily apply for one online.
Where to get it: Download BIR Form No. 1901 here.
Form 0605 (Payment Form)
What it is: This is the form you’ll need to submit every time you pay the BIR for your taxes. Naturally, you’ll also need to submit this when paying for your registration.
What you need: Submit the form along with your registration fee of P500, certification fee of P15 and documentary stamp tax of P15 at any Authorized Agent Bank within the vicinity of your RDO. Make sure to prepare one original and two photocopies of this form.
Where to get it: Download BIR Form No. 0605here.
Form 2303 (Certificate of Registration)
What it is: This is a form that will be issued to you after submission of all requirements and attendance of a taxpayer’s briefing at your RDO. This is one document you won’t want to lose; it’s the one that reflects all the taxes you’ll have to pay. You will also receive an “Ask for a Receipt” Notice (ARN) along with your Certificate of Registration.
Form 1906 (Application for Authority to Print Receipts and Invoices)
What it is: The next step in the process is getting clearance to print official receipts or invoices for your business (remember, you won’t be able to legally provide freelance services without issuing official receipts!). This form is what you need to secure the BIR’s permission to print receipts for your clients.
What you need: Submit 3 copies of Form 1906 with a copy of your Form 2302 (Certificate of Registration) to your RDO. Upon release, submit your Authority to Print (ATP) to a licensed printer. Check this link for a full list of the BIR’s accredited printers.
Where to get it: Download BIR Form No. 1906 here.
Not so fast; you’ve got one more thing to accomplish before you can officially start paying your taxes. The BIR requires registered professionals to keep track of books of accounts—these could either be manual, loose-leaf or computerized. Find out more about each kind, as well as the minimum requirements for submission, here. Submit these with a copy of your Form 1901 (Application Form) and a payment of P15 for the Documentary Stamp to your local RDO for stamping and consider yourself done!
Congratulations, you’re a registered taxpayer! You’ve officially got one foot through the door. Now comes the main course: paying your dues. Ahead, we’ve listed which forms you’ll need to pay for each kind of tax. We’ve also included the deadline for filing each, so have your calendars ready. You won’t want to miss paying for any of these, o responsible citizen!
Form 2551M (Monthly Percentage Tax Return)
What it is: This form is used to file for payment of Monthly Percentage Tax Return. The default payment for freelancers is 3%.
When it’s due: Monthly Percentage Tax Returns should be filed by the 20th day of each month. This is payable at any of the BIR’s Authorized Agent Banks.
What you need: File this form in triplicate along with your payment and BIR Form 0605 (Payment Form)
Where to get it: Download BIR Form No. 2551M here.
Form 1701Q (Quarterly Income Tax Return)
What it is: This is the piece of paper you need to file your income tax for a quarter of the year, based on your net income.
When it’s due: Be sure to pay your dues before April 15th, August 15th and November 15th!
What you need: File this form in triplicate along with your payment and BIR Form 0605 (Payment Form).
Where to get it: Download BIR Form No. 1701Q here.
Form 1701 (Annual Income Tax Return)
What it is: Form 1701 is used to file your tax returns for all transactions made in the calendar year.
When it’s due: Submit this on or before April 15th of the following taxable year.
What you need: Always have your BIR Form No. 0605 when you make payments!
Where to get it: Download BIR Form No. 1701 here.
Don’t forget: your annual registration tax!
That’s right, there’s one more thing you shouldn’t overlook. To remain a registered taxpayer recognized by the BIR, you must pay P500 annually. Think of it as your membership fee to the fancy taxpayers’ country club. As always, an accomplished Form 0605 is needed for paying your dues. Be sure to take note: the annual registration tax is due on January 30th of every year.
We won’t lie; it’s a lot to take in and is admittedly a pain in the ass. But believe us when we say that the effort will be worth it. Beyond the responsibility thrust upon you as a citizen, knowing that you personally filed, computed and managed your returns is crazy rewarding.
Now that you’re armed with the basic knowledge you need, you’re ready to conquer the tax-paying world. Good luck out there!
Art Alexandra Lara