Income Tax Return in the Philippines: What You Need to Know [2026 Update]

Last updated on February 13, 2026

With the world becoming increasingly digital, people and businesses daily engage in various virtual activities, including compliance practices. For instance, big and small businesses are legally responsible for filing income tax returns annually. Here, filing taxes online is convenient.

If you own a business, it’s only fitting that you understand the process to avoid penalties and compliance issues. Below is a comprehensive guide to help you learn about income tax returns and how to file them properly.

What is an Income Tax Return?

According to the Bureau of Internal Revenue, an income tax is a tax on your salary or income, profits from property, emoluments, professional practice or business, and other gross income sources that correspond to an income tax rate.

Whether you’re a working individual or a business, you must file an income tax return (ITR) annually for earning revenue during the year.

As a resident Filipino citizen, you must pay taxes on your income, regardless of its source. As for non-residents, and aliens or foreigners, only income derived from sources inside the Philippines is taxed. The following types of income are tax deductible:

• Compensation from any employer-employee relationship, including commissions, fringe benefits, and taxable bonuses
• Revenue from professional practice, trade, sale of assets, rental activities, and business
• Passive income from these sources: interest from Philippine or foreign currency bank accounts, royalties, prizes (like the lottery), dividends, sales of rental property, shares of stocks and an informer’s reward

What are the Types of Income Tax Return in the Philippines?

1. BIR Form 1700: Annual Income Tax Return For Individuals Earning Purely Compensation Income (Including Non-Business/Non-Profession Related Income)

The Annual Income Tax Return (AITR) is a requirement for individuals who earn income through a salary, business, or other professional activities.

2. BIR Form 1701A: Annual Income Tax Return For Individuals Earning Income Purely from Business/Profession

Individuals earning solely from their business or professional services file BIR Form 1701A. This is for individuals who have either opted for graduated income tax rates with optional standard deduction as their mode of deduction or the 8% flat income tax rate.

3. BIR Form 1701: Annual Income Tax Return For Individuals (Including Mixed Income Earners), Estates and Trusts

This is the ITR for individuals in the Philippines who are earning from mixed income, such as compensation income from an employment, a business or trade, or capital gains. This form is used to declare all income earned within a specific tax year and compute the corresponding income tax liability.

4. BIR Form 1701Q and 1702Q: Quarterly Income Tax Return

The QITR is for corporations (1702Q) and individuals (1701Q) engaged in business who are required to pay income tax quarterly. This form is used to report income earned and taxes withheld during each quarter of the year.

5. BIR Form 1702-RT: Annual Income Tax Return For Corporation, Partnership and Other Non-Individual Taxpayer Subject Only to REGULAR Income Tax Rate

This is the ITR for every corporation, partnership and other non-individual taxpayers who are subject to regular income tax rate of either 25% or 20% (For corporations with net taxable income not exceeding Five Million Pesos (P 5,000,000) AND total assets not exceeding One Hundred Million (100,000,000), excluding the land on which the particular business entity’s office, plant and equipment are situated).

6. BIR Form 1702-MX: Annual Income Tax Return for Corporation, Partnership and Other Non-Individual with MIXED Income Subject to Multiple Income Tax Rates or with Income Subject to SPECIAL/PREFERENTIAL RATE

This is the ITR for every corporation, partnership and other non-individual taxpayers earning mixed income subject to multiple income tax rate such as but not limited to companies operating in economic zones (PEZA) or entities receiving both regular income and income taxed under special laws.

7. BIR Form 1702-EX: Annual Income Tax Return For Corporation, Partnership and Other Non-Individual Taxpayer EXEMPT under the Tax Code

This ITR shall be filed by a Corporation, Partnership and Other Non-Individual Taxpayer exempt under the Tax Code, as amended [Sec. 30 and those exempted in Sec. 27(C)] and other special laws with no other taxable income such as but not limited to foundations, cooperatives, charitable institutions, non-stock and non-profit educational institutions, General Professional Partnership (GPP) etc.

What are the Requirements for Filing an ITR in the Philippines?

• Tax Identification Number (TIN)
• Previously filed quarterly returns
• Income Documents: W-2 form( if applicable), pay slips, certificates of compensation, business or professional income documents
• Expense Documents: Invoices, bills,bank statements
• Record of Tax Payments: BIR Form 2307 or Certificate of Creditable Tax Withheld at Source
• Personal information: full name, address, birthdate, civil status
• Supporting documents for deductions and/or credits claimed
• A signed and dated return by the taxpayer or authorized representative

Who Is Required to File an ITR?

Citizens and foreigners residing in the Philippines who earn income, whether locally or abroad, are required to file an Income Tax Return (ITR). In most cases, companies handle the filing for their employees.
Meanwhile, freelancers and business owners are responsible for filing their own returns. This requirement affects a significant portion of the population, with around 28.4 million individual taxpayers registered in the Philippines as of 2024.

The list below shows individuals and non-individuals who are required to file their ITRs.

Individuals

• Resident citizens who receive money from domestic or international sources. This includes those who have single or several employers within the tax period, are self-employed and professionals with mixed-income and are earning from non-business and non-professional income
• Non-resident citizens who earn money from Philippine-based sources
• Resident or non-resident foreign nationals who receive income from the Philippines

Non-individuals

• Corporations and partnerships, regardless of their structure or formation
• Domestic businesses that receive money from both domestic and international sources
• Foreign companies that earn income in the Philippines
• Estates and trusts that are in business or trade

Who Is Exempted from Filing an Income Tax Return?

Although most earning individuals must observe income tax filing in the Philippines, exemptions apply to the following:

• A person who is purely compensation earner qualified for substituted filing
• A person earning minimum wage
• A person whose gross income does not exceed ₱250,000
• A person whose income is fully covered by final withholding tax
• An overseas Filipino worker (OFW) / Overseas Contract Workers (OCWs)
• A non-resident Filipino citizen who is not staying in the Philippines but disclosed to the BIR that they would remain abroad
• A non-resident Filipino citizen who leaves the Philippines during the tax year to live overseas for permanent employment or as an immigrant
• A non-resident Filipino citizen who works and is paid abroad
• A Filipino citizen who was previously a non-resident citizen

Which BIR Form Do I Use for My Income Tax Preparation?

You can identify the different BIR forms by their number. The correct BIR form number depends on your earning status or business type.

Individuals

• BIR Form 1700 is for reporting earnings solely from compensation, non-business income or professional income.
• BIR Form 1701A is for reporting income from your business or profession. This form also applies if you avail of the 8% fixed income tax rate.
• BIR Form 1701 is for reporting earnings as self-employed.
• BIR Form 1701Q is for reporting quarterly income.

Non-individuals

• BIR Form 1702-EX is for corporations, partnerships, and other non-individuals exempted under the Tax Code and other special laws and have no other taxable income.
• BIR Form 1702Q is for reporting quarterly income.
• BIR Form 1702-MX is for reporting mixed-income, which is subject to varying tax rates. This form also reports earnings that are eligible for a special rate.
• BIR Form 1702-RT is for reporting income subject to a regular or fixed tax rate.

How to File Your Income Tax Return

Once you’ve identified which forms to use for your ITR, you can file them in person, via online filing, or by using online BIR forms. However, the BIR can reject your application if you are identified as a bogus taxpayer, if you’ve provided mismatched information with the BIR’s database or if the Head of Office doesn’t authorize your application.

In-person filing and payments

In-person or manual tax filing requires you to visit the Revenue District Office (RDO) or Tax Filing Center with your accomplished BIR form and other necessary documents for filing your ITR. Then, you must proceed to the right RDO, which has your records.

To pay your taxes, you will need to settle them with an accredited bank of the RDO. After the BIR approves your application, you will receive a copy of the legally validated and stamped BIR form as proof that your income tax return has been filed.

Online filing and payments

If manual tax filing is too tedious or inconvenient, you can do it online. The electronic filing and payment system (eFPS) allows you to transact through the BIR website once you sign up and enroll.

Like manual filing, you will need to submit an accomplished BIR form. Once you get approval, you will also get a copy of the BIR form with the legal validation and stamp.

The eFPS is for BIR duly notified large taxpayers, the top 20,000 private corporations, and the top 5,000 individual taxpayers. The following are also required to use this method of tax filing:

• Taxpayers who plan to work with government offices
• Corporations with ₱10 million in paid-up capital stock
• Organizations within special economic zones and listed with the Philippine Economic Zone Authority (PEZA)
• Government offices

Online Filing for Non-eFPS Filers

Another way to conveniently file your Income Tax Return in the Philippines is through the electronic BIR Forms or eBIRForms. The BIR created these to give non-eFPS taxpayers and accredited tax agents (ATAs) the option to file their taxes online.

Here’s how to file your ITR online:

• Go to the BIR website and click eServices. Select the eBIRForms option.
• Download the latest version and install it on your computer to fill out your tax forms. Once you’ve entered your details, it will allow you to submit your accomplished papers to the Online eBIRForms system.
• If approved, the BIR will email you a confirmation receipt. For the tax payment, you may either use ePay facilities on the same eServices site or you may visit an authorized agent bank (AAB) to settle your tax dues.

When is Your Income Tax Due?

Whether you are manually filing or doing it online, the deadline for submitting your income tax return is every April 15. Late filing counts as a penalty, requiring you to pay a fine of an additional 25% of the balance, compromise amount from P1,000 to P25,000, and interest charged equivalent to the current annual market rate computed from the payment’s due date.

If your business is struggling with on-time income tax filing, our expert tax services can help you stay stress-free and avoid incurring penalties that hurt your business.

Simplify Your Tax Filing with Expert Support

Running a business involves managing multiple processes and responsibilities. Whether you operate a small or large enterprise, staying compliant with tax regulations, including filing your income tax return is essential.

If you want easy and timely tax filing experience, CloudCFO can help. As one of the leading cloud accounting firms in the Philippines, CloudCFO supports startups and SMEs through reliable, tech-enabled accounting and expert tax services. To learn more about how CloudCFO can support your business, contact the team today.