For anyone new to freelancing and online jobs, you may have thought that our earnings are tax free because our client's are from overseas. Unfortunately, as much as that would be really great, the truth is, we are still obliged to register and pay our taxes based on what is stipulated in our tax laws.
And just so you have a background on current BIR rules on who should pay taxes, this is what is indicated in their website:
Who are Required to File Income Tax Returns?
- Resident citizens receiving income from sources within or outside the Philippines
- Employees deriving purely compensation income from two or more employers, concurrently or successively at any time during the taxable year
- Employees deriving purely compensation income regardless of the amount, whether from a single or several employers during the calendar year, the income tax of which has not been withheld correctly (i.e. tax due is not equal to the tax withheld) resulting to collectible or refundable return
- Self-employed individuals receiving income from the conduct of trade or business and/or practice of profession
- Individuals deriving mixed income, i.e., compensation income and income from the conduct of trade or business and/or practice of profession
- Individuals deriving other non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax
- Individuals receiving purely compensation income from a single employer, although the income of which has been correctly withheld, but whose spouse is not entitled to substituted filing
- Non-resident citizens receiving income from sources within the Philippines
- Aliens, whether resident or not, receiving income from sources within the Philippines
- Corporations including partnerships, no matter how created or organized.
- Domestic corporations receiving income from sources within and outside the Philippines
- Foreign corporations receiving income from sources within the Philippines
- Estates and trusts engaged in trade or business
You can visit the BIR website for the full details.
Taxation for Freelancers
In this video series Taxation for Freelancers we'll look into the different steps every freelancer should take to ensure that you are legitimately registered and paying the proper taxes.
You will learn the steps to follow and the documents you'll need to get you up to speed with your business registration.