![]() ![]() ![]() In such case, his income tax shall be computed under the graduated income tax rates and shall be allowed a tax credit for the previous quarter/s income tax payment/s under the 8% income tax rate option. ![]() ![]() However, existing rules and regulations on bookkeeping and invoicing/receipting shall still apply.Ī taxpayer shall automatically be subject to the graduated rates under Section 24(A)(2)(a) of the Tax Code, as amended, even if the flat 8% income tax rate option is initially selected, when taxpayer’s gross sales/receipts and other non operating income exceeded the VAT threshold during the taxable year. The Financial Statements (FS) is not required to be attached in filing the final income tax return. The said income tax due shall be in lieu of the graduated rates of income tax and the percentage tax under Sec. Likewise, partners of a General Professional Partnership (GPP) by virtue of their distributive share from GPP which is already net of cost and expenses cannot avail of the 8% income tax rate option.Ī taxpayer who signifies the intention to avail of the 8% income tax rate option, and is conclusively qualified for said option at the end of the taxable year shall compute the final annual income tax due based on the actual annual gross sales/receipts and other non-operating income. The option to be taxed at 8% income tax rate is not available to a VAT-registered taxpayer, regardless of the amount of gross sales/receipts, and to a taxpayer who is subject to Other Percentage Taxes under Title V of the Tax Code, as amended, except those subject under Section 116 of the same Title. Such election shall be irrevocable and no amendment of option shall be made for the said taxable year. Unless the taxpayer signifies the intention to elect the 8% income tax rate in the 1st Quarter Percentage and/or Income Tax Return, or on the initial quarter return of the taxable year after the commencement of a new business/practice of profession, the taxpayer shall be considered as having availed of the graduated rates under Section 24(A)(2)(a) of the Tax Code, as amended. An eight percent (8%) tax on gross sales or receipts and other non-operating income in excess of two hundred fifty thousand pesos (P250,000.00) in lieu of the graduated income tax rates under Section 24(A) and the percentage tax under Section 1 16 all under the Tax Code, as amended.The graduated rates under Section 24(A)(2)(a) of the Tax Code, as amended OR.“Individuals earning income purely from self-employment and/or practice of profession whose gross sales/receipts and other non-operating income does not exceed the value-added tax (VAT) threshold as provided under Section 109 (BB) of the Tax Code, as amended, shall have the option to avail of: Here are relevant items on taxation of Self-Employed and Professionals from BIR’s RR 8-2018: Read about it here: 8% BIR Tax Rule for Self-Employed and Professionals (RMO 23-2018) (UPDATE): The BIR has released a new Revenue Memorandum Order covering the availment of 8% tax rate for self-employed and professionals. Tax Rules for Self-Employed and Professionals The tax rules and sample computation are reiterated in Revenue Regulations of the Bureau of Internal Revenue RR 8-2018. If you are a professional or self-employed individual receiving income purely from self-employment or your practice of profession, here are the updated BIR rules as regards your tax liability under the approved TRAIN law. ![]()
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