QuestionsQuestions (BIR REVENUE MEMORANDUM CIRCULAR NO. 7-2014)
An individual whose business does not realize gross sales or receipts exceeding PHP 100,000 in any 12-month period qualifies as a Marginal Income Earner (MIE), subject to the other conditions under the regulations.
An MIE is an individual who is self-employed and derives gross sales or receipts not exceeding PHP 100,000 in any 12-month period, and who is NOT deriving compensation as an employee under an employer-employee relationship.
No. The MIE definition expressly excludes individuals deriving compensation as an employee under an employer-employee relationship; MIEs must be self-employed.
The activities of the MIE should be principally for subsistence or livelihood.
The circular mentions, among others: agricultural growers/producers (farmers/fishermen) selling directly to ultimate consumers; small sari-sari stores; small carinderias or aturo-turos; drivers/operators of a single unit tricycle; and similar livelihood activities.
Licensed professionals, consultants, artists, sales agents, brokers, and others similarly situated are excluded, including those whose incomes have been subjected to withholding tax.
Yes. The circular states that sales agents (and brokers, licensed professionals, consultants, artists, etc.) are not included in the MIE category.
MIEs must register with the Bureau using BIR Form 1901, with specified minimal documentary requirements.
The application must include: (i) a Sworn Statement of Income for the year (Annex “A”); and (ii) an NSO-certified or local civil registry birth certificate.
MIEs are exempt from the payment of the Annual Registration Fee (ARF).
Yes. They must register books of accounts, e.g., a two-column journal or other simplified books for daily expenses and revenues.
MIEs must file and pay the Annual Income Tax Return using BIR Form 1701, similar to other self-employed individuals.
They are exempt from business taxes such as VAT and any Percentage Tax.
After evaluation, the BIR District Office issues the Certificate of Registration and ensures compliance regarding the registration of books of accounts and the issuance of Authority To Print for principal receipts/sales invoices.
No. The MIE definition requires that gross sales or receipts do not exceed PHP 100,000 in any 12-month period.
No. While certain exemptions apply (ARF and business taxes like VAT/percentage tax), MIEs still must register books, issue properly registered receipts/invoices, and file/payout the annual income tax return using BIR Form 1701.