Question & AnswerQ&A (BIR REVENUE REGULATION NO. 7-93)
The regulation prescribes the procedures for filing quarterly income tax returns and payment of quarterly income tax by individuals receiving self-employment income under Sections 245 and 67 of the National Internal Revenue Code (NIRC).
All individuals, including estates and trusts, receiving self-employment income taxable under Section 21(f) of the NIRC, except nonresident Filipino citizens with income from outside the Philippines and nonresident aliens not engaged in trade or business in the Philippines.
BIR Form No. 1701Q is used for the quarterly returns for the first three quarters, and BIR Form No. 1701 is used for the final or adjustment return.
First quarter return is due on May 15, second quarter on August 15, third quarter on November 15 of the current year, and the final return on April 15 of the following year.
The quarterly tax payments are based on actual income and deductions for the quarter and are in lieu of filing an estimated income declaration and payment of estimated tax, which may not accurately reflect the taxpayer’s current income tax liability.
Returns and tax payments should be made at the accredited bank in the city or municipality where the principal place of business is located. If there are no accredited banks, they may file and pay with a collection officer or authorized Municipal Treasurer.
Gross income and deductions are computed on a cumulative basis, considering only income taxable under Section 21(f) of the NIRC. Personal and additional exemptions can only be deducted in the last quarter.
The income tax is computed based on the cumulative taxable income up to the quarter, reduced by the total quarterly taxes previously paid and any withholding taxes from the reported gross income.
The taxpayer can either request a tax refund or tax credit certificate or apply the excess as a credit against the quarterly income tax liabilities for the following year.
Penalties are imposed in accordance with Sections 248 and/or 249 of the NIRC for failure to file, late filing, non-payment, or underpayment of the quarterly income tax.