Question & AnswerQ&A (BUREAU OF INTERNAL REVENUE)
A Licensed Professional refers to individuals engaged in the practice of professions or callings who render services for a fee and are enumerated under Section 2.57.2 (A)(1) of Revenue Regulations No. 2-98, as amended.
Non-Licensed Professionals or Non-Professionals are individuals not identified under Section 2.57.2 (A)(1) of RR No. 2-98 and who are not registered with regulatory bodies like the Professional Regulations Commission; they render labor-only services for a fee under a contract of service.
They must register using BIR Form No. 1901 with taxpayer type as 'Professional' or 'Professional - in General' with documents such as a copy of service contract and valid government-issued ID. The business name field must include '- Job Order'. They are exempt from Annual Registration Fee and Certificate of Registration issuance.
No, they are exempt from maintaining books of accounts and from issuing registered receipts or invoices.
They are required only to file the Annual Income Tax Return (BIR Form No. 1701) and are exempt from filing Quarterly Income Tax Returns.
They must register similarly but pay the Annual Registration Fee, are subject to income tax, creditable withholding taxes (10% or 15% for licensed professionals, 2% for non-licensed), and percentage tax or VAT withholding by the government payor. They must file and pay Annual Income Tax Returns, and monthly/quarterly VAT or percentage tax returns, but are exempt from Quarterly Income Tax Return filing.
They may opt for substituted filing of Percentage Tax/VAT Return whereby the lone payor withholds and remits the tax and files BIR Form 1600 with BIR Form 2306 attached. The professional is then exempt from monthly/quarterly percentage tax and VAT returns filing and issuance of registered receipts, the BIR Form 2306 serving as the substituted official receipt.
They must register using BIR Form 1901 for TIN and COR, pay the Annual Registration Fee, register tax types RF, IT (1701/1701Q), VAT or Percentage Tax, maintain books of accounts, secure Authority to Print, issue registered receipts/invoices, file quarterly and annual income tax returns, and are subject to withholding taxes and filing monthly/quarterly VAT or percentage tax returns.
They must update their registration information using BIR Form 1905 with their home RDO and file a 'Notice of Cancellation on the Availment of the Substituted filing of Returns' (Annex D) within 10 calendar days from effectivity of separation from service.