Clarification on Marginal Income Earners Registration

BIR Revenue Memorandum Circular No. 7-2014 operates pursuant to Revenue Regulations No. 7-2012, specifically the definition and rules for MIE under Section 3 of RR No. 7-2012.
The Circular also references the prescribed invoicing regime under RMO 12-2013 for the issuance of registered principal receipts/sales invoices.

Section 3 of RR No. 7-2012 defines a Marginal Income Earner as an individual whose business does not realize gross sales or receipts exceeding PHP 100,000 in any 12-month period.
The individual must be not deriving compensation as an employee under an employer-employee relationship, but instead must be self-employed.
The individual’s activities must be principally for subsistence or livelihood.
The definition includes, among others, agricultural growers/producers (farmers/fishermen) selling directly to ultimate consumers, small sari-sari stores, small carinderias or aturo-turos, and drivers/operators of a single unit tricycle.
The definition includes others similarly situated, but excludes licensed professionals, consultants, artists, sales agents, brokers and others similarly situated, including those whose income has been subjected to withholding tax.

The incidence of being an MIE establishes eligibility for specific privileges and imposes minimum registration and tax compliance requirements.
The Bureau requires MIEs to register using BIR Form 1901 and to meet the minimal documentary requirements stated in the Circular.

An MIE must register with the Bureau using BIR Form 1901.
Registration must be supported by the following minimal documentary requirements:
- A Sworn Statement of Income for the year (Annex aAa); and
- An NSO Certified or Local Civil Registry Birth Certificate.
The BIR District Office must evaluate the application for registration.

Upon evaluation, the BIR District Office shall issue the Certificate of Registration to the MIE.
The BIR District Office shall also ensure compliance with:
- the registration of books of accounts, and
- the issuance of Authority To Print for Principal Receipts/Sales Invoices.
An MIE must register books of accounts using simplified books appropriate to daily activity, such as a two-column journal or other simplified books for daily expenses and revenues.
An MIE must issue registered principal receipts/sales invoices as prescribed under RMO 12-2013.

An MIE must file and pay the Annual Income Tax Return using BIR Form 1701, similar to any other self-employed individuals.
An MIE is exempt from the payment of Annual Registration Fee (ARF).
An MIE is exempt from payment of business taxes, including VAT or any Percentage Tax.