I received a query regarding the filing of a Sworn Declaration of Gross Receipts/Sales for BIR and tax purposes. Her payor is asking for a copy of her Sworn Declaration received by the BIR. She is on a job-order, by the way.
READ: Income Payees (the one earning or being paid by Income Payors) DO NOT NEED to file a Sworn Declaration of Gross Receipts/Sales with the BIR. They only need to register as self-employed or individuals in practice of profession (one-time registration) and pay the annual registration fee thereafter, on or before the 30th of January, just like with other businesses. All need a COR or Certificate of Registration except for those who have sworn that their gross receipts/sales in any 12-month period from LONE PAYOR are only P250,000.00 and below.
After the one-time registration and annual payment of registration fee, Income Payees need to execute a Sworn Declaration of Gross Receipts/Sales and submit or file the same with their Income Payor/s.
It is the duty of the Income Payors to file with the BIR a Sworn Declaration as Income Payor/Withholding Agents on 15th of January OR before the first payment to the Income Payees. This is in consideration of the fact that some self-employed or individuals in practice of profession start their jobs at any time of the year and could accept multiple contracts at a given period of time.
I hope this answers your question. This is based on BIR Revenue Regulation 11-2018. Here is the link for the said BIR Revenue Regulation, by KPMG. The one in the BIR website takes longer to load.
The following are the Sworn Declarations Forms downloaded from BIR website as annexes to BIR RR 11-2018.
Anyways, it’s been a year since the implementation of TRAIN Law. By now, you should already know how to ride the TRAIN effectively. You should know how it could work to your advantage.
For employees who receive purely compensation income from their employers, taxation is a breeze as they are covered by the substituted filing by their respective employers. For those with mixed-income, they should still file their own mixed-income return by April 30, just like before, using the new graduated table.
The biggest winners of TRAIN Law are the NON-VAT self-employed and individuals in practice of profession as they can choose between the new graduated table and the fixed rate of 8%. If your income for any 12-month period is above P250,000.00 but less than P3M, choosing the 8% income tax rate would be the most beneficial for you in lieu of both the graduated tax table and percentage tax. Just don’t forget to register yourself annually and give or submit to your Payor your Sworn Declaration. P3M is the new threshold for VAT, therefore if your income in any 12-month period reaches P3M, you will automatically be subjected to a higher withholding tax rate of 10%, business tax, and you would be using the graduated table for filing your annual return as you are no longer eligible for the 8%. They said that the rationale for this is that, self-employed and individual in practice of profession have less predictable income.
As an accountant, I know that practicing tax here in the Philippines is a lucrative business. Who wants to deal with BIR, anyway? Who wants to read obsolete regulations, resolutions, and circulars and search for amendments after amendments, especially for the hastily implemented TRAIN Law? Philippine tax is nothing but complicated. But, I still hope that one day it’ll be easy, fast and effective to file income tax returns.
You guys, I know it’s easy said than done, especially given my background, but know your taxes! We may not be as experts as others so we’ll still need tax services but every taxpayer should try hard to know and understand the basics, even if it’s far from being the basics. Hehe.