The Bureau of Internal Revenue (BIR) recently released a memorandum stating that the filing of the 2025 Annual Income Tax Return is extended from April 15 to May 15, 2026. This extension gives taxpayers time to prepare and submit their documents and pay on time to avoid penalties. The deadline extension is important for Filipinos amid the ongoing oil crisis and rising expenses
However, many freelancers are still confused about the process of paying taxes. Unlike employees or registered businesses, freelancers usually manage their taxes on their own.
Freelancing involves being hired by one or more clients to do a specialized service on a work-for-hire basis. Although they are providing service for clients, freelancers are not considered employees as they are independent contractors. Therefore, it is not the client who will be processing their tax obligations and benefits. Because of this, clients do not process their taxes or government benefits. Freelancers must handle their tax obligations themselves.
To help simplify things, here are some frequently asked questions about taxes for freelancers.
Do freelancers have to pay Income Tax?
Yes. Under the National Internal Revenue Code of 1997, income tax is imposed on the taxable income of Philippine residents from all sources.
For freelancers, this includes income earned from professional or independent services. This rule applies whether the client is located in the Philippines or abroad, and whether the freelancer is licensed or not.
While that is the general rule, freelancers earning below ₱250,000 annually are generally exempt from paying income tax Despite this, individuals who are registered with the BIR may still need to file an income tax return even if no tax is due.
Meanwhile, freelancers earning between ₱250,000 and ₱3,000,000 annually, there are usually two available tax options under the TRAIN LAW:
- Pay 8% of gross income, which replaces both the graduated income tax and percentage tax; or
- Follow the graduated income tax rates provided under the tax table.
How do freelancers register as taxpayers?
To pay for your income tax, freelancers must first register as self-employed professionals with the BIR:
- Accomplish BIR Form 1901 and submit the form to the New Business Registrant Counter to secure your Tax Identification Number (TIN) if you do not yet have one. This can also be done online through the BIR Online Registration and Update System (ORUS).
- Pay for the BIR Registration Fee (₱500), certification fee, and documentary stamp tax;
- The new registrant must go to the Revenue District Office (RDO) for the initial briefing.
- The BIR will issue BIR Form 2303 (Certificate of Registration), which lists the taxes you need to file and the corresponding deadlines.
- Secure an Authority to Print (ATP) so you can issue official service invoices or receipts from BIR-accredited printing establishments.
Things to Remember as a Taxpayer: What should freelancers remember about paying taxes?
Make sure to file and pay for your taxes on time by referring to your Certificate of Registration. In that document, you can see the forms you have to file and when you need to file them.
It is also important to stay updated with BIR announcements in case of changes in filing deadlines, tax regulations, or compliance requirements.
Taxation in the Philippines can sometimes be challenging, especially for freelancers with multiple clients or varying incomes. If you are unsure about your tax obligations, consulting a tax professional or lawyer may help ensure compliance and avoid possible penalties.
Disclaimer:
This article is intended for general informational purposes only and does not constitute legal advice. For specific concerns regarding tax compliance, it is best to consult a qualified tax professional or a licensed lawyer.