The Philippine government, through the Ease of Paying Taxes (EOPT) Law and Revenue Regulations No. 8-2024, has streamlined taxpayer classifications. This makes it easier for businesses to understand their tax obligations based on their size and income level.
This blog post will serve as your guide to the new taxpayer classifications:
- Micro Taxpayer: This category applies to businesses with gross sales of less than Three Million Pesos (₱3,000,000.00) for a taxable year.
- Small Taxpayer: If your business generates gross sales between Three Million Pesos (₱3,000,000.00) and Twenty Million Pesos (₱20,000,000.00) in a year, you fall under this classification.
- Medium Taxpayer: Businesses with gross sales exceeding Twenty Million Pesos (₱20,000,000.00) but less than One Billion Pesos (₱1,000,000,000.00) in a taxable year are classified as medium taxpayers.
- Large Taxpayer: This classification applies to businesses with gross sales of One Billion Pesos (₱1,000,000,000.00) and above for a taxable year.
Important Note: When calculating your gross sales for tax classification purposes, remember to exclude the following:
- Value-Added Tax (VAT)
- Any other deductions
- Compensation income (e.g., salaries)
- Passive income (e.g., interest earned)
- Tax-exempt income
Need More Information?
For a more comprehensive understanding of the new taxpayer classifications and their corresponding tax obligations, you can refer to Revenue Regulations No. 8-2024. You can access this document through this link: [bit.ly/RR8-2024] (Please note that this short link avoids directly embedding the full URL in the blog post).
By knowing your taxpayer classification, you can ensure you comply with the appropriate tax filing and payment procedures. This will help you avoid penalties and keep your business tax compliant.
Disclaimer: This blog post is for general information purposes only and does not constitute professional tax advice.