Mid March 2019, my team (Taxumo) was introduced to the GrabPay team of Grab. We were introduced by Ms. Diane Eustaquio, the Executive Director of Ideaspace. As some of you may know, we were part of Batch 4 of this incubator/accelerator program, and it has helped us a lot in our start-up journey.
I remember the first time we met with the GrabPay (Grab Philippines) team. They really and sincerely wanted to help with the mission of making it easier for every one to pay taxes. After the first meeting, everyone in each of the teams were committed to make this happen.
Since April was a busy season for us, we agreed to start integrations by May 2019. Integrations only took us a month and for marketing, our go-to-market strategies were laid out after.
We’ve actively started promoting our partnership this month (July 2019).
How will this partnership benefit me?
You can get huge savings when it comes to paying your taxes, particularly on the Taxumo processing fees.
For one, when you pay your taxes using GrabPay Credits for the months of July and August 2019, you get Php 100 OFF on Taxumo Processing Fees.
All you need to do are the following:
Step 1: Key in your income and expense receipts in Taxumo then view your Tax Dues Cards to check on the amount of taxes that you need to pay
Step 2: Choose GrabPay as the payment option and click on payment. It will immediately confirm if you have enough balance in your Grab App (GrabPay Credits) so be sure that you have enough GrabPay credits.
Notice that you will automatically have Php 100 OFF.
The second benefit is that you can get more Taxumo Xennies (usually 1 Xenny is equivalent to 1 Peso). Taxumo Xennies can be used to pay Taxumo Processing fees and to upgrade your Taxumo Plans.
You can now purchase Taxumo Xennies using GrabPay Credits. The best deal that you can get is paying Php 250 for 550 Xennies!
So if you really want to upgrade your Taxumo account and have access to our books of accounts view (if you don’t know how to fill out those manual ledgers) or if you want to get around 50%+ off on Taxumo Processing fees, now it the time to STOCK UP ON XENNIES!
Personally, my dream really for these kinds of integrations with partners, is to have a country where you can pay taxes anytime, anywhere. A country where tax payers pay their duties while commuting, while waiting for the next episode on Netflix, while standing in line in the recently opened ShakeShack… basically, anywhere!
We also welcome new ideas that you may have. If you have an idea that you think will work well for Taxumo, message us at email@example.com!
Hear ye, hear ye! Taxumo has a new and improved dashboard that offers so much more than just tax filing. It now has some form of analytics (cool charts and all!) that shows you your income and expenses and what your top expenses are as a business.
For long time users, you may be surprised to see that the first thing you see is the dashboard and not the “CASHFLOW” tab. If you want to ADD an Income or an Expense Entry, feel free to click on the Cashflow tab on the left side or one of the Cards in the Dashboard.
We changed how we called the tab for setting up your account from “COMPANY” to “SETTINGS”. When you first created your Taxumo account, this is what you were filling out. Feel free to visit this page again as we have simplified the fields the best way we can. We have some guides that you can click on; those are the little question marks seen at the side of each field.
Tax Dues Tab
Tax dues are now in the tax due tab and are grouped per tax type. We also have a reminder on actionable steps that you need to take. For late filings, we have also highlighted them just in case you have missed them.
If you want to view your past filings, click on the Past Filings tab. If you accidentally marked a tax card as paid, you can go to the Hidden Filings tab and unhide it.
We have fixed our payment checkout page. We have heard your requests for us to add more payment channels! We are proud to say that in the coming months, you will see more and more payment options — options that will make it easier for you to file and pay your taxes anytime, anywhere!
#TeamTaxumo is honored to partner with GrabPay! When you file and pay via GrabPay Credits starting July 1, 2019 (until August 31, 2019), you will get a Php 100 off on Taxumo’s processing fees.
Xennies! Get or Earn Taxumo Credits!
We have introduced Xennies! Xennies are Taxumo’s Credits that can be used to pay for your Taxumo Processing fees. There are two ways to get hold of Xennies.
One is to share your own referral code to your friends and family. To set your referral code, click on your name at the top portion of Taxumo’s screen. Click “My Account” and it will direct you to your Xennies Transaction History page. You can earn 100 Xennies for every friend or family that successfully files a form via Taxumo.
Another way to get Xennies is to purchase Xenny Packs. These are available for sale inside the Taxumo Platform. 1 Xenny = 1 Peso. We have a promo running now with GrabPay. Get 10% to 100+% credits when you purchase using GrabPay.
So there you have it folks! These are the changes in the system. If you have any other suggestions, feel free to email firstname.lastname@example.org 🙂
A lot of people have been asking me how to file 1701Q. Personally, I use Taxumo for filing my 1701Q, because it’s the easiest way to compute, file and pay taxes. Full disclosure, I am one of the founders of Taxumo. The reason why we created Taxumo is to help people pay their taxes online.
Business owners, licensed professionals (i.e. doctors, interior designers, etc.) and non-licensed professionals (i.e. consultants, freelancers, etc.) can pay their taxes while focusing more on running their businesses and careers. Accountants can service clients who are far from them and will have no limitations as to how many clients they will service. They can scale their businesses, too!
Our dream really for Taxumo is to help everyone become more productive by giving them back more time to do the things that they love, the things that they are good at and the things that they can earn from.
Okay… the frequently asked questions recently are how to file 1701Q for the first quarter? How do I opt in to the new 8% GRT option for those earning gross revenue of Php 3 Million pesos and below for the entire year?
For the sole purpose of this article, we will only tackle the 1701Q forms for Sole Proprietors, Licensed and Non-Licensed Professionals. I won’t be able to tackle 1702 since this form is used by Corporations and Partnerships.
What is 1701Q and 1701?
These are BIR forms for you to pay your Income Tax. The way income tax is computed is to get the taxable income which is Gross Sales minus Gross Purchases. Then the taxes are based on a tax table if you chose the Graduated IT Rate (and chose Itemized or Optional Standard Deduction).
With TRAIN or the new tax law, there is a new option for this who are earning Php 3 Million Gross Receipts / Revenue per year or less. This is the 8% Flat Income Tax Rate. The computation is based on your gross sales less exemptions.
How do I file my 1701Q for the First Quarter using Taxumo?
First of all, create an account in https://www.taxumo.com. The details that you need to place when you create an account should be based on your Certificate of Registration (COR) so keep a copy beside you and also have a soft copy (picture or scanned copy) available in your computer.
You will then be directed to a blank DASHBOARD.
Click on the Company Profile tab on the left side of the screen. Please make sure that all details are correct (ex. Taxpayer’s name is how it is written in your COR — an individual’s name is written as LAST NAME, FIRST NAME MIDDLE NAME). Just copy how it is written on your COR.
For filing your 1701Q, make sure that you have chosen the correct ATC or Alphanumeric Tax Code. First, you determine whether you’re Business Income, Income from Profession, or Mixed Income: to do so remember how you registered in the BIR.
If you are earning compensation income (from an employer who withholds compensation taxes and gives you a Form 2316) AND earning income from either business or profession, then you fall under “Mixed Income”
If you presented DTI and a Business Permit when you registered and you registered as a Sole pProp in the BIR, then you fall under “Business Income”
If you got an Occupational Tax Receipt or Professional Tax Receipt as part of registration or you did not submit any Business Permit to the BIR when you registered, then you under “Income from Profession”
Then now comes the choice if you want to avail or “opt-in” to the 8% Income Tax Flat Rate. If you want to avail of it, then choose the appropriate ATC with the 8% indicated. We will take care of helping you opt-in with the BIR.
*Some users, aside from opting-in to 8% via the first 1701, ask their BIR RDO to have it indicated in their COR or Certificate of Registration. If you want this, you can go to your RDO and ask the officer of the day if this is possible.
Also, don’t forget to set the Deduction Method.
The rule to follow: If your Expenses > 40% of your income, Itemized is the more tax efficient choice. If your Expenses <= 40% of your income, OSD is the more tax efficient choice.
The income source for people who have no day jobs is “solely from business”. Those with day jobs or local employers issuing 2316 forms and with employee contracts are “mixed from business & employment”.
Then choose if you are a Single Proprietor or Professional.
A lot of people ask about “DISPLAY FORMS FROM” also. Indicate here the date when you got your Certificate of Registration from the BIR. Then for uploading of a copy of the Certificate or Registration and Digital Signature, you can go back to this on a later date. This is not required by TAXUMO.
Now, you can start encoding your income and expenses. To file 1701Q- Quarter 1, make sure that you encode January to March income and expenses.
Don’t forget to add and encode the 2307 forms that you have at hand. Click on Withheld Tax then click on Received.
Click on Add Record. BTW, please have a picture or scanned copy of your 2307s in your computer / device before adding them here.
Just copy the details then click SUBMIT.
Once you are done encoding Income, Expenses and your Withheld tax forms, you can go back to your Cashflow Dashboard. On the right side of the screen, you will see your TAX CARDS. These are the taxes that you need to pay from the date when you received your Certificate of Registration. If you have filed some of these taxes offline or not via TAXUMO, just click on “Mark as Paid / not applicable”,
Do note that you can pay your Tax Dues with already computed BIR compromise, surcharges and penalties for tax dues a year prior to today.
One of the boxes that you will see is labeled Quarterly Income (Q1 Jan – Mar). This is the TAX CARD for 1701Q – First Quarter. To file it, click on “File now”. This screen will show.
Once you have filled that screen out, TAXUMO will show your tax dues. Most of us Sole Proprietors and Professionals will probably have Zero or Negative Filing for this quarter. This is because the Php 250,000 exemption is taken into account in the computation of your income taxes. So don’t panic! haha! 🙂
To pay your 1701Q, you can choose any of the available options. For each option (except PayPal/Credit Card), an email instruction will be sent by DRAGONPAY. Please be sure that you key in your correct email address when it is asked. The instructions will be sent there. Read carefully and just follow the steps indicated.
Once you’ve paid and followed the instructions via email, you’re done! You have just filed your 1701Q – Q1. Hope this article helps you out and answers our most pressing question this month on how to file 1701Q. 🙂
BTW, you will see the form, BIR confirmation and Payment confirmation in the “Past Filings” tab. If the status is still in processing, this means that you’re all done. Next steps are with us. Taxumo will be processing the forms in batches to make sure that we don’t “clog the pipes” of BIR, so to speak. Rest assured that your filing will be completed on or (more likely) before the tax deadline.
That’s it and I hope this article helped you out! 🙂
Doing your taxes is probably one of the most frustrating things every working person does. Even the more veteran people, when it comes to taxes, would find it hard to do when they don’t prepare for it well. In the Philippines, tax computations are one of the things that a lot of people fear, just because of how stressful it can get.
That being said sooner or later, everyone will have to do their taxes as part of their lives. And for those first timers that have no idea how to do them yet, don’t fret, because if you start out early, you might find it easier to do in the future! Plus keep in mind that there are a lot of helpful websites and applications that make it easier for you to do your taxes! That being said, here are some of the most important things that every first-time taxpayer should know.
There are many kinds of BIR forms that are dedicated solely to paying business taxes. For example, there are specifics forms applicable for self-employed individuals, employees of companies, and business owners. And there are forms that are to be used by Partnerships and Corporations.
It’s important that you know which one you should use so that you can fill out the right form and avoid penalties. Freelancers fall under self-employed individuals. We, freelancers, are considered non-licensed professionals. They, along with business owners who are sole proprietors usually do their own taxes. While people that are employed would usually have their companies do their taxes for them.
There are as many steps to the processes as there are BIR forms. Haha! I may be exaggerating, but the what’s for sure is that the steps to be taken take a whole lot of time from a business owner’s day. On the average, a business owner in the Philippines takes 2 days in a month (according to a PWC and World Bank report on taxes) spent just complying with taxes. When starting a business, I highly recommend that one should at least be familiar with the 101s of preparing and submitting your own taxes.
A good example would be to know more about income tax returns. These are forms that need to be submitted as long as you are making some kind of income or receiving compensation. Income is basically your gross revenue less expenses and when you do this, you get your taxable income. This is the basis for your taxes (income tax return). A self employed individual submits and pays for income taxes every quarter (Form 1701Q), the fourth quarter being the “famous” annual income tax (Form 1701 or 1701A).
If you are employed (have a day job) and running a business at the same time, you are considered to be a mixed income earner. How do you report taxes? You will secure BIR Form 2316 from your employer at the end of the year and use the values there and combine it with the income / expenses from your business. You do this only for form 1701 or Annual income tax form.
If you need help in preparing tax form 1701 and 1701A, feel free to check out https://www.taxumo.com and check out their blog. They have useful information for everyone!
The final step is to print out all of these documents and pay for it at the Authorized Agent Bank (basically a bank that accepts BIR payments in the city of your business).
Please prepare 3 copies for all of your accomplished BIR Forms along with the required deposit / bills payment slip and your payment.
In some cases, you won’t be needing to pay anything, and that would entail a “No Payment” Situation. These include refundable/ creditable tax returns, returns with excess tax credit carry over, and returns that are qualified for a second instalment. These “no payment” transactions just need to be filed and stored together with the BIR confirmation via the eBIR Forms system.
This article detailed the very basics of what you need to know about taxes. In the Philippines. Tax computations are frustrating, however, as long as you prepare everything and do it as early as you can, you won’t have a problem with doing your taxes any time soon.
If you need help with understanding all of these still, just ask Taxumo.
P.S. I’m a co-founder of Taxumo, whose mission is to help people start and sustain a business! 🙂 Feel free to contact us!
Are you one of those freelancers who still ask why you need to pay your taxes?
I have heard many freelancers express their fear and disappointment about paying their taxes. “Why should we pay when we don’t have a stable income?” “Why should we pay when we can hide what we earn since we earn online?… the government doesn’t have to know!” Well, for the record, it’s not only freelancers who feel this way. For the longest time, this has been the sentiment of Filipinos in general.
It’s tough to live in a country where tax laws are so complicated. These laws are so complicated that you end up not paying at all. It’s difficult balancing understanding taxation with looking and working for clients as a freelancer. There’s just not enough time.
If you are facing these same dilemma as a freelancer, then I am here to tell you that there is nothing to fear. Instead of thinking of all of the disadvantages, let me share with you why I pay taxes as a freelancer. Let me give you the lo down why it’s actually beneficial to pay taxes and become “legit” self-employed individuals.
Enjoy your income! Enjoy being a Freelancer.
What good is hard-earned money when you can’t enjoy it. We all want to travel, have cars, own a house, etc. But in order to get our VISA approved or our car or home loans approved, we need to show proof of income. Since we are not “employed”, we don’t have a payslip to show or a Certificate of Employment to present. The chances that our VISA will be denied is high.
When you regularly pay your taxes as a freelancer, you have your tax forms that you can show as supporting document when you apply for a VISA or for loans. Your chances to get approved are higher, and you don’t have to worry about not ever having any proof of income. Remember though that you need to be a regular and consistent tax payer, meaning you have tax forms for every kind of tax that you need to pay and you never skipped filing / paying your taxes. To make it easier for you, you can check out https://www.taxumo.com to help you with your taxes.
Easily verify your PayPal account and will never encounter problems if your Business Documents are in place
PayPal is now strict when it comes to presenting proof of your existence. PayPal will require you now to present these “proofs”. This I think is a good move. This keeps all scammers away and protects all of us non-scammers! Here are the requirements from PayPal.
Proof of Identity: Present a valid proof of identity
PayPal accepts a copy of:
– Your national ID card (front and back),
– Your driving license (front and back),
– Your Passport, or
– Other photo ID that was issued by a government body
All of the information below must be visible on the document:
– First and last name
– Date of birth
– Date of issue and expiry
– Document ID number
Note: The document needs to be fully visible. Partial documents cannot be accepted as a valid proof of identity.
Proof of Business Address: Verify your business address by providing a valid proof of address
PayPal accepts a copy of:
– Utility bills (phone and broadband services, health insurance, gas, water, electricity, etc.)
– Bank or credit card statements
– Any other government-issued letters or statements in your name
You can take a photo of your document and upload it to your PayPal account. You can also send us a copy or a screenshot of your online bills/statements.
They do not accept:
– Purchase receipts/invoices
– Partial documents
– Screenshots of your online banking or service pages
The name and address on the documents must match those on your PayPal account.
The proof of address document must be dated within the last 6 months.
We cannot accept P.O. Box addresses as physical address verification.
Business Info: Verify your business entity by providing a proof of business documentation What is a valid proof of business?
Please submit a copy of your Business Registrations (Business registrations, Memorandum/Article of Association, Certificate of Incorporation or equivalent).
This document(s) must collectively contain the following information:
Who owns or controls your business,
The business name, registration number, and
The latest validity period of the business.
These are the things that you need to present. When you register with the Bureau of Internal Revenue in the Philippines as a Freelancer, you will have a Certificate of Registration or a COR. You will be able to submit this as proof of business. Once you have a COR though, you will need to regularly pay your taxes for your freelancing business.
Here is a quick video on how to sign up for a PayPal account:
Get bigger and higher paying Local Clients!
The thing about getting international or foreign clients is that there is a lot of competition. I’ve seen though that the local landscape is in dire need for more suppliers.
Local companies are now open to hiring independent contractors. In order to land a job with huge corporations or even just so you can haggle your pay, you need to be able to issue an official receipt.
Official receipts are documents that support sales of service, and it is issued upon collection of payment from customers. The large companies use official receipts as supporting documents for accounting entries that they create, and they also use it as “expense” when they compute for their own taxes.
So as a freelancer, this is what I do. I go through a supplier accreditation process. This process requires me to submit all of my business documents.
Then when I win a project, I send an invoice so that I can bill for services. Most local clients accept paperless invoices, such as a PayPal invoice. You can prepare your invoice conveniently using PayPal then you can send it through email. You can also use it as a reminder to collect payment and even send recurring payments to continuous projects.
After payment has been given, this is the time when you send the BIR Official Receipt.
Be a Responsible Filipino Citizen
Paying taxes is our duty as Filipino Citizens. If we truly want to help our country grow and prosper, we need to pay your taxes as a freelancer. Every day, we are experiencing things that we paid for with our taxes (drive through highways, take public transportation, etc.). If we want to see more improvement, we need to do our part and contribute by paying your taxes.
Also, if we want a voice, we need to earn that voice. I don’t think we have the right to complain if we’re not at least paying our taxes 🙂
Avoid being Penalized
In my opinion, this is the last and the least of your worries. If you are regularly paying then you need not worry about this. But for your information, yes, you can be imprisoned for tax evasion and non-filing of appropriate forms.
Failing to file and pay your taxes come with hefty penalties and can range from imprisonment for 2 to four years. Summed up, it can reach as high as up to five times than your original tax due. So, it would be better to pay your dues and avoid being penalized.
Personally, my freelancing business grew, because I’m legit and I pay taxes. Business partners, brands, and other people that I work with and plan to work with respect and trust me more, because I have a legit business. Having business documents will open you up to more opportunities and tools that you can use.
It’s always good to start your freelancing career the “legit” way, so you need not backtrack and fix stuff.
Work well and do it right! Pay your taxes as a freelancer!