Are You Exempted From Filing An Income Tax Return?

tax deduction tax exemption of BIR income tax return Philippines

The deadline for the filing of the income tax return is on the April 15th of each year. The taxable year would be the previous year. For example, on April 15 2019, you are going to file for your income tax return for the period January to December 2018.


What is an income tax? It is a tax on a person’s income less the deductions authorized for such types of income by the Tax Code. Resident citizens receiving income from sources within or outside the Philippines are required to file an income tax return.


Exclusions to the gross income are life insurance, gifts, compensation for injuries or sickness, amount received by insured as return of premium, income exempt under treaty, retirement benefits and pensions, and miscellaneous items.


Annual income tax return for individuals earning purely compensation income that includes non-business or non-profession income shall be filed by every resident deriving compensation income from all sources using BIR Form 1700.


BIR Form 1700 is also used to file for minimum wage earners or individuals who are exempt from income tax. Those whose gross compensation income does not exceed the total personal and additional exemptions must file using 1700.




Who are not required to file income tax returns?

  • If you are an individual earning purely compensation income whose taxable income does not exceed P250,000.
  • If you are an individual whose income tax has been withheld correctly by his employer, provided such individual has only one employer for the taxable year.
  • If you are an individual whose sole income has been subjected to final withholding tax or who is exempt from income tax pursuant to the Tax Code and other special laws.
  • An individual who is a minimum wage earner.
  • Those who are qualified under substituted filing.



Substituted filing applies when all the following requirements are present

– the employee received purely compensation income (regardless of amount) during the taxable year;

– the employee received the income from only one employer in the Philippines during the taxable year;

– the amount of tax due from the employee at the end of the year equals the amount of tax withheld by the employer;

– the employee’s spouse also complies with all 3 conditions stated above;

– the employer files the annual information return (BIR Form No. 1604-CF); and

– the employer issues BIR Form No. 2316 (Oct 2002 ENCS version) to each employee.


Minimum wage earners and those whose gross income do not exceed the personal and additional exemptions dictated by the BIR are exempted from filing their ITRs.


All taxpayers are entitled to a P50,000 personal exemption, while those with dependents have additional exemption of P25,000 for each qualified dependent, but not to exceed 4.


The return is filed on or before April 15 of each year covering income for the preceding taxable year.


Further reading,


The Bureau of Internal Revenue has provided a withholding tax calculator online to help you compute your taxes. The application is simply an automated computation of the withholding tax due based only on the information entered into by the user in the applicable boxes.


Access the calculator here,



For inquiries or suggestions on the Withholding Tax Calculator, you may e-mail

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