Basic Taxation Law: Taxpayers Required to File Income Tax Returns


 Chapter 10

Taxpayers Required to File Income Tax Returns


A. Individuals RNCA

  1. Resident citizens receiving income from sources within or outside the Philippines: 

    • Individuals deriving compensation Income from two or more employers, concurrently or successively at anytime during the taxable year;

    • Employees deriving compensation income regardless of the amount, whether from a single or several employers during the calendar year, the income tax of which has not been withheld correctly (i.e., tax due is not equal to the tax withheld) resulting to collectible or refundable return; 

    • Individuals deriving other non-business, non professional related income in addition to compensation income not otherwise subject to a final tax;

    • Individuals receiving purely compensation income from a single employer, although the income of which has been correctly withheld, but whose spouse is not entitled to substituted filing

  2. Non-resident citizens receiving income from sources within the Philippines; 

  3. Citizens working abroad receiving income from sources within the Philippines;

  4. Aliens, whether resident or not, receiving income from sources within the Philippines.


  • R.A. No. 10963 incorporated the system of substituted filing of income tax return under the following conditions: CPWI

    1. Individual derives solely compensation income; 

    2. One employer in the Philippines

    3. Income tax withheld is equal to income tax due;

    4. Employer filed information return (BIR Form 1604 C) showing the income tax withheld on employees compensation income. 

      • This is tantamount to substituted filing of income tax return by employee.

      • It serves the same purposes for which ITR has been filed, e.g., bank loan, passport application and the like. 

      • An individual whose taxable income does not exceed P250,000.00 shall not be required to file an income tax return. 

  • Minimum wage earners are not required to file an income tax return.

  • Minimum wage earner shall refer to a worker in the private sector paid the statutory minimum wage, or to an employee in the public sector with compensation income of not more than the statutory minimum wage In the non-agricultural sector where he/she Is assigned. He Is not required to file an income tax return. 


B. Corporations No Matter How Created or Organized Including General Professional Partnerships

  1. Domestic corporations receiving income from sources within and outside the Philippines;

  2. Foreign corporations receiving income from sources within the Philippines


 C. Estates and Trusts Engaged in Business

  1. Estate under judicial settlement; 

Trust - irrevocable, both as to corpus (trust property) and as to income earnings

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