There are different types of taxpayers you should be familiar with here in the Philippines. It oftentimes causes public confusion because these aren’t taught to everyone nor is there a resource for all these things.

And that’s why we’re here.

6 Common Types of Taxpayers

These definitions come from the BIR itself. You’ll find this as the ones in quotes. Then, I just added some explanations and examples after.

1) Self-employed

“Single Proprietors are persons engaged in trade or business not including performance of services as employee.”

The form to use when applying for this type of taxpayer is the BIR Form 1901.

This means if you are starting your own business as a Sole Proprietorship (registered with the DTI), this should be your taxpayer type.

BIR Form 1901

You can apply for a new TIN online via BIR’s eTIN. Do not register online if you already have a TIN (e.g. you worked as an employee) then decided to open a business.  Go to your RDO personally or have someone do it for you.

2) Professionals

“Professionals are self-employed individuals in the practice of profession or calling not including performance of services as employee. Examples of these are those engaged in computer, creative or performing arts, engineering, health, law, social science, teaching, personnel and human resource development, finance and sales, writing and journalism and others.”

Just like for self-employed, the form to use when applying for this type of taxpayer is the BIR Form 1901.

Freelancers fall under this category. Those with PRC licenses fall under this category. Consultants fall under this category.

You can apply for a new TIN online via BIR’s eTIN. Do not register online if you already have a TIN (e.g. you worked as an employee) then decided to open a business. Go to your RDO personally or have someone do it for you.

3) Mixed-Income

“Mixed Income Earners are persons who are any two of the following: Professionals, Single Proprietors, and Local Employees.

For instance, a teacher who is employed in a school, offers tutorial services for a fee, and operates a retail sales business on the side should register as a local employee, professional, and single proprietor all at the same time.”

As the name implies, it’s a type of taxpayer that means you’re registered to at least two other types. From our experience, this is usually the people who are still employed (corporate) but also have their own business (food stall).

You can apply for a new TIN online via BIR’s eTIN. Do not register online if you already have a TIN (e.g. you worked as an employee) then decided to open a business. Go to your RDO personally or have someone do it for you.

4) Employees (aka Purely Compensation Earner)

“Local Employees are citizens of the Philippines who work and derive income from an employer based within the Philippines.”

Majority of Filipinos fall under this. If you are a fresh graduate and you are completing your pre-employment requirements, this is your taxpayer type.

Those entering the workforce should keep this in mind. Y

The form to use for this type of registration is the BIR Form 1902.

BIR Form 1902

As what we wrote last week, currently, there are only two ways to apply for a NEW TIN for employees: Offline by visiting your RDO; and Online via your employer’s account in eReg.

5) Under E.O. 98

“Persons Registering Under E.O. 98 are those individuals who are securing TIN to be able to transact with other government offices such as LTO, NBI, DFA, and others.”

This is the least common type. And for 99% of us, we don’t need to worry about this.

 

So there you have it. These are the 5 most common types of taxpayers in the Philippines. Of course, this list does not include legal entities like firms and other estates. This only covers the individual taxpayer types.

Have some questions? Feel free to leave a comment.
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