New Annual Income Tax Return for Individuals availing OSD and 8% Income Tax Rate
This Tax Alert is issued to inform all concerned on the newly issued Annual Income Tax Return (BIR Form 1701A) pursuant to Revenue Memorandum Circular No. 17-2019.
Starting taxable year 2018, BIR Form 1701A shall be used by individuals earning income purely from business/profession who elected optional standard deduction (OSD) or who availed 8% tax on gross sales/receipts and other income in lieu of graduated income tax rates.
Pursuant to the TRAIN Law as implemented, such individuals who elected OSD or 8% flat income tax rate are no longer required to submit financial statements.
Individuals earning income purely from business/profession who elected itemized deduction and those individuals earning both compensation income and income from business/profession shall still use old Annual Income Tax Return for self-employed individuals (BIR Form 1701).
The new return is already available manually and in Offline eBIRForms package v7.3, but is not yet available in the electronic filing and payment system (EFPS). As a work-around procedure, EFPS filers are advised to use the new return in Offline eBIRForms package v7.3.