Wednesday, March 9, 2011
The Philippines’ Bureau of Internal Revenue (BIR) has promulgated regulations requiring the filing by certain taxpayers of an annual information return (AIR), either alone or in addition to their annual tax return, beginning with income earned in the 2010 tax year.
In a recent revenue regulation, the BIR states that individual taxpayers, including estates and trusts, resident aliens and non-resident aliens engaged in a trade or business in the Philippines, should, if they file an annual tax return, also complete an AIR to include their income during the fiscal year that has already been subjected to final withholding tax and gross income excluded under the tax code.
Furthermore, certain individual taxpayers who are not currently required to file a tax return should still file the AIR. That includes those with “pure compensation income, derived from sources within the Philippines, the income tax on which has been correctly withheld, whose annual taxable income exceeds PHP500,000 (USD11,500).”
In addition, “individuals, estates and trusts whose sole income has been subjected to final withholding tax, and the aggregate tax withheld exceeds PHP125,000 annually, whether or not remitted to the BIR”; and “individuals whose sole income is exempt from income tax and whose total annual exempt income exceeds PHP500,000 annually”, are also required to file an AIR.
The filing deadline is April 15 each year for those filing an AIR and an annual tax return together, while May 15 each year is the deadline for those filing the AIR only.