Monday, February 21, 2011

Concerns on Registration as Practicing Professional

Hi Marg, I was finding it hard to post my answers in the platform. So I'll answer it here. 

Hi birtaxinfo. I have many queries on registration as professional.
1. If both my parents are retired from government service and both are qualified senior citizens, would that qualify me as head of the family (as benefactor of qualified senior citizens)? Since I am the only one earning to date. If yes, what are the supporting documents needed for application for personal exemption?
2. How would my application go about If I am a practicing my profession in different areas who are under different RDOs? Do I fill up the Part IV of form 1901 or just Part V? I need guidance on this.
Thanks. I hope to be enlighted on these. It’s so difficult calling the BIR hotline.
Posted by marg at February 18, 2011, 1:09 pm

One more thing…
3. How do I know if my professional fee is subject to VAT? So that I know what to indicate in my future receipts. Thanks again!

Posted by marg at February 18, 2011, 4:03 pm

1. No, your parents may not be qualified. As Indicated in RR 10-2008. The term used is "Qualified Dependent Children". And they could not qualify as dependents as they are retirees who rely on their pension most probably.

2. Your practice of profession is not dependent on the areas you operate which are likely under different RDOS. When you practice your profession as SELF-EMPLOYED. Meaning you are not under an employer. You would likely have your own business address. Some use their home address. The RDO who has jurisdiction over your business address will be the RDO you will register as a PROFESSIONAL with the BIR. 

If Part IV applies to you then fill it up. It refers to multiple employments. 

Part V refers to your Current Main Employer. If you have an Employer, your Employer should fill that portion not you. If you have an employer and the same time practicing your profession then you are referred to as a Mix Income Earner. Meaning your earning income from your practice of your profession outside of your current employment of course. And another income coming from an employer. 

3. Your registration with the BIR RDO will determine if your VAT or Non VAT based on the info you give. If your registered as VAT Taxpayer. Then you will be required to impose a 12% VAT on top of your professional fee. The VAT is of course imposed on your clients, not you. You in turn are required to file and remit these to the BIR on a regular basis. Do ask for an orientation on how, when and where to pay/file your taxes. The RDO gives this orientation for businesses and professional like you. So don't hesitate to ask.

Please do take note that income as a PRACTICING PROFESSIONAL differs from income derive from EMPLOYMENT thru an EMPLOYER. As a PRACTICING PROFESSIONAL you have your own receipts under your name which you dispense for your clients.

While as an EMPLOYEE, it is your EMPLOYERs receipts which are being used.

Sorry, if I may sound like a broken record. It is just that a lot of people do not know much on this matter. So I hope that anyone who happens to read this blog post could be properly guided.


  1. Thanks birtaxinfo. That's quite clear to me now.

  2. hi birtaxinfo,

    I applied online for a TIN number, and I mistakenly put in Professional, even though I am not actually self-employed. I thought it was just asking if i was a professional (because I'm a registered nurse, I answered yes). When I went to the BIR office, I was very anxious to get it over and done with, and the BIR officer told me I needed to pay 500 pesos and issue official receipts and whatnot, and this was way over my head but I thought it was just normal. So i just paid the 500 and told him I would be back asap because I really just needed the TIN.

    I realize now that I declared myself as a practicing professional.. I currently work for an NGO, and they also deduct taxes from my salary. What do I do about this? I'm not at all a self-employed practicing professional..

    Thank you!

    1. Hi Kim,

      Getting a TIN is indeed required for us to get. But to register as PROFESSIONAL to which you were already informed by the BIR officer regarding that type of registration.

      You should have declined then and there so they could have assisted you to the correct or appropriate registration as an EMPLOYEE not as a SELF EMPLOYED.

      Since that registration not only requires you to issue receipts it likewise requires you to file on a MONTHLY basis on taxes as a PROFESSIONAL.

      Because that is what you registered as a PROFESSIONAL or SELF EMPLOYED not as an EMPLOYEE.

      Non Filing as required by your registration will incur an OPEN CASE each month.

      I suggest you correct your registration as soon as possible which will required you to visit your BIR branch again.

      However long the process may be you need to do it as soon as possible. Because not doing some, your open case will accumulate.

      Make a formal letter address to the Revenue District Officer of that BIR Branch regarding your concern.

  3. hi birtaxinfo,

    i've been employed since 2003 and have tin in rdo 40. for taxable year 2010 i seek an accountant's assistance to file for itr as self employed ( i work w online clients) with the same rdo code. the accountant computed 1701 form and had me pay it in the AAB. now i am in davao and was wondering how can i pay our itr because of rdo code.

    - can i pay in aab just like before?
    - also i have been reading about P500 annual fee for self employed. i was not told about this by the accountant before. should we file for a change in status of employment or something?

    i am really confused and its nearing the deadline so i don't want to incur penalties.


  4. Hi Anonymous,

    The AABs in Davao may not accept returns not under the Davao RDO.

    You need to update your registration to self employed. But you need to FIRST TRANSFER your TIN registration from RDO 40 to the RDO in Davao. Using 1905.

    Sorry, for this late reply. Being today as the deadline.

    Anyway, you need to first update your registration. And pay the annual fee. Starting off on the day you filed for update.

    You can opt to report your income for 2012 next year April 15, 2013.

    For this tax filing year 2012. The ITR that needs to be reported is your income for 2011.

    I do not know if the RDO in Davao will accept OUT OF DISTRICT FILING. But you can still try. I suggest you visit that office so they can assist you on this matter.

  5. Hi Tom,

    I am now on process for filing the COR for my profession. Your really a great help on everyone like me who are not fully aware of all these procedures, responsibilities as a self employed, etc. Please do clarify more about the OPEN CASE you've said for non filing.

    "Non Filing as required by your registration will incur an OPEN CASE each month."

    What is it? Is there any payment for the filing?

    1. Hi Fusia, when you get your COR. Your RDO or BIR branch should indicate what taxes you are required to file.

      Those taxes have a due date. You need to regularly file or pay any tax due under your business activities on the said due date.

      Under the Integrated Tax System of the BIR. Your registration is electronically monitored. So when you neglect file on the required due date. An OPEN CASE is automatically generated under your registration.

      So always be aware of that. The minimum penalty is 200 pesos if I'm not mistaken, even if you have not tax to pay, you are still required to file.

      Some people neglect to file as when a particular month comes and goes with no business coming in the company. They think that they need not file for they have no taxes to pay.

      That is incorrect to think that. EVen if you do not generate any income or business for that month you are still required to file. For you are required to do so regularly whether or not you had a business activity or not.

      That way once you file, the BIR personnel will record it in the ITS so NO OPEN CASE will be generated under your registration.

      Ask for an orientation on the taxes you are required to file and pay. Ask for the due dates on each tax type.

      The BIR Forms you will need to use to file. The tax due or taxes is based on your business activity.

      Taxes are based on your business activity. Although some may site that they have no business for an entire month or even a year.

      The BIR has an option to check if what you reported thru your tax filing is true.


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