The new schemes and rules for personal income tax under the Tax Reform for Acceleration and Inclusion (TRAIN) law have been officially released by the Bureau of Internal Revenue (BIR) earlier this week.
The set of guidelines, published as Revenue Regulations 8-2018 (RR 8-2018), discusses the specifics on the taxable income of “compensation earners, self-employed, mixed-income”, as well as “resident and non-resident alien earners in the country”, and indicates the proper computations, according to the Manila Bulletin.
In a report by Inquirer.net, BIR Deputy Commissioner Marissa O. Cabreros said that despite the RR being released just recently by the agency, earlier advisories and information were already disseminated.
She also added that the goal of the RR was “to organize or properly guide the taxpayers” on the proper implementation of the changes brought about by the tax reform.
The mandate exempts those earning a taxable income P250,000 and below annually from paying personal income tax, and imposes higher earners with lower personal income tax rates, according to the Department of Finance and Manila Bulletin.
Manila Bulletin and GMA News also noted in their articles that in the case of self-employed individuals, such as businesspeople, with a gross income above P250,000 but not more than the P3 million VAT limit may choose between complying with “the graduated tax rates under section 24(A)(2)(a) of the Tax Code” or a fixed 8 percent gross income tax, as stated in the RR.
In the event that the gross sales exceeds the P3 million ceiling, the self-employed individual will be automatically subject to the graduated tax rate option even if he/she opted for the 8 percent flat rate at first, as stressed in the Manila Bulletin report.
You may click this link to access a copy of the Revenue Regulations 8-2018 from the BIR website.