Philippines substituted tax filing

Qualify for Substituted Filing? Here’s What Filipino Employees Need to Know

Philippines substituted tax filing / Qualify for your employer to file income taxes on your behalf.  Read this guide to substituted filing eligibility.

Filipinos employed by companies are often eligible for substituted filing of income taxes. This means the employer files and pays taxes on the employee’s behalf. If you receive a BIR Form 2316 from your company, you likely qualify for Philippines’ substituted tax filing. Here is what employees in the Philippines need to know:

Philippines substituted tax filing

What is Substituted Filing?

Substituted filing is when your employer calculates, files, and remits your income tax payments to the Bureau of Internal Revenue (BIR). As a qualified employee, your taxes are withheld from each paycheck throughout the year by the company.

On your behalf, the employer then files an annual income tax return before the April 15 deadline and pays any remaining balance. This saves employees from having to manually file Form 1700 and calculate taxes owed themselves.

Who Can Qualify for Substituted Filing?

To qualify for substituted filing, you must be a full-time employee receiving income exclusively from wages and other benefits provided by your employer. As an employee, you cannot earn any other taxable income from the sidelines beyond your normal job.

Some examples of those eligible:

  • Salaried corporate employees
  • Government sector employees
  • Factory workers and sales teams employed by a company

Self-employed individuals or those with multiple income sources do not qualify for substituted filing.

Requirements to Prove Qualification

To prove you qualify for substituted filing, your employer must provide you with a BIR Form 2316. This is the “Certificate of Compensation Payment/Tax Withheld” that details your income and taxes withheld for the year.

Presenting Form 2316 means your company has filed and paid taxes on your behalf. Keep this certificate as proof you qualify for substituted filing.

What If I Have Additional Income?

If you have income beyond your regular wages, such as from side jobs or investments, you must file taxes separately through non-substituted filing. Your employer will only file the taxes related to the income paid by the company.

For any additional taxable income, you will need to personally file using BIR Form 1700 before the deadline. Keep fully tax compliant by reporting all your income sources.

Maximize this beneficial tax filing method by ensuring you qualify. Talk to your employer if you have any questions about your eligibility for substituted filing as a Filipino taxpayer.

You don’t need to physically sign BIR Form 2316; however, e-signatures are accepted as per RMC 29-2021. Substituted filing is accepted until Feb 28th.  Employees-taxpayers are not required to file their tax returns with the BIR.

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  1. Catalina says:

    Learning about substituted filing and its benefits through your post has certainly alleviated some of the stress I had around tax season. It’s great to know that as employees, we have this convenient option thanks to our employers managing the bulk of the work!

  2. Melissa Cushing says:

    These are great tips for filing and a great way to avoid excess stress for tax season. I had no idea this was an option!

  3. This is such great info and it definitely taught me things I didn’t know before!

  4. i think there are similar or parallel rules like these across the world and learning and knowing of these definitely makes filing taxes a smoother more efficient process.

  5. Yes, my employer back then did the substituted tax filing for me. I was a regular employee. The substituted filing had its benefits, for sure.

  6. It’s great to know what to expect and how to maximize this filing method to stay tax compliant without the extra hassle.

  7. This sounds like a great service but what happens when you work a job and have contract income? Do you have to amend the filing? I know in the states we have to do everything manually.

  8. Substituted tax filing makes do much sense. A great benefit for salariés employees.

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