Freelancers often wonder: “3% to 8% can I still change?” This question matters because understanding your tax classification affects how much you pay, how you invoice clients, and your net income. Knowing whether you can adjust your tax rate or contribution ensures you avoid penalties and maximize your earnings.
What Does 3% to 8% Mean?
The 3% to 8% range usually refers to the percentage tax rate applicable to freelancers or small businesses in the Philippines:
- 3% for non-VAT registered freelancers with annual sales below ₱3M
- 8% for certain VAT-exempt services or specific business types
This percentage directly affects the portion of your income that goes to taxes.
Why Freelancers Care About Changing It
Freelancers may want to change their rate because:
- They have crossed a revenue threshold
- Their services now fall under a different tax category
- They want to optimize taxes legally
Adjusting your percentage ensures compliance and prevents overpayment or underpayment.
Can You Still Change 3% to 8%?
Yes, changes are possible, but there are rules:
1. Determine Your Current Classification
Check your BIR Certificate of Registration (COR) to see your current tax type.
2. Verify Eligibility for Change
You can request a change if:
- You’ve crossed the ₱3M annual sales threshold
- You switched to VAT-exempt services
- Your business structure or nature has changed
3. Submit the Request
File the request at your Revenue District Office (RDO). You may need to provide:
- Updated income records
- BIR Form 1905 (Application for Registration Information Update)
4. Wait for BIR Approval
The BIR will review your application. Once approved, your new percentage rate applies moving forward.
5. Adjust Your Accounting
Update your invoices, books of accounts, and monthly computations based on the new rate.
When and Who Should Consider This
- Freelancers approaching or exceeding ₱3M annual revenue
- Service providers switching business types or clients
- Small business owners seeking legal tax optimization
Changes must happen before filing quarterly or annual returns to avoid misreporting.
Tips for Freelancers
- Track your income monthly to know if a change is needed.
- Keep digital copies of all BIR forms and approvals.
- Consult a tax professional for complex cases.
- Update invoices immediately after BIR approves your new rate.
- Plan for both scenarios (3% and 8%) to understand how your income will be affected.
Understanding 3% to 8% can I still change is essential for freelancers to remain compliant, avoid penalties, and optimize income. By knowing your eligibility, submitting the proper forms, and updating your records, you can adjust your tax percentage legally and confidently.
👉 Follow us on our socials for more high-paying, effective freelancing and tax tips. (TikTok, YouTube, Facebook, and Instagram) and read our blogs for more tax tips designed for freelancers!
Ready to make tax filing easy? Download our Ultimate DIY BIR Tax Compliance Guide, try our Freelancer Income Tax Calculator, and schedule your Free Tax Consultation Call to take the next step toward confident, stress-free tax filing!