Welcome to a Simpler Tax Era
Freelancers in the Philippines have long faced a maze of tax rules, making compliance a headache. But now, with the Ease of Paying Taxes EOPT Law, RR No. 6-2024, a brighter future awaits. This law, implementing Section 45 of RA No. 11976, brings changes crafted to ease the burden for freelancers. Let’s explore how these changes can benefit you.
Why the Need for Change? Purpose of EOPT Law
Freelancers, being one-person businesses, often find tax rules overwhelming. Furthermore, the old system added fees and complexities, making things harder. Thus, the EOPT Law steps in to simplify, recognizing freelancers’ struggles and offering relief.
Benefits of the EOPT Law for Freelancers
- Removal of the ₱500 Annual Registration Fee: The EOPT Law abolishes the burdensome ₱500 annual registration fee, providing financial relief to freelancers and enabling them to allocate resources more efficiently towards their businesses.
- New Classification of Taxpayers: Freelancers opting for the 8% Income Tax Rate are now classified under the Micro Taxpayers Group, simplifying tax processes and ensuring tailored support for their unique needs.
- Section 43. Digitalization of Bureau of Internal Revenue Services.
- The BIR is ordered to adopt an integrated digitalization strategy by providing automated end-to-end solutions for the benefit of taxpayers and to minimize face-to-face transactions.
- The BIR already started this with the Online Registration and Update System (ORUS) and Digital TIN ID.
- Section 44. Ease of Paying Taxes and Digitalization Roadmap
- Priority will be given to micro and small taxpayers, which Freelancers and most of the individual taxpayers belong to.
- Main focus is utilizing technology for Ease of Compliance and Taxpayer Convenience.
- The BIR will develop an Ease of Paying Taxes and Digitalization Roadmap.
- Priority will be given to micro and small taxpayers, which Freelancers and most of the individual taxpayers belong to.
- Section 45. Special Concessions for Certain Taxpayers – Available to Micro and Small Taxpayers
- Changes in the Annual ITR for Individual Taxpayers
- The ITR shall consist of a maximum of two (2) pages.
- For 8% and OSD individual taxpayers, this will have no or minimal effect, as we are already using a 2-page ITR.
- For Graduated Income Tax – Itemized Deduction taxpayers, this will make your filing easier as the Annual ITR will now be 2 pages, previously 4 pages.
More Benefits 👇
- Lowering of Penalties
- A. Civil Penalties. Now 10%, previously 25%.
- B. Interest: 50% reduction. Currently, the interest is around 12%. With this changes, interest penalty will be around 6%.
- C. Failure to file certain information returns. Now P500, previously P1,000.
- D. Reduced Compromise Penalty of at least 50% for violations of Sections 113, 237 and 238 of the National Internal Revenue Code.
- Business Closure will be available ONLINE 😎
- Currently, applying for a BIR Closure is very tedious and can only be done manually. The option to process it online will definitely be a game changer.
- With these changes in our tax laws, we can see the seriousness of our Government to push the Digitalization of Philippine Taxation.
Embracing the Ease of Paying Taxes (EOPT) Law, Embracing a Brighter Future
The EOPT Law transforms how freelancers pay taxes in the Philippines. It simplifies procedures, reduces penalties, and employs more digital tools. Consequently, freelancers can easily comply with taxes, allowing them to focus on their work without worrying about complex tax issues.
Stay Informed, Stay Ahead
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