BIR Form 1700 – Annual Income Tax Return (Compensation Income)

A BIR Form 1700 – Annual Income Tax Return (Compensation Income) in the Philippines records the financial details the tax authority requires to determine what is owed for the period.

BIR Form 1700 is filed by employees who do not qualify for substituted filing under Section 51-A of the NIRC and BIR Revenue Regulations No. 3-2002. Substituted filing applies only when the employee has one employer for the entire taxable year and the employer correctly withholds the income tax. Employees who had two or more employers simultaneously or successively during the year must file BIR Form 1700 because the withholding from multiple employers cannot automatically compute the correct annual tax. Similarly, employees receiving compensation above PHP 3,000,000 for the year (even from one employer) must file because their withholding may be insufficient.

BIR Form 1700 applies the TRAIN Law graduated income tax rates under Section 24(A)(2)(a) of the NIRC as amended by RA 10963: 0% for annual taxable income up to PHP 250,000; 15% on the excess over PHP 250,000 up to PHP 400,000; 20% on the excess over PHP 400,000 up to PHP 800,000; 25% on the excess over PHP 800,000 up to PHP 2,000,000; 30% on the excess over PHP 2,000,000 up to PHP 8,000,000; and 35% on the excess over PHP 8,000,000.

The BIR Form 1700 also reflects the personal exemptions abolished by the TRAIN Law effective January 1, 2018. Under the pre-TRAIN law, employees were entitled to personal exemptions of PHP 50,000 (single) to PHP 100,000 (married with dependents). The TRAIN Law abolished these personal exemptions in exchange for the zero-tax rate on income up to PHP 250,000 per year.

The legal framework governing the BIR Form 1700 – Annual Income Tax Return (Compensation Income) in Philippines draws on several key statutes and regulatory bodies. Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Parties executing a BIR Form 1700 – Annual Income Tax Return (Compensation Income) in Philippines should confirm the document reflects current law, including any amendments enacted since the original drafting date. The National Internal Revenue Code (RA 8424) sets the foundational requirements.

BIR Form 1700 is required in the Philippines for employees who do not qualify for substituted filing and must personally file their annual income tax return.

BIR Form 1700 is required when an employee works for two or more employers during the taxable year — whether simultaneously (concurrent employers) or successively (one after another). Each employer withholds income tax based only on the compensation from that employer; the cumulative withholding from all employers will likely not equal the correct tax on the total annual compensation, requiring an ITR to settle the difference.

BIR Form 1700 is required when an employee's compensation for the taxable year exceeds PHP 3,000,000 — the threshold above which the employer is required to withhold at the higher TRAIN Law graduated rates, but which also triggers the individual's obligation to file personally under BIR Revenue Memorandum Circular No. 1-2018.

BIR Form 1700 is required when an employee discovers that their employer under-withheld income tax — for example, if the employer failed to account for bonuses, commissions, or back pay in the withholding computation — and the employee needs to report and pay the underpaid tax directly to the BIR.

BIR Form 1700 is required for employees of foreign employers who do not have a Philippine withholding agent. Non-resident alien employees performing services entirely outside the Philippines are not subject to Philippine income tax, but non-resident alien employees performing services within the Philippines are subject to income tax on their Philippine-sourced compensation under Section 25(A) of the NIRC and must file BIR Form 1700.

BIR Form 1700 is required when a Philippine government employee receives compensation from multiple agencies — for example, an employee with a main agency and a concurrent appointment in another government agency — as each agency withholds only on its own payroll.

BIR Form 1700 for the Philippines must include the following essential information to correctly compute and report the annual income tax on compensation.

Taxpayer Identification: Full legal name, TIN, civil status, date of birth, and complete address. Civil status affects the computation of tax on compensation paid to a spouse — particularly for the additional exemption rules applicable before 2018. Under TRAIN Law, civil status no longer affects the tax computation but is still required for BIR records.

Employment Information: Name, TIN, and address of each employer from whom compensation was received during the taxable year. For multiple employers, all employers must be listed with their corresponding withholding amounts as reflected in BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld) issued by each employer by January 31.

Total Gross Compensation Income: The aggregate gross compensation income from all employers — including basic salary, overtime pay, bonuses, commissions, allowances, and other remuneration — reported in Philippine pesos (PHP ₱). Non-taxable compensation (de minimis benefits under BIR Revenue Regulations No. 11-2018 not exceeding PHP 90,000, and mandatory contributions to SSS, PhilHealth, and Pag-IBIG) is excluded from taxable income.

Taxable Compensation Income: Gross compensation less non-taxable items equals taxable compensation income. Apply the TRAIN Law graduated rates under Section 24(A)(2)(a) of the NIRC: 0% up to PHP 250,000; 15% over PHP 250,000 to PHP 400,000; 20% over PHP 400,000 to PHP 800,000; 25% over PHP 800,000 to PHP 2,000,000; 30% over PHP 2,000,000 to PHP 8,000,000; 35% over PHP 8,000,000.

Total Tax Withheld and Balance Due: Aggregate the income taxes withheld by all employers (per BIR Form 2316 from each employer). If the total withheld is less than the computed tax, the employee pays the balance with the BIR Form 1700 filing using BIR Form 0605 (Payment Form) on or before April 15. If the total withheld exceeds the computed tax, the taxpayer may claim a refund under Section 76 of the NIRC.

Mode of Filing: BIR Form 1700 may be filed manually at the Revenue District Office or Authorized Agent Bank, or electronically via the BIR Electronic Filing and Payment System (eFPS) for eFPS-enrolled taxpayers, or via eBIRForms for non-eFPS filers.

Additional compliance elements for a BIR Form 1700 – Annual Income Tax Return (Compensation Income) used in Philippines include: Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Forms-legal.com provides this template as a starting point for Philippines-compliant documentation.