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TaxesBIR Form 1604e and BIR Form 1604c – How to File Them

January 31, 2025
Home » BIR Form 1604e and BIR Form 1604c – How to File Them

Tax compliance is a vital aspect of doing business in the Philippines. Among the many forms required by the Bureau of Internal Revenue (BIR), two critical forms stand out: BIR Form 1604E and 1604C. These forms report the income tax withheld on compensation and non-employee income payments. If you are a business owner or tax professional, understanding how to file BIR forms 1604E and 1604C properly is crucial for staying compliant with Philippine tax regulations. In this guide, we will delve into the requirements, filing procedures, deadlines, and penalties for these forms and their key differences.

BIR 1604C vs 1604E: Key Differences

Although the BIR 1604C and BIR 1604E are similar in reporting taxes withheld, the difference lies in the type of income each form reports. Understanding these differences is crucial to ensure correct filing and avoid errors.

  1. BIR 1604C:
    • Used for Employee Compensation: This form is filed by employers who must withhold taxes on employee compensation.
    • Income Type: It reports taxes withheld from salaries, wages, bonuses, and other benefits of employees.
  2. BIR 1604E:
    • Used for Non-Employee Payments: This form is filed by businesses that pay independent contractors or non-employee service providers.
    • Income Type: It includes income payments like professional fees, commissions, and other similar income paid to non-employees.

In summary, while both forms report withheld taxes, BIR 1604C is for employee-related income, and BIR 1604E covers payments to non-employees. Ensuring the proper form is filed for the correct type of income is essential for accurate tax reporting.

BIR Tax Return Requirements for 1604C and 1604E

The BIR 1604C and BIR 1604E are essential tax forms for businesses in the Philippines, each serving a different purpose. These forms are required to file annual tax returns for withheld taxes on employee compensation and non-employee payments.

BIR 1604C (Income Tax Withheld on Compensation) Requirements:

  1. Who Needs to File: Employers must file the BIR 1604C for employee compensation.
  2. Purpose: Reports the tax withheld on employee salaries, wages, and compensation.
  3. Supporting Documents:
    • Monthly and quarterly withholding tax returns (e.g., BIR 1601C).
    • Employee salary details, including gross earnings and deductions.
    • Tax payments are made throughout the year.
  4. Deadline: The form should be filed on or before January 31st of the following year.

BIR 1604E (Income Tax Withheld on Non-Employee Payments) Requirements:

  1. Who Needs to File: Businesses that pay non-employees (such as contractors or professionals).
  2. Purpose: Reports the tax withheld on income payments like professional fees, commissions, and other non-employee services.
  3. Supporting Documents:
    • Monthly withholding tax returns (e.g., BIR 1601E).
    • Records of non-employee income payments and corresponding tax deductions.
  4. Deadline: This form must also be filed on or before January 31st of the following year.

How to File BIR 1604C and 1604E in the Philippines

Filing the BIR 1604C and 1604E forms requires businesses to follow a step-by-step procedure to ensure compliance with tax regulations. Here’s how to file each of these forms:

Step 1: Prepare the Necessary Documents

Before filing, businesses should gather all supporting documents to ensure that the information entered is accurate. This includes:

  • Employee salary details for BIR 1604C or non-employee income records for BIR 1604E.
  • Monthly withholding tax reports (e.g., BIR 1601C for employees or BIR 1601E for non-employees).
  • Proof of tax payments made throughout the year.

Step 2: Access the BIR eFiling System

BIR 1604C and BIR 1604E can be filed online using the BIR eFiling Portal. To do so, you must create an account on the BIR website to access the filing system.

Step 3: Complete the Form

Once logged in, select the appropriate form (1604C or 1604E) and fill out the form with accurate details, such as the total taxes withheld, payments made, and any relevant tax payments.

Step 4: Review and Submit

After filling out the form, carefully review all entries to ensure that no information is missing or incorrect. Verify that all tax amounts are correctly reported. Once you’re satisfied with the accuracy, submit the form electronically.

Step 5: Pay Any Taxes Due

If taxes are due, pay using the BIR online payment facilities. Payments should be made before the filing deadline to avoid penalties.

Step 6: Retain the Acknowledgment Receipt

After successfully submitting the form, the BIR will issue an acknowledgment receipt. Make sure to keep this as proof of submission for future reference.

Key Deadlines for Filing BIR 1604C and 1604E

Both the BIR 1604C and BIR 1604E forms must be filed on or before January 31st of the year following the tax year being reported. This means businesses must file annual tax returns and submit them to the BIR by the end of January each year.

It’s essential to stay updated on any changes to these deadlines, as the BIR may sometimes extend the deadlines or announce special filing procedures. Failure to file on time can result in significant penalties, impacting your business financially.

Penalties for Late Filing of BIR 1604C and 1604E

Failing to submit the BIR 1604C and BIR 1604E forms on time can result in various penalties, including:

  1. Surcharge: A 25% penalty for late filing or non-filing of the tax forms. This penalty is applied to the tax due.
  2. Interest: A 20% per annum interest charge will be applied to the amount of tax due. This interest will continue to accumulate until the taxes are fully paid.
  3. Compromise Penalty: In some cases, the BIR may impose a compromise penalty for violating tax laws or regulations.

To avoid these penalties, filing both forms before the deadline is essential. If you are uncertain about the filing process or need assistance, consider consulting a professional tax service provider to ensure everything is done accurately and on time.

Why Is BIR Tax Compliance Important for Your Business?

Ensuring the timely filing of BIR 1604C and 1604E forms is fundamental to maintaining tax compliance in the Philippines. Adhering to tax filing deadlines helps avoid fines and surcharges and fosters good relationships with the tax authorities, demonstrating your business’s commitment to transparent and responsible financial practices.

By filing these forms, businesses contribute to the proper functioning of the Philippine tax system, ensuring the government can collect the necessary funds to support public services and development projects.

Stay Compliant with BIR 1604C and 1604E Filing.

In conclusion, BIR 1604C and BIR 1604E are essential tax forms for reporting income tax withheld on employee compensation and non-employee income in the Philippines. Filing these forms on time and accurately is critical to maintaining good standing with the Bureau of Internal Revenue and avoiding penalties.

At BusinessRegistrationPhilippines.com, we specialize in assisting businesses with tax compliance in the Philippines. This includes helping you file BIR tax forms, such as the 1604C and 1604E. Our team of experts can guide you through the BIR 1604C and 1604E filing procedures and ensure that your business complies with all legal requirements.

Is Assistance Available?

Yes, BusinessRegistrationPhilippines.com can assist you with BIR 1604C and 1604E filing. We provide expert advice and services to help you comply with Philippine tax regulations and focus on growing your business. Contact us today to ensure your tax filings are accurate and timely!

Reach out today to schedule an initial consultation with one of our experts. 

 

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Tax compliance is a vital aspect of doing business in the Philippines. Among the many forms required by the Bureau of Internal Revenue (BIR), two critical forms stand out: BIR Form 1604E and 1604C. These forms report the income tax withheld on compensation and non-employee income payments. If you are a business owner or tax professional, understanding how to file BIR forms 1604E and 1604C properly is crucial for staying compliant with Philippine tax regulations. In this guide, we will delve into the requirements, filing procedures, deadlines, and penalties for these forms and their key differences.

BIR 1604C vs 1604E: Key Differences

Although the BIR 1604C and BIR 1604E are similar in reporting taxes withheld, the difference lies in the type of income each form reports. Understanding these differences is crucial to ensure correct filing and avoid errors.

  1. BIR 1604C:
    • Used for Employee Compensation: This form is filed by employers who must withhold taxes on employee compensation.
    • Income Type: It reports taxes withheld from salaries, wages, bonuses, and other benefits of employees.
  2. BIR 1604E:
    • Used for Non-Employee Payments: This form is filed by businesses that pay independent contractors or non-employee service providers.
    • Income Type: It includes income payments like professional fees, commissions, and other similar income paid to non-employees.

In summary, while both forms report withheld taxes, BIR 1604C is for employee-related income, and BIR 1604E covers payments to non-employees. Ensuring the proper form is filed for the correct type of income is essential for accurate tax reporting.

BIR Tax Return Requirements for 1604C and 1604E

The BIR 1604C and BIR 1604E are essential tax forms for businesses in the Philippines, each serving a different purpose. These forms are required to file annual tax returns for withheld taxes on employee compensation and non-employee payments.

BIR 1604C (Income Tax Withheld on Compensation) Requirements:

  1. Who Needs to File: Employers must file the BIR 1604C for employee compensation.
  2. Purpose: Reports the tax withheld on employee salaries, wages, and compensation.
  3. Supporting Documents:
    • Monthly and quarterly withholding tax returns (e.g., BIR 1601C).
    • Employee salary details, including gross earnings and deductions.
    • Tax payments are made throughout the year.
  4. Deadline: The form should be filed on or before January 31st of the following year.

BIR 1604E (Income Tax Withheld on Non-Employee Payments) Requirements:

  1. Who Needs to File: Businesses that pay non-employees (such as contractors or professionals).
  2. Purpose: Reports the tax withheld on income payments like professional fees, commissions, and other non-employee services.
  3. Supporting Documents:
    • Monthly withholding tax returns (e.g., BIR 1601E).
    • Records of non-employee income payments and corresponding tax deductions.
  4. Deadline: This form must also be filed on or before January 31st of the following year.

How to File BIR 1604C and 1604E in the Philippines

Filing the BIR 1604C and 1604E forms requires businesses to follow a step-by-step procedure to ensure compliance with tax regulations. Here’s how to file each of these forms:

Step 1: Prepare the Necessary Documents

Before filing, businesses should gather all supporting documents to ensure that the information entered is accurate. This includes:

  • Employee salary details for BIR 1604C or non-employee income records for BIR 1604E.
  • Monthly withholding tax reports (e.g., BIR 1601C for employees or BIR 1601E for non-employees).
  • Proof of tax payments made throughout the year.

Step 2: Access the BIR eFiling System

BIR 1604C and BIR 1604E can be filed online using the BIR eFiling Portal. To do so, you must create an account on the BIR website to access the filing system.

Step 3: Complete the Form

Once logged in, select the appropriate form (1604C or 1604E) and fill out the form with accurate details, such as the total taxes withheld, payments made, and any relevant tax payments.

Step 4: Review and Submit

After filling out the form, carefully review all entries to ensure that no information is missing or incorrect. Verify that all tax amounts are correctly reported. Once you’re satisfied with the accuracy, submit the form electronically.

Step 5: Pay Any Taxes Due

If taxes are due, pay using the BIR online payment facilities. Payments should be made before the filing deadline to avoid penalties.

Step 6: Retain the Acknowledgment Receipt

After successfully submitting the form, the BIR will issue an acknowledgment receipt. Make sure to keep this as proof of submission for future reference.

Key Deadlines for Filing BIR 1604C and 1604E

Both the BIR 1604C and BIR 1604E forms must be filed on or before January 31st of the year following the tax year being reported. This means businesses must file annual tax returns and submit them to the BIR by the end of January each year.

It’s essential to stay updated on any changes to these deadlines, as the BIR may sometimes extend the deadlines or announce special filing procedures. Failure to file on time can result in significant penalties, impacting your business financially.

Penalties for Late Filing of BIR 1604C and 1604E

Failing to submit the BIR 1604C and BIR 1604E forms on time can result in various penalties, including:

  1. Surcharge: A 25% penalty for late filing or non-filing of the tax forms. This penalty is applied to the tax due.
  2. Interest: A 20% per annum interest charge will be applied to the amount of tax due. This interest will continue to accumulate until the taxes are fully paid.
  3. Compromise Penalty: In some cases, the BIR may impose a compromise penalty for violating tax laws or regulations.

To avoid these penalties, filing both forms before the deadline is essential. If you are uncertain about the filing process or need assistance, consider consulting a professional tax service provider to ensure everything is done accurately and on time.

Why Is BIR Tax Compliance Important for Your Business?

Ensuring the timely filing of BIR 1604C and 1604E forms is fundamental to maintaining tax compliance in the Philippines. Adhering to tax filing deadlines helps avoid fines and surcharges and fosters good relationships with the tax authorities, demonstrating your business’s commitment to transparent and responsible financial practices.

By filing these forms, businesses contribute to the proper functioning of the Philippine tax system, ensuring the government can collect the necessary funds to support public services and development projects.

Stay Compliant with BIR 1604C and 1604E Filing.

In conclusion, BIR 1604C and BIR 1604E are essential tax forms for reporting income tax withheld on employee compensation and non-employee income in the Philippines. Filing these forms on time and accurately is critical to maintaining good standing with the Bureau of Internal Revenue and avoiding penalties.

At BusinessRegistrationPhilippines.com, we specialize in assisting businesses with tax compliance in the Philippines. This includes helping you file BIR tax forms, such as the 1604C and 1604E. Our team of experts can guide you through the BIR 1604C and 1604E filing procedures and ensure that your business complies with all legal requirements.

Is Assistance Available?

Yes, BusinessRegistrationPhilippines.com can assist you with BIR 1604C and 1604E filing. We provide expert advice and services to help you comply with Philippine tax regulations and focus on growing your business. Contact us today to ensure your tax filings are accurate and timely!

Reach out today to schedule an initial consultation with one of our experts.