BIR Form 1604C and BIR Form 1604E and How to File Them

January 31, 2025
Seal of the Bureau of Internal Revenue (Philippines) over tax forms

In the Philippines, tax compliance is a serious aspect for businesses and individuals alike. Among the many tax forms required for compliance, the BIR 1604C and BIR 1604E are two forms businesses must file to report the income tax withheld on compensation and income payments to non-employees, respectively. In this article, we will explore these two forms in detail, providing insights on how to file them, the penalties for late submission, and the differences between them.

BIR Tax Forms in the Philippines: Why Are They Important?

BIR tax forms are integral to maintaining tax compliance in the Philippines. They allow the government to track income, withholding taxes, and other tax obligations, ensuring that businesses and individuals fulfill their financial responsibilities. By filing forms such as the BIR 1604C and 1604E, companies can avoid penalties and demonstrate their commitment to adhering to the tax regulations the Bureau of Internal Revenue set forth.

Tax compliance is vital for companies, ensuring they are not subjected to legal issues or penalties. The timely and accurate submission of these forms helps build credibility with the authorities and fosters transparency in financial dealings.

BIR 1604E vs 1604C: Understanding the Differences

While both the BIR 1604C and BIR 1604E serve similar purposes in terms of reporting income tax withholding, they are used for different types of payments:

  • BIR 1604C reports the withholding tax on compensation paid to employees. Employers file this form to ensure that the taxes withheld from employee salaries are accurately reported and remitted to the government.
  • BIR 1604E, on the other hand, is used for non-employee income payments such as professional fees, commissions, and other similar costs. This form is typically filed by businesses or individuals who pay non-employees and must withhold taxes on these payments.

The key difference lies in the reported income type—BIR 1604C deals with employee-related income, while BIR 1604E addresses non-employee income.

BIR Requirements for 1604C and 1604E

The BIR 1604C and BIR 1604E are essential tax forms for businesses in the Philippines. Below are the key requirements for filing each form:

For BIR 1604C (Annual Information Return of Income Taxes Withheld on Compensation):

  • Required by: Employers filing on behalf of employees.
  • Purpose: To report taxes withheld from employee compensation.
  • Supporting Documents:
    • Monthly and quarterly BIR withholding tax returns (e.g., BIR 1601C).
    • Employee salary details.
    • Tax payments are made throughout the year.
  • Deadline: On or before January 31st of the following year.

For BIR 1604E (Annual Information Return of Income Taxes Withheld on Payments to Non-Employees):

  • Required by: Businesses making payments to non-employees.
  • Purpose: To report taxes withheld on professional fees, commissions, etc.
  • Supporting Documents:
    • Monthly withholding tax reports (BIR 1601E).
    • Records of non-employee income payments.
  • Deadline: On or before January 31st of the following year.

Meeting these requirements ensures tax compliance in the Philippines.

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

Filing the BIR 1604C and 1604E forms requires careful attention to detail and adherence to the proper filing procedure. Here’s a step-by-step guide to help you through the process:

  1. Preparation of Supporting Documents: Before filing the forms, gather all relevant supporting documents, including the BIR tax filing records for the year, proof of withholding taxes, and other necessary information.
  2. Access the BIR eFiling Portal: Both forms can be filed online through the BIR’s eFiling system. You must create an account on the BIR’s website to access the system and submit your returns.
  3. Complete the Form: Once logged in, select the appropriate form (1604C for employees or 1604E for non-employees) and fill it with accurate details regarding the taxes withheld.
  4. Review and Submit: Double-check the accuracy of the information entered in the form. Make sure all tax payments are correctly reported. After reviewing, submit the form electronically.
  5. Payment of Taxes Due: If you have any outstanding taxes, you must make the payment through the BIR’s online payment facilities.
  6. Retain the acknowledgment receipt: After filing, keep the acknowledgment receipt from the BIR as proof of submission.

Suppose you’re unsure about the filing process. In that case, you can seek assistance from a professional tax consultant or accountant, such as Triple i Consulting, to ensure everything is done correctly and on time.

BIR 1604C and 1604E Filing Procedure: Key Deadlines

The filing deadlines for the BIR 1604C and 1604E forms are typically set on or before January 31st of the following year, with a possible extension in case of unforeseen circumstances. It is crucial to stay updated on any changes to the filing deadlines the Bureau of Internal Revenue sets.

Both forms should be submitted on time to avoid penalties for late filing. The BIR imposes fines and surcharges on companies that fail to comply with the deadline, which could result in additional financial strain. Late filing can damage a company’s reputation and credibility with tax authorities.

Penalties for Late Filing of BIR 1604C and 1604E

Failure to file the BIR 1604C and 1604E forms on time can lead to several penalties. The BIR imposes surcharges, interest charges, and penalties for non-compliance. Some of the penalties include:

  • Surcharge: A penalty of 25% for late filing or non-filing of the tax forms.
  • Interest: An interest of 20% per annum on the amount due continues accumulating until the taxes are paid.
  • Compromise Penalty: In some cases, the BIR may impose a compromise penalty for tax violations.

It’s important to file these forms on time to avoid these penalties and to maintain good standing with the BIR. If you’re unsure about the filing process, consulting with a tax expert is highly recommended.

Takeaways

In conclusion, the BIR 1604C and 1604E are essential forms for businesses in the Philippines to report taxes withheld on employee compensation and non-employee income. Ensuring accurate and timely filing of these forms is crucial for staying compliant with the law and avoiding penalties.

At Triple i Consulting, we specialize in assisting businesses with tax compliance in the Philippines, including filing 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 help ensure your business meets all legal requirements.

Is Assistance Available?

Yes, Triple i Consulting is here to help! We offer comprehensive tax services, including assistance with filing BIR 1604C and 1604E, so you can stay compliant and focus on your business operations. Contact us today to ensure your tax filings are accurate and timely.

Contact us today to schedule an initial consultation with one of our experts:

  • Contact Us Here
  • Fill out the form below
  • Call us at: +63 (02) 8540-9623
  • Send an email to: info@tripleiconsulting.com

 

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