RR No. 8 – 2024

RR No. 8 – 2024 Ease of Paying Taxes on the classification of taxpayers

The Bureau of Internal Revenue issued RR No. 3-2024 to implement the amendments on Title IV – VAT and Title IV – Percentage Tax of the NIRC 1997, as amended and introduced in Republic Act No. 11976, otherwise known as the “Ease of Paying Taxes Act”  

A. Taxpayer Classification 

Micro  Less than P3,000,000.00 Pesos 
Small  Three Million Pesos (P3,000,000.00) to less than Twenty Million Pesos (P20,000,000.00) 
Medium Twenty Million Pesos (P20,000,000.00) to less than One Billion Pesos (P10,000,000,000.00) 
Large One Billion Pesos (P10,000,000,000.00) and above 

Under the new regulations, taxpayers will be classified based on their gross sales, which refer to the total sales revenue during the taxable year, excluding VAT if applicable, without any other deductions. This classification applies only to business income derived from trade, business activities, or professional practice, and does not include: 

  • Income from employment under an employee-employer relationship; 
  • Passive income as defined in Sections 23, 25, 27, and 28 of the Tax Code, as amended; 
  • Income excluded under Section 32(B) of the Tax Code, as amended 

The initial classification of taxpayers will be based on their gross sales. Specific details regarding the thresholds for different taxpayer categories will be provided in a separate issuance. 

B. Reduced Administrative Penalties for Micro and Small Taxpayers 

Taxpayers classified as micro and small will benefit from reduced civil penalties in cases of non-compliance. However, the surcharge for willful neglect to file a return, or for filing a false or fraudulent return, remains at 50%. 

The new regulations will take effect fifteen (15) days after their publication in the Official Gazette or on the BIR’s official website, whichever comes first. These regulations were published on the BIR website on April 12, 2024. 

See below:

RR No. 8 – 2024

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