Are your online earnings included in your ITR?
By ayeeesha
@ayeeesha (1127)
Philippines
April 15, 2013 8:41pm CST
Hello myLotters!
I have a question to ask. Do you include your online earnings as part of your income whenever you file your income tax return? According to Sec. 23 of the Tax Code, "a citizen of the Philippines is taxable on all income derived from sources within and without the Philippines." This means that all income earned, whether in the Philippines or abroad, is subject to tax.
As an online worker, we only receive minimum or no benefits at all. In fact, the payment made to us is not even taxable. So do you declare your online earnings in your income tax returns?
I would love to hear your thoughts! :)
2 people like this
12 responses
@Mavic123456 (21893)
• Thailand
16 Apr 13
sure why not. if you are that honest why not declare this as part of your income.
@ayeeesha (1127)
• Philippines
16 Apr 13
It depends. The Tax Code provides a table with corresponding tax rate for every amount earned. If my online earnings fall under the tax exempt, then there's no need to declare. But if my annual income is big enough to be taxable, depending on the schedule, then it must be declared.
@rsa101 (38166)
• Philippines
16 Apr 13
Well I guess if the income is significantly big I guess you should report it but if your earnings is small enough that it would not be that significant then I guess you can ignore reporting that in your ITR.
I am not primarily earning my money online that is why I think my offline earnings are reported correctly so I need not to worry about if ever I have some extra income that is not that big compared to what I am earning offline.
@ayeeesha (1127)
• Philippines
16 Apr 13
There is none actually. I don't even remember my Tax professor mention about online earnings during class. All he says is that income from whatever source is subject to tax so looking at the provision literally, then online earnings must be included.
1 person likes this
@jazel_juan (15746)
• Philippines
16 Apr 13
I don't think the amount i am earning here is significant enough plus i am already paying tax from my monthly bills - internet bills..
@jeanneyvonne (5501)
• Philippines
16 Apr 13
@jazel Don't get me started on my provider's breakdown of fees and the quality of their service.
@Angelpink (4034)
• Philippines
16 Apr 13
I agree with Jazel...too much we are [paying to the government.
@ayeeesha (1127)
• Philippines
16 Apr 13
Whether the amount is big enough - the question remains: Whether online earnings should be included in the ITR? That is what actually confuses me and I don't know whether it should be included or not.
And the tax from monthly bills is different since they are VAT and not part of your income tax return :)
@SinfulRose (3527)
• Davao, Philippines
16 Apr 13
Don't we pay enough taxes in the usage of utilities already in making money online? And besides, before we even get the money, we already pay the taxes from the payment processors and then there's the transferring of money to the local bank as well. I think that's tax enough. However, if you're talking about millions here, I don't think the government will think twice. They'll want to get the money from you and call it as legal as possible until you don't have much left.
@SinfulRose (3527)
• Davao, Philippines
16 Apr 13
Ordinary citizens are not really the least of their concerns since it is the them that they can easily get money from. The rich are too intelligent to give up without a fight.
Are you a business owner online or over online?
More than that I don't think it is really necessary to record it under your statements unless if it takes up significant percentage on your monthly income.
@ayeeesha (1127)
• Philippines
16 Apr 13
You have a point there :)
The government is actually after the "big fish" and ordinary citizens like us with little earnings are the least of their concern. However, I'm just worried because the bank might question the deposits I make even if I stated in the bank info that I'm a housewife with no income :))
@rage35 (344)
• Philippines
17 Apr 13
Ok, So how would the government know that you have an income generated from your online? You know that it will be deposited in our personal bank accounts so how would the government know that? I think it is very stupid to divulge that information to the BIR that you have earnings online. How would they regulate it? Can they control that funds? Can they track down those people who earn online? It's really a stupid thing to tell that to the BIR because BIR don't know that it exist, if they do, they don't have rulings for that because they knew from themselves that they can't regulate it.
@ARIES1973 (11426)
• Legaspi, Philippines
16 Apr 13
Actually, I am also thinking about this thing because our agency prepare all the things with regards to our taxes and I am being deducted of a withholding tax monthly. They are also the one submitting all the necessary documents at the beginning of the year to the BIR. So I don't know if I have to inform them about my online earning or leave it as it is because you know, I am already paying a very high tax from my salary.
Aside from that, I cannot see any tax law specifically made for online earnings.
Have a nice day!
@ARIES1973 (11426)
• Legaspi, Philippines
16 Apr 13
Well, you are right. I started receiving a regular earning from my online sites at the start of this year so I have to report this on the following year. We are also discussing about it at home and until now we cannot decide on how to address this matter.
Whether I have to include it in my present tax or to make a separate report on this. I will go down to the office of the BIR. I'll ask my friend there what to do with it.
Have a nice day!
@ayeeesha (1127)
• Philippines
16 Apr 13
I was able to take Taxation classes before I quit law school and I have not heard my professor nor anyone discuss about online earnings as included in the ITR. If I started working online as early as last year, maybe I could have asked this to my professor :)
@ayeeesha (1127)
• Philippines
16 Apr 13
Although there is no specific law pertaining to online earnings, the Tax Code itself is clear that all sources of income, especially for Filipino citizens, is taxable.
My husband and I were discussing about this actually. I'm just not sure in my case since I don't have any other source of income except my online earnings. But in your case, I also don't know because if you include yours, it means higher withholding tax.
Have a nice day too! :)
1 person likes this
@rtslvtwy (1088)
• Malaysia
16 Apr 13
Personally i think that the earnings at MyLot or other of my online earnings are not that great and is not significant enough to declare those online earnings of mine to the ITR. Unless you are making like $2000 to $3000 a month from online business then probably it is taxable and you will need to declare your online income.
@rage35 (344)
• Philippines
17 Apr 13
I think that our income online is not taxable. I have heard this issue before but those people told us that it is not taxable. I haven't made a research on that but I believe that it's not. Those income generated outside the Philippines are those income by the OFWs but not included in that our online income coming from abroad. The main reason why there's no tax on it since the government has no ruling about that as well as they can't control the flow of funds that is happening on our side since it will be deposited right through our personal bank accounts and we cannot divulge that information because it is highly confidential.
@ayeeesha (1127)
• Philippines
17 Apr 13
When you're a citizen of the Philippines, every source of income, whether earned here or abroad, is taxable. OFWs have a different case and the Tax Code has a different take on that.
I haven't heard any law or BIR regulations pertaining to online earnings. All I know is that when your annual income falls into the amount which the tax schedule classifies as exempt, then there's no need to pay taxes. But it's different when you have other sources of income or when your online earnings are big enough to be taxable. That's why I'm wondering whether those who have regular jobs declare their online earnings as well.
@yahnee (1243)
• Philippines
17 Apr 13
No I did not file Income tax for my online earnings. If I were to deduct my personal exemptions there won't be any taxable income left. I don't have an offline job and rely solely on my online earnings however, when I was still working in an office, my taxes were withheld even before I tax season.
@watchamacallitz (1171)
• Philippines
25 Apr 13
I am currently employed privately and the stuff that I do online is only for past time. I, for one, don't include the earnings I have accumulated online as I dont think that is still necessary. I think I only have earned around $8 or 420php in total and I only have $2 left in my paypal account!
@Angelpink (4034)
• Philippines
16 Apr 13
I find it silly to include online earnings in ITR. Oh this hard earn little income would be given to the government so they can corrupt more ? I guess this different earning sites are already paying to the government maybe we fall in the exemptions or if not i will never include. Government got many resources that other used to corrupt them already.
@inopiratum_a_medio12 (877)
•
16 Apr 13
Definitely no, our income will not sustainable to pay local taxes it will only cause you bills additional bills unless you want to declare it
@ayeeesha (1127)
• Philippines
16 Apr 13
That depends. The Tax Code provides a table where it indicates that a certain amount of income is tax exempt. But if there are other sources of income aside from the online earnings, then I think that depends on whether you like to declare it or not.
