Micro taxpayer ba ako? BIR classification under EOPT
This page is for a small business owner, a sari-sari store, an online seller, a freelancer, who heard the BIR now sorts taxpayers into "micro, small, medium and large." At the end you will know which group you are in, how the BIR decides it, and what being micro changes.
PhilForms explains the rules and fills the forms. Your classification is the BIR's decision, and for a judgement call ask your Revenue District Office (RDO) or a CPA.
The four groups
The Ease of Paying Taxes (EOPT) Act wrote the groups into the Tax Code (RA 11976, section 3). The BIR's rule gives the amounts (RR 8-2024):
Group · Gross sales for the taxable year; Micro · Less than ₱3,000,000; Small · ₱3,000,000 to less than ₱20,000,000; Medium · ₱20,000,000 to less than ₱1,000,000,000; Large · ₱1,000,000,000 and above
Gross sales means total sales revenue, net of VAT if any, with no other deductions. It counts only business income: not your salary from an employer, not passive income such as bank interest (RR 8-2024).
A store selling ₱40,000 a month sells ₱480,000 a year, well below ₱3,000,000: micro.
How the BIR decides your group
From RR 8-2024:
- Registered after RR 8-2024 took effect (2024): your group starts from what you declared on your registration form (for most sole proprietors, BIR Form 1901), and stays until the BIR reclassifies you. - Registered in 2022 or earlier: your group is based on your gross sales for taxable year 2022. - Registered in 2023, or in 2024 before RR 8-2024 took effect, or no 2022 sales on record: classified as micro at first, unless VAT-registered, in which case small. - The BIR notifies you when it classifies or reclassifies you.
What changes for micro (and small) taxpayers
The EOPT Act gives micro and small taxpayers five concessions (RA 11976, section 45); the BIR's rule sets them out (RR 6-2024):
What · For micro and small · Source; Annual income tax return · At most two pages, paper or electronic · RA 11976, section 45(a); Civil penalty for a late return or late payment · 10% of the amount due · RR 6-2024, section 3; Interest on unpaid tax · Half the Tax Code rate: 6% a year · RR 6-2024, section 4; Failure to file an information return or keep a record · ₱500 each, at most ₱12,500 a year · RR 6-2024, section 5; Compromise penalty for some violations (sections 113, 237 and 238, not involving fraud) · 50% of the usual schedule · RR 6-2024, section 6
The lower rates apply prospectively (RR 6-2024, section 7). They do not apply to willful neglect or a fraudulent return: those carry 50% (RR 6-2024, section 3).
Two more things for micro only:
- No withholding duty as a buyer. "Micro taxpayers shall not be required to withhold taxes" under the creditable withholding rules (RA 11976, section 8, amending Tax Code section 57). - One-time abatement of old cases for micro taxpayers, applied for on its own form and paid with Form 0605 (0605 guide, application form).
What does not change: being micro is not a tax rate. You still choose 8% or graduated rates (8% vs graduated), and a non-VAT business on graduated rates still files the quarterly percentage tax return (2551Q guide) and issues invoices (invoices guide).
The two-page annual return
The BIR's annual return for individuals in these groups is BIR Form 1701-MS, "Annual Income Tax Return For Individuals Classified as MICRO or SMALL Taxpayers" (BIR Form 1701-MS, August 2024). Ask your RDO whether to use it or another annual return for your situation.
Mistakes that cause trouble
- Counting a salary from a job in gross sales. Only business income counts. - Assuming micro means no penalty. The penalty is lower (10%), not zero. - Thinking micro means you pay no percentage tax. The classification changes procedures and penalties, not the taxes you owe.
Questions
Micro taxpayer ba ako kung ₱40,000 lang ang benta ko kada buwan?
That is ₱480,000 a year. Micro is gross sales of less than ₱3,000,000 for the taxable year (RR 8-2024). The BIR confirms your group.
Kailangan ko bang mag-apply para maging micro?
No application is described: the BIR classifies you from your registration form or your sales, and notifies you (RR 8-2024).
Magkano ang multa kung late ako mag-file?
For micro and small taxpayers, the civil penalty is 10% of the amount due and interest is 6% a year (RR 6-2024). A compromise penalty may also apply.
Libre pa ba ang ₱500 na bayad sa rehistro?
Yes, there is no yearly ₱500 registration fee any more: the BIR stopped collecting it on January 22, 2024 (RMC 91-2024). The BIR Form 1901 guide lists what registration still costs.
Last checked 2026-10-23. Not affiliated with BIR, SSS, PhilHealth, Pag-IBIG or any government agency.