The annual return
The annual return settles the year: the year's tax, less what the quarterly returns and the marketplaces' 2307s already paid. Here's Kuting Kitchen's 2026, due 15 April 2027.
← 7.4 Corporations: the 1702QOne return for the whole year
The quarterly returns are payments on account. The annual income tax return settles the whole year: it works out the year's tax, then subtracts everything already paid.
Companies taxed at the regular rate, like Kuting Kitchen, file the 1702-RT. Sole proprietors file one of the 1701 forms (step 9). Here's Kuting Kitchen's for 2026.
The year's tax
Say all four quarters of 2026 looked like Q3: taxable income of ₱648,000 for the year (4 × ₱162,000). On page 2 that's item 39.
At 20% (item 40), the income tax for 2026 is ₱129,600: items 41 and 43. That's the empty bar; now fill it with what's been paid.
Less: the three 1702Q payments
Kuting Kitchen paid ₱26,400 on each 1702Q, for the first three quarters (Lesson 7.4): ₱79,200 in all, item 46.
Less: the year's 2307s
The marketplaces withheld ₱6,000 a quarter: ₱24,000 for the year, shown on BIR Form 2307 certificates. The form splits them: item 48 for Q1 to Q3, ₱18,000; item 49 for the fourth quarter, ₱6,000.
Counted twice? No. The 1702Q payments were already net of the Q1 to Q3 2307s, so the year's tax less both adds up. Q4's ₱6,000 has no quarterly return, so this is the first place it's claimed: collect the October to December 2307s before you file.
The balance: ₱26,400
₱129,600 − ₱79,200 − ₱24,000 = ₱26,400 to pay with the return. Page 1 carries it over: item 14 tax due, item 15 credits, item 16 and item 21, the total payable.
It's the fourth quarter's share, which is why there's no fourth-quarter 1702Q. In a real year Q4 is often the biggest, with 11.11 and 12.12, so expect a bigger balance than the quarters before.
If you paid too much
Say a bad fourth quarter, a ₱36,000 loss, brought the year down to ₱450,000 of taxable income. Tax: ₱90,000. Already paid and withheld: ₱103,200. Item 21 shows an overpayment of ₱13,200, and you mark one box:
| Refund | Ask BIR to pay it back |
|---|---|
| TCC | Get a Tax Credit Certificate, used to pay future taxes |
| Carry over | Use it against next year's quarterly income tax |
The form itself warns that the choice is irrevocable once made, so decide with your accountant.
Due 15 April
The annual return is due on the 15th day of the fourth month after the year ends: 15 April for a calendar year. Kuting Kitchen's 2026 return is due 15 April 2027.
One exception you may remember: returns for 2025 were moved to 15 May 2026 by RMC 30-2026. It was a one-off; the date is back to 15 April.
The attachments
The financial statements and other attachments go up through eAFS, BIR's electronic audited financial statements system, within 15 days after the deadline (normally 30 April). With sales above ₱3 million, Kuting Kitchen's must be audited by an independent CPA.
Attach the year's 2307s and the Summary Alphalist of Withholding Taxes (SAWT). As an OPC, it also files its financial statements with the Securities and Exchange Commission (SEC), on the date the SEC sets each year.
Sole proprietors: the 1701 family
Same subtraction, different form:
| 1701A | Business income only, on 8% or on graduated rates with the optional standard deduction (OSD) |
|---|---|
| 1701 | Mixed income (a salary too), or itemized deductions |
| 1701-MS | Simplified two-page return; micro and small sole proprietors may use it |
Same 15 April deadline. If the tax due is over ₱2,000, an individual can pay in two equal halves: the first with the return, the second by 15 October. Companies can't split it.
Pop Quiz: which form, and how much?
Liza, a sole proprietor on 8%, with no other income. Which annual return?
Business income only, on 8%: the 1701A. As a micro taxpayer she may also use the simplified 1701-MS.
Ben, with an office job and an online shop. Which annual return?
Salary plus business income is mixed income: the 1701.
Elle Home OPC: tax for the year ₱96,000, paid on its 1702Qs ₱54,000, 2307s for the year ₱12,000. Balance due?
₱96,000 − ₱54,000 − ₱12,000 = ₱30,000, paid with the 1702-RT by 15 April.
BIR Form 1702-RT, January 2018 (ENCS) version, from bir.gov.ph, filled in with sample figures. General information for learning, not tax advice. Kuting Kitchen, the sellers and their numbers are fictional; the quarters are assumed equal to keep the arithmetic short. Deadlines move to the next working day when they fall on a weekend or holiday; check BIR's announcements each year.
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