Your tax status (VAT or Non-VAT) determines which forms you file and how much you pay. In the Philippines, this is primarily decided by your annual gross sales or receipts. Understanding your status ensures you stay compliant with the BIR and use the correct tax profile within Taxumo.
Vat vs. Non-VAT
| Non-VAT Taxpayer | VAT Taxpayer |
Threshold | Income falls below ₱3,000,000 | Income is ₱3,000,000 or above |
Form | Percentage Tax (2551Q) | VAT Form (2550Q) |
Filing Frequency | Quarterly | Quarterly |
Switching Your Profile Mid-Year
Sometimes, a Non-VAT taxpayer may reach the threshold in the middle of the year—or a VAT taxpayer may fall below it. When this happens, the BIR requires you to switch tax types.
Here is how to update your profile in Taxumo:
Go to your Tax Settings>Tax Profile tab.
Scroll down to the Forms you are filing section.
Click the tax card you need to activate.
Example: If you are switching from VAT to Non-VAT, click the Percentage Tax card.
Note that you can only select either VAT or Percentage Tax, never both.
⚠️ Important Note on your Cashflow: To ensure your calculations and reports remain accurate for the BIR after a switch, please keep in mind that your Cashflow view will reset to match your new tax profile. While your previous entries are not deleted and remain in the system for a consistent Annual ITR calculation, you will need to re-enter or re-save your income and expenses for the affected periods to ensure they are processed correctly under your new tax status. This process allows the system to separate your VAT and Non-VAT entries properly for your records. Before proceeding, please double-check that your Income/Expense categories are mapped to the proper industries or tax codes to maintain the integrity of your filings.
Need a hand?
If you have any other questions, feel free to reach out to our Customer Support through cs@taxumo.com or through the Intercom chat bubble.