The implementation of the Ease of Paying Taxes (EOPT) Law, facilitated through Revenue Regulations No. 8- 2024, brings forth a structured approach to taxpayer classification.
This aims to classify the taxpayers based on the *gross sales for the year. The classification is as follows:
MICRO- Gross sales is less than 3 million
SMALL- Gross sales is more than 3 million but less than 20 million
MEDIUM- Gross sales is less than 20 million but more than 1 billion
LARGE- Gross sales is more than 1 billion
*Gross sales: Total sales revenue (net of VAT, if applicable) before deducting any expenses. The Gross sales shall only cover business income excluding compensation income from employee-employer relationships, passive incomes, and other incomes excluded from gross sales.
The process of classification varies depending on the taxpayer's registration status:
For those registered upon the EOPT Law's effectiveness, initial classification details are provided in the Certificate of Registration.
Taxpayers registered in 2023 or 2024 are categorized as micro (Non-VAT) or small (VAT) taxpayers.
Taxpayers registered prior to 2022 have their classification based on their 2022 gross sales.
If applicable, BIR will notify the taxpayers for their classification or reclassification. Read the full Revenue Regulations No. 8-2024 here.
To update your taxpayer’s classification in Taxumo, please go to the Settings page and scroll through the Business Profile. Click the dropdown next to the Taxpayer’s Classification and choose the appropriate classification.
