Who can use BIR Form 1701-MS?

You can use BIR Form 1701-MS if you are a self-employed individual or sole proprietor with annual gross sales or receipts below PHP 20 million. You cannot use it if you are a mixed-income earner (employed + self-employed), a corporation, or a partnership.

How do I file BIR Form 1701-MS?

You can file BIR Form 1701-MS online using the BIR's Offline eBIRForms Package (version 7.9.6 or higher), then submit through eBIRForms or eFPS and pay via GCash, Maya, or an authorized agent bank. You can also file manually by downloading the fillable PDF from the BIR website and submitting at your Revenue District Office.

What is the deadline for filing BIR Form 1701-MS?

The annual deadline for BIR Form 1701-MS follows the standard Annual ITR deadline of April 15 each year. For the 2025 taxable year, the deadline was extended to May 15, 2026. Quarterly income tax returns (Form 1701Q) are due on May 15, August 15, and November 15.

What are the penalties for late filing of BIR Form 1701-MS?

Penalties for late BIR filing include a 25% surcharge on tax due, 12% annual interest computed from the due date, and a compromise penalty of PHP 1,000 to PHP 25,000. However, RMC 20-2026 provided penalty relief for micro and small taxpayers who filed their 2025 AITR using the correct form.

Can a freelancer use BIR Form 1701-MS?

Yes. Freelancers can use BIR Form 1701-MS as long as their annual gross receipts are below PHP 20 million and they are not mixed-income earners (i.e., not simultaneously employed and self-employed). The form supports both the 8% flat tax option and graduated tax rates.

BIR Form 1701-MS: Complete Guide for Micro & Small Taxpayers in the Philippines (2026)

Q: What is BIR Form 1701-MS?

BIR Form 1701-MS is a simplified Annual Income Tax Return introduced under RMC No. 20-2026 for individuals classified as micro or small taxpayers in the Philippines. Micro taxpayers have annual gross sales below PHP 3 million; small taxpayers have gross sales between PHP 3 million and PHP 20 million.

Q: Do I need to update my BIR registration to use Form 1701-MS?

No. Under RMC 20-2026, micro and small taxpayers do not need to update their BIR registration to switch to Form 1701-MS. You can use the new form for your next filing without any additional paperwork.

What Is BIR Form 1701-MS?

BIR Form 1701-MS (Annual Income Tax Return for Individuals Classified as Micro or Small Taxpayers) is the Bureau of Internal Revenue’s new, simplified tax return designed specifically for the smallest business owners and self-employed professionals in the Philippines.

Launched under Revenue Memorandum Circular (RMC) No. 20-2026, the 1701-MS is part of the BIR’s push to make tax compliance easier for micro and small enterprises. It provides a simpler alternative to filing the more complex BIR Form 1701 or 1701A for those who qualify.

Key takeaway: If your annual gross sales or receipts are PHP 3 million or below (micro taxpayer), or between PHP 3M and PHP 20M (small taxpayer), you can use this simplified form - even if you already missed the May 15, 2026 AITR deadline.

Who Qualifies as a Micro or Small Taxpayer?

Under RMC 20-2026, you qualify to use BIR Form 1701-MS if:

Classification	Annual Gross Sales/Receipts	Who This Covers
Micro taxpayer	Less than PHP 3,000,000	Sari-sari store owners, small online sellers, one-person freelancers
Small taxpayer	PHP 3,000,000 to less than PHP 20,000,000	Small restaurants, retail shops, service providers

You do not qualify if:

Your gross sales/receipts are PHP 20,000,000 or more annually (only micro and small taxpayers qualify)
You are a mixed-income earner (employed + self-employed)
You are a corporation or partnership (use BIR Form 1702 instead)

Do You Need to Update Your BIR Registration First?

No. One of the best features of RMC 20-2026 is that micro and small taxpayers do not need to update their BIR registration to switch to Form 1701-MS. You can simply use the new form for your next filing - no additional paperwork needed.

How to File BIR Form 1701-MS

As of May 2026, the 1701-MS is available through two channels:

Option 1: Online (eBIRForms Package v7.9.6+)

The BIR has released an updated Offline eBIRForms Package (version 7.9.6) that includes the 1701-MS form. To file online:

Download the latest eBIRForms Package from the BIR website
Install and open the package
Select BIR Form 1701-MS
Fill in the required fields:
- Personal information (TIN, civil status, etc.)
- Gross sales/receipts for the taxable year
- Allowable deductions (itemized or optional standard deduction)
- Tax due computation
Generate the form file and submit through the BIR’s eFPS or eBIRForms online channel
Pay the tax due (if any) through GCash, Maya, or any authorized agent bank (AAB)

Option 2: Manual Filing

For taxpayers who prefer or need to file physically:

Download the fillable PDF of BIR Form 1701-MS from the BIR website
Print and accomplish the form in capital letters using black ink
File at your Revenue District Office (RDO) where you are registered
Pay at the BIR cashier or any authorized agent bank

Important: According to RMC 20-2026, there are no penalties for filing at the wrong venue - so don’t worry if you end up at the wrong RDO.

Key 2026 Filing Deadlines You Need to Know

Now that the 2025 Annual ITR deadline (extended to May 15, 2026) has passed, here are the next critical deadlines every micro and small taxpayer must track:

Deadline	Form	What It’s For
April 25, 2026	2551Q (Quarterly Percentage Tax)	Q1 2026 (Jan–Mar) - For non-VAT taxpayers
July 25, 2026	2551Q (Quarterly Percentage Tax)	Q2 2026 (Apr–Jun) - For non-VAT taxpayers
July 25, 2026	2550Q (Quarterly VAT Return)	Q2 2026 (Apr–Jun) - For VAT-registered businesses
August 15, 2026	1701Q (Quarterly Income Tax Return)	Q2 2026 (Apr–Jun) - For all self-employed individuals
November 15, 2026	1701Q (Quarterly Income Tax Return)	Q3 2026 (Jul-Sep)
April 15, 2027	1701 / 1701A / 1701-MS	Annual ITR for CY 2026

Quarterly deadlines to remember:

2550Q (Quarterly VAT) - Due 25th of the month after quarter-end
2551Q (Quarterly Percentage Tax) - Due 25th of the month after quarter-end (Q1: Apr 25, Q2: Jul 25, Q3: Oct 25, Q4: Jan 25)
1701Q (Quarterly Income Tax) - Due 15th of the second month after each quarter (Q1: May 15, Q2: Aug 15, Q3: Nov 15; Q4 is the annual return)

How the 1701-MS Differs from 1701 and 1701A

Many taxpayers wonder which form to use. Here’s a quick comparison:

Feature	1701-MS (New)	1701 (Standard)	1701A (Simplified)
Best for	Micro & small taxpayers (under PHP 20M gross)	Self-employed/mixed income with detailed deductions	Self-employed electing 8% flat tax
Complexity	Low - simplified fields	High - detailed schedules	Medium
8% flat rate option	Yes	Yes	Yes
Graduated rates (optional)	Yes	Yes	No (8% only)
Itemized deductions	Yes	Yes	No (OSD only)
Filing method	eBIRForms or manual	eBIRForms / eFPS	eBIRForms
Registration update needed	❌ No	❌ No	❌ No

The bottom line: If your gross sales are PHP 3M or less, the 1701-MS is almost always the best choice - it has fewer fields and the BIR has explicitly said there are no penalties for using the wrong venue.

Penalties for Late Filing (And How RMC 20-2026 Helps)

Missing a BIR deadline can be expensive. Here’s what you’re looking at:

Penalty Type	Amount
Surcharge	25% of tax due
Interest	12% per annum (computed from due date)
Compromise penalty	PHP 1,000 to PHP 25,000 depending on violation

But here’s good news from RMC 20-2026 (for the 2025 AITR filing season):

The BIR has provided penalty relief for micro and small taxpayers who:

Filed 1701 or 1701A electronically, or
Filed and paid manually using 1701-MS

This means if you’re a micro/small taxpayer and you filed your 2025 AITR a bit late but used the correct form, you may qualify for reduced or waived penalties. Note that this relief was specific to the 2025 Annual ITR (due May 15, 2026 extended deadline) - it’s not confirmed to apply to future tax years. Always consult with your RDO for the specifics of your case.

Step-by-Step: Filing Your First 1701-MS

Step 1: Gather Your Documents

Certificate of Registration (COR) from BIR
Books of accounts (if required) or summary of sales/expenses
Receipts for deductible expenses (if itemizing)
SSS, PhilHealth, and Pag-IBIG premium payment receipts
Previous quarter’s 1701Q filing (for reference)

Step 2: Compute Your Gross Sales

Add up all your sales or receipts for the taxable year. If you’re an online seller, this includes all payments received through GCash, Maya, bank transfers, and cash on delivery.

Step 3: Choose Your Deduction Method

A. Optional Standard Deduction (OSD) - The simpler route

Deduct 40% of gross sales automatically
No need to track individual expenses
Best if you don’t have organized receipts

B. Itemized Deductions - May save you more tax

Deduct actual expenses (rent, utilities, supplies, salaries)
Requires complete receipts and records
Better if your actual expenses are higher than 40% of gross

Step 4: Compute Tax Due

Apply your chosen tax rate:

8% flat tax on gross sales minus PHP 250,000 (if you registered under this option)
Graduated rates (0% to 35% per TRAIN Law) on taxable income

Step 5: File and Pay

File your form through eBIRForms or at your RDO
Pay any tax due through GCash, Maya, AAB, or BIR cashier

Common Questions About BIR Form 1701-MS

Can I switch to 1701-MS in the middle of the year?

Yes. RMC 20-2026 explicitly states that micro and small taxpayers may use 1701-MS without prior approval from the BIR. You can switch mid-year.

What if I already filed 1701 or 1701A?

That’s fine. You can use 1701-MS for your next filing (next quarter or next annual return). There’s no penalty for switching forms.

Does the 1701-MS work with the 8% flat tax?

Yes. The form supports both the 8% flat tax option (on gross sales minus PHP 250,000) and the graduated tax rates. Just fill in the applicable section.

I’m a freelancer with PHP 500,000 annual income - can I use 1701-MS?

Yes. As long as your gross sales/receipts are within the micro or small taxpayer thresholds (under PHP 20M annually), and you’re not a mixed-income earner, you can use 1701-MS regardless of your profession.

What if I earn in foreign currency?

Foreign currency earnings must be converted to Philippine Pesos using the BIR-approved exchange rate at the time of receipt. The PHP 3M threshold applies to the peso equivalent.

Why This Matters for Your Business

The introduction of BIR Form 1701-MS is the most significant simplification of tax compliance for micro and small taxpayers since the EOPT Act. It signals that the BIR is serious about making compliance easier for the smallest businesses - the backbone of the Philippine economy.

Three things to do today:

Check if you qualify - If your gross sales are under PHP 20M, you can use 1701-MS
Mark your calendar - Next deadlines: July 25, 2026 for 2551Q (quarterly percentage tax Q2) and August 15, 2026 for 1701Q (quarterly income tax Q2)
Get organized - Even with simplified forms, accurate records make filing faster and less stressful

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Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Please consult with a qualified tax professional or your BIR Revenue District Office for guidance specific to your situation. Tax laws, including RMC issuances, may be updated or superseded.