Below is a comprehensive discussion of BIR Form No. 1702 in the Philippines—its purpose, who must file it, documentary requirements, filing deadlines and methods, and the legal framework underpinning its usage. This guide is for informational purposes only and does not constitute legal or tax advice. Always consult with a certified tax professional or refer to the latest issuances and regulations of the Bureau of Internal Revenue (BIR) for the most accurate and up-to-date information.

1. Overview of BIR Form 1702

BIR Form 1702 refers to the Annual Income Tax Return for Corporations, Partnerships, and Other Non-Individual Taxpayers in the Philippines. The form is intended for all non-individual taxpayers subject to income tax, whether on the regular income tax rate or special/preferential rates. It serves as the final declaration of all taxable income earned (or losses incurred) for a given taxable year and is used to compute the corresponding income tax liabilities.

1.1 Variants of BIR Form 1702

BIR Form 1702-RT (Annual Income Tax Return for Corporations, Partnerships, and Other Non-Individual Taxpayers Subject Only to the Regular Income Tax Rate)
- Used by non-individual taxpayers earning solely from regular taxable activities (i.e., no mixed income subject to different tax regimes).
BIR Form 1702-MX (Annual Income Tax Return for Corporations, Partnerships, and Other Non-Individual Taxpayers with Mixed Income Subject to Multiple Income Tax Rates or with Income Subject to Special/Preferential Rate)
- Used by taxpayers that have both income subject to the regular corporate tax rate and income subject to preferential rates (e.g., certain government incentives or Board of Investments [BOI] incentives).
BIR Form 1702-EX (Annual Income Tax Return for Use by Corporations, Partnerships, and Other Non-Individual Taxpayers EXEMPT under the Tax Code, as amended, [Sec. 30 and those exempted in Sec. 27(C)])
- Used by non-individuals whose income is entirely exempt under the National Internal Revenue Code (NIRC), as amended.

2. Who Must File

BIR Form 1702 must generally be filed by the following non-individual taxpayers in the Philippines:

Domestic Corporations – Organized under Philippine laws and subject to income tax on all income derived within and outside the Philippines.
Resident Foreign Corporations – Foreign corporations authorized to do business in the Philippines, subject to tax on Philippine-sourced income.
Non-Resident Foreign Corporations – Required to file if they have income effectively connected with a trade or business in the Philippines.
Partnerships – General professional partnerships may have special rules, but partnerships generally file this return to report taxable income or losses.
Other Non-Individual Entities – Includes joint ventures, associations, trusts, and other entities recognized under Philippine law, if they are subject to income tax or are considered exempt under the NIRC but required to file for documentation purposes.

2.1 Exempt Entities

Certain non-individuals (e.g., cooperatives, non-stock, non-profit educational institutions, charitable institutions) may be exempt from income tax under the NIRC or other special laws. However, many exempt entities are still required to file BIR Form 1702-EX (instead of 1702-RT or 1702-MX), purely for record-keeping and compliance purposes.

3. Legal Bases and Governing Rules

National Internal Revenue Code (NIRC), as amended – The primary law governing income taxation in the Philippines.
BIR Revenue Regulations – Implementing rules and regulations that detail computation methods, record-keeping, and submission protocols.
BIR Issuances (Revenue Memorandum Circulars, Revenue Memorandum Orders, etc.) – Additional clarifications, deadlines, e-filing requirements, and updates.

Recent legislative changes, such as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, have affected corporate income tax rates and incentives, which can influence which variant of Form 1702 to use and how to compute taxes.

4. Filing Deadline

The deadline for filing BIR Form 1702 is on or before the 15th day of the fourth month following the close of the taxable year. For most taxpayers with a calendar year accounting period (January 1 to December 31), this is on or before April 15 of the following year. For fiscal-year taxpayers (with an accounting period different from the calendar year), the deadline is similarly the 15th day of the fourth month after their fiscal year ends.

5. Documentary Requirements and Attachments

When submitting BIR Form 1702, the following documents are typically required:

Audited Financial Statements (AFS) – Duly stamped “received” by the BIR or, for manual filings, with the original signed opinion of the independent Certified Public Accountant (CPA).
Statement of Management Responsibility – Signed by the president/CEO and treasurer/chief financial officer (or equivalent officers).
Certificate of Independent CPA – For those required to have their financial statements audited.
Schedules/Attachments – Depending on the taxpayer’s nature and transactions:
- Schedule of Income from Philippine sources and from foreign sources.
- Breakdown of expenses and itemized deductions (if applicable).
- Reconciliation of retained earnings, if requested.
Tax Credit Certificates, if any – To support tax credits claimed in the return.
Proof of Prior Year’s Excess Credits – If there is a prior year’s excess credit carried over.

Note: The BIR may require additional attachments based on the taxpayer’s specific circumstances (e.g., if claiming certain tax incentives).

6. Computation of Tax

6.1 Regular Corporate Income Tax Rate

Under the CREATE Law, the current general corporate income tax rate is 25%, which may be reduced to 20% for domestic corporations with taxable net income of five million pesos (PHP 5,000,000) or below and total assets not exceeding one hundred million pesos (PHP 100,000,000), excluding land.

6.2 Minimum Corporate Income Tax (MCIT)

Imposed at 1% (reduced from 2% until mid-2023 under CREATE, subject to BIR’s latest issuances) on gross income for domestic and resident foreign corporations that are in their fourth year of operations and onwards when the MCIT is greater than the normal corporate income tax.

6.3 Special/Preferential Rates

Some enterprises registered with government agencies such as the Philippine Economic Zone Authority (PEZA) or BOI may avail of preferential tax rates, depending on their registration agreements and applicable laws.

6.4 Other Taxes

Other taxes and fees (e.g., branch profit remittance tax, gross receipts tax) may be relevant, though separate from the scope of BIR Form 1702. These must be declared properly if they affect the total tax liability.

7. How to File

7.1 Manual Filing

Where to File: The BIR Revenue District Office (RDO) or Large Taxpayers Service (LTS) office having jurisdiction over the registered address of the non-individual taxpayer.
What to Bring: Duly accomplished BIR Form 1702; required attachments; payment for any tax due (cash, check, or authorized bank payment channels).

7.2 Electronic Filing

eFPS (Electronic Filing and Payment System)
- Certain taxpayers (e.g., large taxpayers, government offices, taxpayers mandated by the BIR) must file via eFPS.
- Payment can also be made electronically.
eBIRForms
- For taxpayers not mandated to use eFPS, the eBIRForms package is available for preparing and submitting the forms electronically.
- After e-filing, payment can be made at authorized agent banks or through electronic payment channels.

Important: If the taxpayer is mandated to file electronically and fails to do so, the return may be considered improperly filed, leading to penalties.

8. Penalties for Non-Compliance

Failure to file BIR Form 1702 or to pay the correct amount of tax may result in:

Surcharge – Up to 25% or 50% of the unpaid amount, depending on the nature of the violation.
Interest – 12% per annum (subject to change based on BIR regulations) on the unpaid tax from the date prescribed for payment until fully settled.
Compromise Penalty – May apply depending on the circumstances and BIR guidelines.
Criminal Penalties – Willful failure to file or deliberate filing of fraudulent returns can lead to imprisonment and/or significant fines.

9. Practical Tips

Keep Accurate Records – Proper accounting and bookkeeping throughout the year minimize errors.
Consult with a CPA or Tax Professional – Particularly if the taxpayer has multiple sources of income, incentives, or is subject to special tax regimes.
Track Changes in Tax Laws – Amendments like the CREATE Law and new BIR issuances can change deadlines, tax rates, and required forms.
File Early – Avoid last-minute filing to prevent system slowdowns, avoid penalties, and allow time for corrections if needed.
Retain Proof of Filing – Keep copies of the return and official receipts of payment for audit and compliance verification.

10. Conclusion

BIR Form 1702 is a cornerstone of tax compliance for corporations, partnerships, and other non-individual entities in the Philippines. The form’s accurate completion ensures that the government can properly assess a taxpayer’s annual income tax liability. Understanding which 1702 variant applies, organizing supporting documents (e.g., audited financial statements), and adhering to deadlines and e-filing mandates can help avoid costly penalties and ensure that an organization remains in good standing with the BIR.

Disclaimer: This article is intended for general informational purposes and does not constitute legal or tax advice. For specific concerns about your organization’s filing requirements and tax obligations, consult a certified tax professional or attorney and refer to the latest BIR issuances.