Introduction

In the Philippine tax system, the Income Tax Return (ITR) serves as a fundamental document for individuals and entities to report their annual income and comply with tax obligations under the National Internal Revenue Code (NIRC) of 1997, as amended. However, not all individuals are required to file an ITR. For those who fall below the taxable income threshold, are exempt from income tax, or have no taxable income for a specific period, an Affidavit of No ITR becomes a crucial alternative document. This affidavit is a sworn statement affirming that the affiant did not file an ITR for a given year or period due to valid reasons recognized by the Bureau of Internal Revenue (BIR).

The affidavit acts as a substitute proof of tax compliance in various administrative and legal processes where an ITR is typically demanded. It ensures transparency and prevents evasion while accommodating those genuinely not liable for filing. Understanding its purpose, requirements, and preparation is essential for Filipinos navigating government transactions, financial dealings, or legal matters.

Legal Basis

The requirement for an Affidavit of No ITR stems from the provisions of the NIRC, particularly Sections 51 and 74, which outline the obligations for filing ITRs. Revenue Regulations (RR) issued by the BIR, such as RR No. 2-98 and subsequent amendments, specify who must file ITRs. Individuals exempt from filing include those whose gross income does not exceed the basic personal exemption (currently P250,000 for individuals under the TRAIN Law, Republic Act No. 10963), minimum wage earners, and certain non-resident aliens.

The affidavit itself is governed by general civil law principles under the Civil Code of the Philippines (Republic Act No. 386), particularly Articles 1830-1838 on affidavits and oaths, and the Rules of Court on notarization. It must be executed before a notary public to have probative value, as per the 2004 Rules on Notarial Practice (A.M. No. 02-8-13-SC). Falsely executing such an affidavit can lead to perjury charges under Article 183 of the Revised Penal Code (RPC).

Additionally, various government agencies, through their implementing rules, mandate this affidavit as a supporting document. For instance, the Department of Foreign Affairs (DFA) and the Land Transportation Office (LTO) often require it for passport or license applications when an ITR is unavailable.

When an Affidavit of No ITR Is Needed

The affidavit is not a routine document but is invoked in specific scenarios where proof of income or tax status is necessary, yet no ITR was filed. Common situations include:

Government Transactions and Permits

Passport Application or Renewal: The DFA requires an ITR or proof of tax compliance for passport processing. If no ITR was filed (e.g., due to low income), the affidavit serves as an alternative to demonstrate non-liability.
Driver's License Renewal: The LTO may request an ITR for professional licenses or renewals. Non-filers use the affidavit to comply.
Business Permit Applications: Local government units (LGUs) under the Local Government Code (Republic Act No. 7160) often require tax clearance. For new or small-scale entrepreneurs with no taxable income, the affidavit suffices.
Barangay Clearance: In some cases, for residency certifications or clearances needed for employment or loans, the affidavit is used if income is below thresholds.

Financial and Banking Matters

Loan Applications: Banks and financial institutions, regulated by the Bangko Sentral ng Pilipinas (BSP), may demand ITRs for credit assessments. The affidavit explains the absence of an ITR for applicants like students, retirees, or housewives with no personal income.
Opening Bank Accounts or Investments: Under Anti-Money Laundering Act (Republic Act No. 9160, as amended), institutions verify income sources. The affidavit helps in cases of zero or exempt income.

Employment and Professional Requirements

Job Applications: Some employers, especially in government or regulated sectors, require ITRs for tax withholding verification. The affidavit is useful for fresh graduates or those unemployed in the prior year.
Professional Licensing: Boards under the Professional Regulation Commission (PRC), such as for accountants or engineers, may need tax compliance proof during renewal. Non-filers submit the affidavit.

Legal and Judicial Proceedings

Court Cases: In civil suits involving financial capacity (e.g., support cases under the Family Code), the affidavit can evidence lack of income.
Immigration or Visa Applications: For overseas Filipino workers (OFWs) or migrants, embassies may require tax documents; the affidavit covers periods of non-residency or low income.

Other Scenarios

Real Estate Transactions: When buying or selling property, the Bureau of Internal Revenue requires Capital Gains Tax documentation, which may reference ITRs. The affidavit is used if no income was declared.
Scholarship or Government Aid: Programs under the Commission on Higher Education (CHED) or Department of Social Welfare and Development (DSWD) may need income proof; the affidavit affirms eligibility based on low income.

It is important to note that the affidavit is only appropriate when the non-filing is legitimate. If an individual was required to file but failed to do so, they must rectify this by filing a late ITR and paying penalties under Section 248 of the NIRC, rather than using the affidavit.

Who Can Use the Affidavit

Eligibility for executing an Affidavit of No ITR aligns with BIR exemptions:

Individuals with gross income below P250,000 (adjusted for inflation or amendments).
Minimum wage earners (exempt under Republic Act No. 9504).
Senior citizens or persons with disabilities whose income is from pensions or exempt sources.
Non-resident citizens or aliens with no Philippine-sourced income.
Dependents, housewives, or students with no independent income.

Corporations or partnerships may also use a similar affidavit if they had no operations or taxable income, but this is less common and often requires BIR certification.

How to Prepare an Affidavit of No ITR

Preparing the affidavit is straightforward but must adhere to legal formalities to ensure validity. Here is a step-by-step guide:

Step 1: Gather Required Information

Personal details: Full name, address, age, civil status, TIN (if any), and contact information.
Period covered: Specify the tax year(s) for which no ITR was filed (e.g., Calendar Year 2025).
Reason for non-filing: Clearly state the basis, such as "gross income did not exceed the basic personal exemption" or "exempt as a minimum wage earner."
Supporting evidence: While not always attached, references to documents like payslips or certificates can strengthen the affidavit.

Step 2: Draft the Document

Use a standard format on legal-sized paper. The content should include:

Title: "Affidavit of No Income Tax Return"
Jurat: "Republic of the Philippines ) City/Municipality of ______ ) S.S."
Body: A narrative statement under oath.
Subscription: Signature and date.

Step 3: Notarization

Visit a notary public (lawyer or authorized officer).
Present valid ID (e.g., passport, driver's license).
Pay the notarial fee (typically P100-P500).
The notary will administer the oath and affix their seal.

Step 4: Submission and Copies

Make multiple copies; one for the requiring agency, one for personal records.
If needed, secure a BIR certification of non-filing for added credibility, though not mandatory.

Sample Format

Below is a basic template. Customize as needed, but consult a lawyer for complex cases.

AFFIDAVIT OF NO INCOME TAX RETURN

REPUBLIC OF THE PHILIPPINES )
CITY/MUNICIPALITY OF [City] ) S.S.

I, [Full Name], of legal age, [civil status], Filipino, and a resident of [Address], after having been duly sworn in accordance with law, do hereby depose and state that:

I am not required to file an Income Tax Return for the [specify year/period, e.g., Calendar Year 2025] with the Bureau of Internal Revenue;
My gross income for the said period did not exceed the basic personal exemption amount of Two Hundred Fifty Thousand Pesos (P250,000.00), or I am exempt as a [specify reason, e.g., minimum wage earner];
I have no other taxable income from any source during the said period;
This affidavit is executed to attest to the truth of the foregoing and for the purpose of [specify purpose, e.g., passport renewal];
I am executing this affidavit freely and voluntarily.

IN WITNESS WHEREOF, I have hereunto set my hand this [date] day of [month], [year] at [city].

[Signature]
[Full Name]
Affiant

SUBSCRIBED AND SWORN to before me this [date] day of [month], [year] at [city], affiant exhibiting to me his/her [ID type and number], issued on [date] at [place].

[Notary Public's Name]
Notary Public
Doc. No. ___;
Page No. ___;
Book No. ___;
Series of [year].

Potential Risks and Consequences

Executing a false Affidavit of No ITR constitutes perjury, punishable by imprisonment of up to six years and fines under the RPC. The BIR may also impose civil penalties for tax evasion if discrepancies are found during audits. Agencies can reject the affidavit if it appears fraudulent, leading to delays or denials.

To mitigate risks, ensure all statements are accurate and supported. If in doubt about filing obligations, consult a BIR office or a certified public accountant (CPA).

Alternatives and Related Documents

Certificate of Tax Exemption: Issued by BIR for officially exempt individuals.
BIR Form 2316: For employees, this certificate from employers can substitute if no ITR is needed.
Late Filing: If non-filing was erroneous, file the ITR belatedly with surcharges (25% plus interest under Section 248, NIRC).
Waiver or Exemption Applications: For specific cases, like OFWs, apply directly to BIR.

In summary, the Affidavit of No ITR is a vital tool in the Philippine legal and administrative landscape, bridging the gap for non-taxable individuals while upholding compliance standards. Proper preparation ensures smooth transactions and avoids legal pitfalls.