I. Overview: What These Forms Are—and Why the Distinction Matters

BIR Form 1700 and BIR Form 1701 are both annual income tax return (ITR) forms for individuals, but they apply to different kinds of taxpayers and income sources:

Form 1700 is generally for individuals earning purely compensation income (i.e., employees), who are not qualified for substituted filing.
Form 1701 is generally for individuals earning business income, professional income, mixed income (compensation + business/profession), and certain other taxable incomes that require self-reporting.

Choosing the wrong form can lead to rejected filings, mismatch issues in withholding credits, payment errors, and penalties—especially when tax credits (2316/2307) and quarterly filings are involved.

II. The Core Legal Concepts You Need Before Picking 1700 vs 1701

A. Compensation Income vs. Business/Professional Income

Compensation income Income received as an employee-employer relationship exists (salary, wages, benefits not subject to final tax, etc.). Usually supported by BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld).
Business income / Professional income Income from:
- Trade/business (selling goods/services)
- Practice of profession (licensed or not, as long as you render services for a fee) Usually supported by official receipts/invoices, books of accounts, and withholding tax certificates like BIR Form 2307 (Creditable Withholding Tax).
Mixed income You earn both:
- Compensation income as an employee, and
- Business/professional income as self-employed (e.g., you have a day job and you freelance/operate a small business).

B. Income Subject to Final Tax vs. Income Subject to Regular Graduated Tax

Some income is taxed via final withholding tax (e.g., certain passive income). If your income is purely passive income subject to final tax and/or exempt income, you may not need to file an annual ITR—depending on your exact situation. But once you have income that must be reported under the regular income tax system, annual filing is usually required.

C. Substituted Filing (Very Important for 1700)

For many employees, filing an annual ITR is “substituted” by the employer through proper withholding and issuance of BIR Form 2316. If you are qualified for substituted filing, you generally do not file Form 1700.

III. What Is BIR Form 1700?

A. Who Typically Uses Form 1700

Form 1700 (Annual Income Tax Return for Individuals Earning Purely Compensation Income) is generally used by an individual who:

Earned purely compensation income during the taxable year, and
Is NOT qualified for substituted filing, and
Must personally file an annual ITR.

B. Common Reasons You Become “Not Qualified” for Substituted Filing

You typically must file 1700 if, during the year, you had any of the following:

Two or more employers (simultaneous or successive) during the taxable year, and your year-end tax was not properly “equalized” by a single employer.
Your employer did not withhold correctly or did not issue a proper 2316.
You had other income that is not purely compensation, unless that other income is purely passive income subject to final tax and does not trigger filing requirements in your case.
You are otherwise required by the BIR to file an ITR despite employment withholding circumstances (edge cases exist in practice).

C. What Form 1700 Reports

Gross compensation income
Non-taxable/exempt compensation (where applicable)
Tax due based on the applicable tax table
Tax credits via withholding shown in 2316
Any resulting tax payable or refund/overpayment (refunds are procedurally difficult; most overpayments are carried over only in limited contexts)

D. Typical Attachments

BIR Form 2316 (from employer/s)
Other supporting documents as applicable (e.g., proof of remittances, reconciliation schedules if multiple employers)

IV. What Is BIR Form 1701?

A. Who Typically Uses Form 1701

Form 1701 (Annual Income Tax Return for Individuals Earning Income from Business/Profession and Mixed Income Earners, Estates and Trusts) is generally for:

Self-employed individuals (sole proprietors)
Professionals (e.g., consultants, freelancers, practitioners)
Mixed income earners (employee + self-employed/professional)
Certain estates and trusts (special cases; the form itself covers these categories)

B. What Form 1701 Reports

Depending on the taxpayer’s profile, Form 1701 may include:

Business/professional gross sales/receipts
Cost of sales and allowable deductions (itemized) or OSD (optional standard deduction), where applicable
Other taxable income (including compensation, if mixed income)
Tax credits (e.g., 2307 creditable withholding taxes, and sometimes foreign tax credits if applicable)
Tax due less quarterly payments and withheld credits

C. Relationship to Quarterly Filing

Most self-employed/professionals who file 1701 also deal with:

1701Q (Quarterly Income Tax Return) during the year, and then
1701 as the annual consolidation and final computation.

So, Form 1701 often “ties out” to quarterly payments and credits.

D. Variants You Will Encounter (Common in Practice)

While the topic is 1700 vs 1701, many taxpayers get confused because the BIR has commonly used variants:

1701A (annual return for certain self-employed individuals/professionals, often used by those who opt for simplified taxation in specific cases)
1701Q (quarterly)

In plain terms:

1701 is the broader annual return (including mixed income).
Some self-employed/professionals may be eligible/required to use 1701A instead of 1701 depending on their tax regime and BIR rules applicable to them.
Employees who are purely compensation generally do not use any 1701 variant unless they also have business/professional income (mixed).

Because rules can vary depending on elections made (e.g., tax rate option, registration type, threshold triggers), the safest principle is: if you have business/professional income or mixed income, you’re in the 1701 ecosystem—not 1700.

E. Typical Attachments

Depending on your situation:

2307 (Creditable Withholding Tax certificates) from clients/customers
Financial statements (especially if required based on thresholds and audit rules)
Schedules of income, expenses, and taxes withheld
Proof of quarterly payments (where applicable)
For mixed income earners: 2316 from employer, plus business/professional schedules

V. Side-by-Side Comparison: 1700 vs 1701

Category	BIR Form 1700	BIR Form 1701
Primary users	Employees with purely compensation income who must file personally	Self-employed, professionals, mixed income earners, and certain estates/trusts
Trigger to file	Not qualified for substituted filing (commonly due to multiple employers)	Presence of business/professional income (with or without compensation income)
Main tax documents	2316	2307, receipts/invoices, books; also 2316 if mixed
Quarterly returns	Not part of the usual employee process	Often tied to 1701Q quarterly filings
Complexity	Usually simpler	Usually more complex (income/expense schedules, credits, quarterly reconciliation)
Common mistake	Filing 1700 despite being qualified for substituted filing or having mixed income	Filing 1701 without reconciling quarterly payments/withholding credits properly

VI. When to Use Each: Practical Scenarios

Scenario 1: You had only one employer for the whole year

Usually: No need to file 1700 if qualified for substituted filing and your employer issued a proper 2316 and withheld correctly.
Exception: If you are not qualified for substituted filing for a specific reason, then file 1700.

Scenario 2: You changed jobs during the year (two employers)

Often: You must file 1700, especially if there wasn’t a proper year-end tax equalization by a single employer and you have multiple 2316s or incomplete withholding reconciliation.

Scenario 3: You are an employee and you also freelance on the side

You are a mixed income earner.
File 1701 (not 1700), and attach 2316 (employment) + business/professional income schedules + 2307 (if any).

Scenario 4: You are a freelancer/consultant with no employer

File 1701 (or the applicable annual form under your regime), and typically you also have quarterly 1701Q obligations.

Scenario 5: You have only passive income (e.g., bank interest) that is subject to final tax

Often, the bank withholds final tax; depending on your full facts, you may not need to file an ITR.
But if you have other income requiring reporting under regular rates, filing obligations can arise.

Scenario 6: You are a professional with clients who withheld taxes (you received 2307s)

File 1701 and claim the 2307 as tax credits. Ensure names/TINs/amounts match withholding declarations.

VII. Deadlines and Filing Channels (General Rules)

A. Annual ITR deadline

For individuals, the annual ITR is commonly due on or before April 15 following the close of the taxable year (calendar year taxpayers).

B. Where/how filed

Common filing methods include:

eBIRForms (offline package then submit online)
eFPS (for those required/registered)
Authorized agent banks or payment channels where applicable
Revenue District Office (for specific cases)

C. Payment timing

Tax due is generally payable upon filing. Late filing and late payment can trigger:

Surcharges
Interest
Compromise penalties The amounts depend on the nature and duration of the delinquency.

VIII. Common Pitfalls (And How to Avoid Them)

1. Filing 1700 when you actually have mixed income

If you had freelancing or a registered business even for a short period, you may need 1701, not 1700.

Avoidance: Inventory all income sources for the year—not just what appears on 2316.

2. Assuming “two employers” automatically means 1700 (without checking substituted filing rules)

Two employers is a common trigger, but you still need to verify whether the withholding/tax equalization and documentation resulted in substituted filing eligibility.

Avoidance: Check whether a single employer performed proper year-end annualization and whether your 2316 reflects correct annual tax.

3. Claiming 2307 credits incorrectly (1701)

Tax credits are frequently denied or mismatched due to:

wrong TIN
wrong withholding period
client didn’t remit/declare correctly
arithmetic or schedule errors

Avoidance: Reconcile every 2307 against your own summary and the payer’s filings; keep clean records.

4. Not reconciling quarterly payments (1701 / 1701Q) into the annual return

Annual tax computation should reflect:

quarterly payments made, and
total credits claimed, net of correct limitations.

Avoidance: Maintain a running tax ledger per quarter.

IX. Quick Decision Guide (Rule-of-Thumb)

Use 1700 if ALL are true:

You earned purely compensation income, and
You are not qualified for substituted filing, and
You have no business/professional income to report under regular rates.

Use 1701 if ANY is true:

You earned business income (sole prop), or
You earned professional income (freelancing/consulting), or
You are a mixed income earner, or
You must report self-employment/professional schedules and claim 2307 credits, or
You fall under the form’s scope as an estate/trust taxpayer.

X. FAQ-Style Clarifications

“I’m employed but I have a small sideline; it’s not registered. Do I still need 1701?”

Legally, income is taxable regardless of registration status. In practice, having business/professional income generally pushes you into the 1701 category (and may also imply registration and invoicing obligations). The filing form follows the nature of the income, not just your registration convenience.

“If my employer withheld correctly, can I still file 1700 voluntarily?”

Employees who are qualified for substituted filing generally do not need to file, but voluntary filing can create administrative issues unless done correctly. If you are truly purely compensation and your tax is fully withheld and documented, substituted filing is typically the intended compliance mechanism.

“I have two employers. Is filing 1700 always required?”

Often yes, but not always. The decisive factors are whether you are qualified for substituted filing and whether withholding was properly annualized and documented. In many ordinary job-change scenarios, 1700 is still required.

“Which form lets me claim 2307?”

1701 (and related business/professional annual return forms). 1700 is anchored on compensation withholding (2316).

XI. Practical Checklist Before You File

List all income sources for the year:
- employer(s) → 2316
- clients/customers → receipts/invoices, 2307
- other taxable sources → determine if final tax or regular tax
Determine your taxpayer type:
- purely employee → potential 1700 or no filing (substituted)
- self-employed/professional → 1701 ecosystem
- mixed income → 1701
Reconcile tax credits:
- 2316 withholding totals
- 2307 totals
- quarterly payments (if any)
Check deadline and payment method and keep proof of filing/payment.

XII. Closing Note (Legal Style)

Form 1700 and Form 1701 serve distinct taxpayer populations: the former is anchored on pure compensation income reporting, while the latter is built for self-employment/professional and mixed-income computation, including quarterly reconciliation and creditable withholding tax credits. The correct choice depends less on job title and more on the legal character of the income and whether annual filing is required despite withholding mechanisms. For complex situations—particularly mixed income, multiple employers, substantial tax credits, or inconsistent withholding documentation—professional review can prevent costly errors and penalty exposure.

If you want, share your income situation in one sentence (e.g., “2 employers + freelance with 2307”) and I’ll map it to the exact form and the usual attachments you’ll need.