Prepared as a practical legal guide to how the Bureau of Internal Revenue (BIR) classifies taxpayers, why those classifications matter, and what each class must ordinarily do to comply.

I. Legal Bases & Policy Frame

National Internal Revenue Code of 1997 (NIRC), as amended — e.g., on definitions (Sec. 22), registration (Sec. 236), invoicing (Secs. 113 & 237), VAT (Title IV), percentage tax (Sec. 116), income tax for individuals (Sec. 24) and aliens (Sec. 25), corporate income tax (Secs. 27–28), withholding (Title II, Chapter XI), excise (Title VI), and documentary stamp tax (Title VII).
Key amendatory laws:
- TRAIN Law (RA 10963) — raised the VAT threshold and introduced the 8% optional income tax for certain self-employed individuals.
- CREATE Law (RA 11534) — adjusted corporate income tax rates, rationalized incentives, and temporarily lowered certain percentage/MCIT rates during covered periods.
- Ease of Paying Taxes Act (RA 11976) — modernized invoicing, harmonized documentation rules, introduced MSME-based taxpayer sizing for administration, and removed the annual registration fee.
BIR issuances (Revenue Regulations, Revenue Memorandum Circulars, etc.) — implement and operationalize the above statutes (e.g., registration forms, large taxpayer criteria, top withholding agent lists, e-invoicing scope).

II. Who Is a “Taxpayer” for BIR Purposes?

A taxpayer is any person (natural or juridical) subject to any internal revenue tax, required to register, secure a Taxpayer Identification Number (TIN), and comply with BIR obligations. The BIR classifies taxpayers along multiple axes, which often stack (e.g., a VAT-registered domestic corporation that is also a large taxpayer and a withholding agent).

III. Classification by Legal Form / Personality

A. Natural Persons (Individuals)

Resident Citizens (RC) — Taxed on worldwide income.
Non-Resident Citizens (NRC) — Typically Filipino nationals residing abroad for most of the taxable year; taxed only on Philippine-sourced income.
Resident Aliens (RA) — Non-Filipinos residing in the Philippines; taxed on Philippine-sourced income.
Non-Resident Aliens Engaged in Trade or Business (NRA-ETB) — Taxed on Philippine-sourced income, generally at graduated rates unless a special rule applies.
Non-Resident Aliens Not Engaged in Trade or Business (NRA-NETB) — Typically subject to final tax on Philippine-sourced income at statutory flat rates.

Mixed-income individuals (both compensation and business/professional income) are a recognized sub-class with special computation and withholding interactions.

B. Juridical Persons and Organizations

Domestic Corporations (DC) — Incorporated in the Philippines; taxed on worldwide income at corporate rates (subject to CREATE adjustments).
Resident Foreign Corporations (RFC) — Foreign corporations doing business in the Philippines; taxed on Philippine-sourced income.
Non-Resident Foreign Corporations (NRFC) — Not doing business in the Philippines; income from Philippine sources usually subject to final tax (often via withholding).
Partnerships
- General Professional Partnerships (GPPs) — Not taxable at the entity level on partnership income; partners are taxed on their distributive shares.
- Other Partnerships (non-GPP) — Generally taxed like corporations.
Cooperatives — With CDA registration and compliance, may enjoy income tax exemption on cooperative activities and VAT/percentage tax relief on certain transactions; non-cooperative activities may still be taxable.
Non-Stock, Non-Profit (NSNP) Corporations — Income exclusively devoted to statutory purposes may be exempt; unrelated income is taxable.
Government Instrumentalities/GOCCs — Tax treatment varies; some entities are exempt or specially taxed under charter laws.
Estates and Trusts — Recognized as separate taxpayers for income earned during administration or by the trust itself.

Registered Business Enterprises (RBEs) under investment laws (e.g., BOI, PEZA, other IPAs) may access incentives under CREATE, but still register with the BIR and comply with ordinary obligations for non-incentivized activities.

IV. Classification by Residency / Source Rules (Core to Income Tax)

Individuals: Residency and citizenship determine whether worldwide or Philippine-source income is taxed.
Corporations:
- Domestic — Worldwide income taxable.
- Resident Foreign — Only Philippine-source income taxable.
- Non-Resident Foreign — Generally final tax on Philippine-source income (commonly via withholding at source), unless a tax treaty provides relief (treaty relief/availment procedures apply).

V. Classification by Tax Type Registration

When a taxpayer registers or updates details with the BIR, they are tagged for the tax types applicable to their activities.

A. Income Tax

Individuals: graduated rates; 8% option on gross sales/receipts and other non-operating income exceeding ₱250,000 in lieu of graduated rates and percentage tax, if not VAT-registered and not exceeding the VAT threshold.
Corporations/Partnerships: corporate rates per CREATE; Minimum Corporate Income Tax (MCIT) rules apply (subject to CREATE’s temporary reliefs during its covered period).

B. Withholding Taxes (Agent Classification)

Expanded/Creditable Withholding Tax (EWT/CWT) — Businesses acting as withholding agents on specified purchases/payments.
Final Withholding Tax (FWT) — Agents required to withhold final taxes (e.g., certain passive income, payments to NRFC, NRA-NETB).
Compensation Withholding (WTC) — Employers withhold on employee salaries.

The BIR also designates Top Withholding Agents (TWA) and Top Withholding on VAT (TWVAT) groups; inclusion imposes higher or broader withholding duties on specified purchases.

C. Value-Added Tax (VAT) vs. Non-VAT (Percentage Tax)

VAT-Registered — Required if gross sales/receipts exceed the VAT threshold (currently ₱3,000,000), or voluntarily registers. Must issue VAT-invoices, file VAT returns, and may claim input VAT per rules.
Non-VAT — Typically subject to percentage tax on gross sales/receipts; certain sectors face special percentage taxes (e.g., common carriers, banks/financial institutions). (Note: rates temporarily reduced under CREATE during specific periods; the general statutory rates now apply.)

D. Excise Taxpayers

Manufacturers, importers, or sellers of excise-taxable goods/services (e.g., alcohol, tobacco, petroleum, sweetened beverages, automobiles, mineral products) or excise-taxable activities (e.g., certain services).

E. Documentary Stamp Tax (DST)

Persons/parties to taxable documents/instruments (e.g., debt instruments, shares of stock, insurance policies, conveyances, leases).

F. ONETT (One-Time Transactions)

Parties to capital gains or other one-off transactions (e.g., sale of real property classified as capital asset; sale of shares not traded through an exchange; donor’s/estate tax). These are transaction-based taxpayers in addition to regular classifications.

VI. Classification by Size / Risk / Administrative Grouping

A. MSME Sizing (Administrative)

Under the Ease of Paying Taxes framework, taxpayers are binned for administration and relief measures using gross sales/receipts (not assets or employees). As a practical guide:

Micro — not exceeding the VAT threshold (₱3,000,000).
Small — > ₱3,000,000 up to ₱20,000,000.
Medium — > ₱20,000,000 up to ₱1,000,000,000.
Large — > ₱1,000,000,000.

These sizes do not change your income-tax rate by themselves but can affect compliance simplifications, invoicing/e-invoicing coverage, or reportorial expectations.

B. Large Taxpayer (LT) Classification

The BIR designates certain high-impact taxpayers as Large Taxpayers using objective criteria (e.g., tax payments/collections thresholds, industry significance). Being tagged LT means:

Supervision by the Large Taxpayers Service (LTS)/LT divisions.
Possible enhanced e-invoicing/e-reporting scope and stricter deadlines or formats per issuance.
Transfer rules: Once classified, movement in/out typically requires BIR approval or annual review; obligations continue until officially delisted.

C. Head Office / Branch (HO/Branch) Coding

Businesses may register multiple branches; each branch obtains a branch code linked to the head office TIN and files/withholds/remits as required for its location and tax types.

VII. Registration, Updates & IDs

A. Registration & Forms

TIN is mandatory.
Forms (illustrative, may be retitled/updated by BIR):
- 1901 — Individuals (self-employed/mixed income/estates & trusts).
- 1902 — Purely compensation earners.
- 1903 — Corporations/partnerships (including NGOs/co-ops) and other juridical persons.
- 1904 — One-time taxpayers (ONETT), non-resident persons not engaged in business but liable to internal taxes.
- 1905 — Updates (RDO transfer, additional tax types, closure, reactivation).
Annual Registration Fee (ARF) — Abolished by the Ease of Paying Taxes Act; no ARF due for business taxpayers from its effectivity.

B. Books of Accounts & Invoicing

Books may be manual, loose-leaf, or Computerized Accounting System (CAS)/componentized subject to BIR application/acknowledgment rules.
Invoicing: Sales invoices are now the primary document for both goods and services under the EOPT framework; supporting receipts and supplementary information (e.g., buyer TIN, address) follow current BIR formatting rules.
E-Invoicing/EIS: Mandated for certain sectors (e.g., selected large taxpayers, exporters, e-commerce); coverage expands by issuance.

C. RDO Jurisdiction

Taxpayers are assigned to a Revenue District Office (RDO) based on registered address (or special LTS offices for LT). Transactions (e.g., Authority to Print/e-receipt enrollment, books stamping/acknowledgment, TIN updates) are routed to the registered RDO.

VIII. Income-Tax Sub-Classifications That Matter in Computation

Individuals

Pure compensation vs. self-employed/professional vs. mixed.
8% option eligibility (non-VAT, not exceeding VAT threshold, no other disqualifications).
Tax-exempt/subject to final tax income streams (e.g., certain passive income) vs. regular taxable income.
Estate (during settlement) and trust income returns filed separately from individual returns.

Corporations

Proprietary educational institutions and hospitals — preferential rates subject to conditions.
Non-profit entities — test of devotion of assets/activities to exempt purposes; unrelated trade/business income taxable.
MCIT vs. normal income tax comparison (post-CREATE, MCIT generally 2% of gross income outside temporary relief windows).
Special/registered activities under CREATE with SCIT or GIE incentives (administered via IPAs; ordinary income outside the registered activity remains under the regular tax regime).

IX. VAT-Related Classifications

Mandatory VAT registration — upon breaching ₱3,000,000 cumulative gross sales/receipts in any 12-month period (or reasonable grounds to believe the threshold will be breached).
Voluntary VAT registration — allowed even if below threshold (usually locked-in for a minimum period).
VAT-Exempt Persons/Transactions — either by person (e.g., certain co-ops on qualified transactions) or by activity/transaction listed in VAT exemptions (education, healthcare, financial services, residential leases under thresholds, etc.).
Mixed VAT/Non-VAT activities — allocation of input VAT is required; careful segregation in books and invoicing is key.
Zero-Rated VAT — export sales and qualified sales to RBEs/enterprises under specific conditions and documentary requirements.

X. Withholding-Based Classifications (Roles You May Play)

As Employer — Withhold compensation tax; file returns and annual alphalists; issue BIR Form 2316 to employees.
As Payor of Income — Withhold EWT/CWT on specified payments (e.g., professional fees, rentals, certain purchases).
As Payor of Passive Income/Payments to Non-Residents — Withhold final taxes at statutory/treaty rates; secure tax treaty relief (e.g., Treaty Relief Form/TRS and tax residency certificates) where applicable.
As TWA/TWVAT — Apply mandated higher-scope withholding rules on purchases from suppliers.

XI. Excise & DST Classifications

Excise taxpayers — classified by product/activity (e.g., petroleum, tobacco, alcohol, automobiles, sweetened beverages, mineral products, invasive cosmetic procedures). Requires separate registration, bonding, warehouse permits, and strict movement controls (e.g., inviolability of stamps/markings, removals).
DST taxpayers — parties to taxable documents (issuance, acceptance, or transfer often triggers the tax). Financial institutions carry heavy DST compliance burdens.

XII. ONETT Classifications (Capital Gains, Estate, Donor’s)

Capital Gains on Real Property (capital asset) — Seller is the taxpayer (final tax on gross selling price or fair market value, whichever is higher).
Capital Gains on Shares (not traded) — Seller taxed on net gain at capital gains rates.
Estate Tax — The estate is the taxpayer from decedent’s death until distribution; normal estate tax return and inventory rules apply.
Donor’s Tax — Donor is the taxpayer; exemptions/thresholds apply; related DST may be triggered on certain instruments.

XIII. Compliance By Class (At a Glance)

Registration (TIN, RDO, tax types), books (manual/loose-leaf/CAS), invoicing/e-invoicing enrollment where covered.
Periodic returns:
- Income tax (quarterly/annual for individuals; quarterly/annual for corporations).
- VAT (monthly/quarterly per latest issuances) or percentage tax.
- Withholding (monthly/quarterly remittances; annual information returns/alphalists).
- Excise/DST (transaction-based or periodic, per tax).
Inventory and cost accounting for VAT/excise taxpayers; input VAT substantiation and apportionment for mixed transactions.
Year-end information reporting (alphalists, mapping lists, reconciliation schedules) per BIR forms.

XIV. Practical Edge Cases & Clarifications

Optional 8% Income Tax: Available only to non-VAT individuals whose gross sales/receipts do not exceed ₱3,000,000 and who are eligible per BIR rules. Not available to VAT-registered or to those who must register as VAT due to threshold breach.
Voluntary VAT Registration: Once opted in, generally locked-in for a defined period; weigh input VAT credits versus compliance costs.
GPP vs. Non-GPP: Only GPPs pass income through to partners; other partnerships are corporation-taxed.
Cooperative Privileges: Depend on CDA registration and substantive compliance; non-cooperative activities lose the shield.
Treaty Relief: Not automatic; documentation and timely filings with the BIR are critical to enjoy treaty rates.
Large Taxpayer Tag: You remain LT until formally delisted, even if current metrics dip.
EOPT Changes: No annual registration fee, unified sales invoice regime, and MSME sizing now frame many admin requirements.

XV. How to Determine Your Own Classifications (Checklist)

Who are you? (Individual, GPP partner, corporation, co-op, NSNP, RBE, estate/trust)
Where are you resident? (Individuals: RC/NRC/RA/NRA; Corporations: DC/RFC/NRFC)
What taxes apply? (Income, VAT or percentage, withholding roles, excise, DST, ONETT)
What is your scale? (Micro/Small/Medium/Large for administration; LT if designated)
Any special regimes? (CREATE incentives, co-op/NSNP privileges, treaty relief)
What filings follow? (Returns/schedules by tax type; invoices/e-invoicing; books method; RDO; branch setup)

XVI. Short Reference Table

Axis	Classes (Illustrative)	Key Consequence
Person	Individual; Corporation; Partnership; GPP; Co-op; NSNP; Estate/Trust; GOCC	Determines rate structure and who files
Residency	RC/NRC/RA/NRA-ETB/NRA-NETB; DC/RFC/NRFC	Worldwide vs. Philippine-source taxation
Tax Type	Income; VAT/Percentage; Withholding; Excise; DST; ONETT	Dictates returns, rates, invoices, records
Size/Admin	Micro; Small; Medium; Large; LT	Affects monitoring, systems, possible simplifications
Special Regimes	CREATE RBEs; Co-op/NSNP exemptions; Treaty Relief	Preferential rates/exemptions with strict conditions

XVII. Closing Notes

Classifications layer: the same taxpayer can be, for example, a domestic corporation, VAT-registered, TWA, excise taxpayer, and LT—each label carries distinct duties.
Laws are stable, but operational rules (forms, deadlines, e-invoicing coverage, lists of top/large taxpayers) are periodically updated through BIR issuances. Always align your internal controls and calendars to the latest BIR forms and circulars that correspond to your tags.

This article synthesizes the governing framework to help you determine and manage your BIR classifications. For edge cases (e.g., cross-border payments, mixed activities, incentive reconciling, or reorganizations), treat the classification step as your first diagnostic before computing tax and preparing returns.