REVENUE REGULATIONS NO. 8-2024
Issued on April 11, 2024 to implement Section 21(b) of Tax Code on classification of taxpayers.
Section 2 of RR No. 8-24 classifies taxpayers as follows:
- Micro Taxpayer – shall refer to a taxpayer whose gross sales for a taxable year is less than Three Million Pesos (₱ 3,000,000.00)
- Small Taxpayer – shall refer to a taxpayer whose gross sales for a taxable year is Three Million Pesos (₱ 3,000,000.00) to less than Twenty Million Pesos (₱ 20,000,000.00)
- Medium Taxpayer – shall refer to taxpayer whose gross sales for a taxable year is Twenty Million Pesos (₱ 20,000,000.00) to less than One Billion Pesos (₱ 1,000,000,000.00)
- Large Taxpayer – shall refer to taxpayer whose gross sale for a taxable year is One Billion Pesos (₱ 1,000,000,000.00) and above.
This is simplified as per table below:
| Taxpayer | Gross Sales for a Taxable Year |
| Micro Taxpayer | Below ₱ 3,000,000.00 |
| Small Taxpayer | ₱ 3,000,000.00 – ₱ 20,000,000.00 |
| Medium Taxpayer | ₱ 20,000,000.00 – ₱ 1,000,000,000.00 |
| Large Taxpayer | Above ₱1,000,000,000.00 |
The same section also defined tax gross sales and business income below:
Gross Sales – Total sales revenue, net of VAT, if applicable, during the taxable year, without any other deductions.
This shall only cover business income, excluding compensation income earned under employer-employee relationship, passive income under Section 24, 25, 27 and 28, and income excluded under Section 32 (B), all of the Tax Code.
Business Income – Shall include income from the conduct of trade or business or the exercise of a profession.
Initial Classification of Taxpayers
Taxpayer who will register to engage in business or practice of profession upon the effectivity of these Regulations shall initially be classified based on its declaration in the Registration Forms starting from the year they registered and shall remain as such unless reclassified.
The concerned taxpayer shall be reclassified in accordance with the threshold values as stated under Section 2 of these Regulations.
Notification on the Classification and Reclassification of Taxpayer
Taxpayers shall be duly notified by the BIR of their classification or reclassification, as may be applicable, in a manner or procedure to be prescribed in a revenue issuance to be issued separately.
Transitory Provision
Taxpayer registered in 2022 and prior years shall be classified on the basis of their gross sales for taxable year 2022.
For taxpayers registered in 2022 and prior years but without any submitted information on their gross sales for taxable year 2022, and taxpayer registered in 2023 or in 2024 before the effectivity of these regulations, they shall initially be classified as MICRO, except VAT-registered taxpayers, who shall be classified as SMALL.