REVENUE MEMORANDUM ORDER NO. 37-2024
REVENUE MEMORANDUM ORDER NO. 37-2024
This Order is being issued to prescribe the policies, guidelines and procedures in classifying business taxpayers, pursuant to Section 21(b) of the National Internal Revenue Code of 1997 (Tax Code), as amended, in relation to Section 47 of Republic act (RA) No. 11976, otherwise known as the Ease of Paying Taxes (EOPT) Act.
- Criteria For Classifying Taxpayers
RMO 37-2024 provides the following criteria for the classification of business taxpayers based on gross sales:
| Classification | Gross Sales |
| Micro Taxpayer | less than ₱3,000,000 |
| Small Taxpayer | ₱3,000,000 to less than ₱20,000,000 |
| Medium Taxpayer | ₱20,000,000 to less than ₱1,000,000,000 |
| Large Taxpayer | ₱1,000,000,000 and above |
- Initial Classification
| Taxpayers | Initial Classification |
| Taxpayers who registered in 2022 and prior years | Taxpayers registered in 2022, and prior years shall be classified on the basis of their gross sales as declared in their Income Tax Returns (ITR) filed for taxable year 2022 in accordance with the threshold values. For those taxpayers who have not filed their ITR for taxable year 2022, initially classified as Micro, except VAT-registered taxpayers, who shall be classified as Small. |
| Taxpayers registered in 2023 and 2024 but before the effectivity of RR No. 8-2024, or before April 27, 2024 | Initially be classified as Micro, except VAT-registered taxpayers, who shall be classified as Small, effective until reclassified. |
| Taxpayers who shall register after the effectivity of RR No. 8-2024, or after April 27, 2024 | Initially be classified based on their declaration in their Registration Forms (i.e., BIR Form No. 1901 and 1903) starting the year they registered and shall remain effective until reclassified. For mixed-income earners, only business income as defined under Section 2 of RR No. 8-2024 shall be considered for purposes of classifying taxpayers while taxpayers with branches, the classification shall follow the classification of the Head Office |
- Reclassification
| Reclassification | Procedure |
|---|---|
| Taxpayer Initiated | Taxpayers may request for reclassification through their Head Office: a. From lower to higher classification — Taxpayers shall submit their requests, together with supporting documents, through any of the following: i. Via BIR online facility – Online Registration and Update System (ORUS); or ii. Manually by submitting applicable registration update form to their home Revenue District Office (RDO). These requests shall automatically be processed for approval. b. From higher to lower classification, except for SMALL to MICRO – Taxpayers shall submit their requests, together with supporting documents, through any of the following: i. Via BIR online facility – ORUS; or ii. Manually by submitting applicable registration update form to their home RDO. |
| BIR Initiated | BIR may initiate taxpayer reclassification, depending on any verified information available. The new classification shall take effect upon receipt by taxpayer of the notification thereof, subject to the final outcome of any pending audit/assessment that may significantly affect the said classification. |
Taxpayers who are reclassified pursuant to BIR-initiated reclassification cannot request for reclassification during the same taxable year, unless it is founded on meritorious reasons duly verified based on the statement, declaration or any relevant information, including those obtained through audit or investigation. Request for reclassification should be filed before the Regional Director/ACIR-LTS whose decision thereon is final and unappealable.