Usually, there are tax treaties with other countries against double taxation, which is the tax on income that has been previously taxed. Therefore, it doesn’t matter if your work submitted is online or the method of payment—as long as you haven’t paid taxes on your income, you are still liable. Note that taxes are paid on your income, which means you are entitled to deduct legitimate expenses (subject to limits required by the law) from your earnings. With the passage of the Tax Reform for Acceleration and Inclusion (TRAIN), all taxpayers with annual income less than P250, 000 are exempt from paying taxes. For professional freelancers who earn more than the threshold, you have to pay income tax based on the graduated tax table as well as three percent percentage tax. Also, you must pay 12 percent VAT if your annual revenues are greater than P3, 000,000. If you qualify as a non-VAT taxpayer, you can opt to pay eight percent on gross receipts. However, this flat tax is not for everyone: It’s disadvantageous for taxpayers who have a lot of deductible expenses and so are better off paying income tax and percentage tax. Tax evasion and non-filing of appropriate forms come with hefty penalties imposed by the law. These range from imprisonment for two to four years and payment of fines, interest, compromise fee, and penalties which could sum up to at least five times bigger than the original tax due! In practice, the Bureau of Internal Revenue (BIR) usually goes after bigger fish for tax evasion cases such as high-profile doctors, lawyers, and entertainment personalities. Given limited resources, the BIR has no better alternative. Therefore, the reality is so as long as you’re not caught, there’s little impact on your credit standing with banks and chances for future employment.