What Is a BIR Large Taxpayer? Classification Criteria and What Changes Once You're Notified

A BIR Large Taxpayer is a business that the Bureau of Internal Revenue has formally classified and notified as meeting specific quantitative criteria — most notably gross sales of ₱1 billion and above under current BIR classification rules — which moves it from its regular Revenue District Office (RDO) into the jurisdiction of the BIR’s Large Taxpayers Service (LTS). Large Taxpayer status isn’t self-declared and doesn’t apply automatically the moment a threshold is crossed; it takes effect only once the BIR issues formal notification, and it brings real compliance changes, starting with mandatory electronic filing.

This guide covers the current classification criteria under the Ease of Paying Taxes (EOPT) Act framework, how that relates to the BIR’s longstanding Large Taxpayers Service criteria, what changes once you’re notified, and how often the BIR reviews classification. If your business is approaching VAT-registration thresholds as well as large-taxpayer territory, see VAT Registration Threshold in the Philippines; for the filing-system change that comes with Large Taxpayer status, see How to Enroll in eFPS.

How does the BIR classify business taxpayers under RMO No. 37-2024? #

Revenue Memorandum Order (RMO) No. 37-2024, issued September 4, 2024, sets the current criteria for classifying business taxpayers into four tiers based on gross sales, implementing the taxpayer-classification provisions of the Ease of Paying Taxes (EOPT) Act. The thresholds are:

For this purpose, gross sales means total sales revenue, net of VAT where applicable, for the taxable year, without further deductions, and covers business income only — it excludes compensation income, passive income, and income excluded under the Tax Code. RMO No. 37-2024 was issued in relation to Section 21(b) of the Tax Code, as amended, and Section 47 of the EOPT Act.

How does this interact with the Large Taxpayers Service (LTS) criteria under RR No. 1-98? #

Separately from the EOPT gross-sales tiers, the BIR has long used a distinct set of quantitative and qualitative tests, originally set out in Revenue Regulations (RR) No. 1-98, to identify and notify taxpayers for placement under the Large Taxpayers Service. RR No. 1-98 classifies a taxpayer as a Large Taxpayer if the Commissioner of Internal Revenue notifies them as having met any one, or a combination, of criteria that historically included:

• Value-added tax paid or payable of at least a specified amount per quarter
• Annual excise tax paid or payable above a specified amount
• Annual income tax paid or payable above a specified amount
• Annual withholding tax remittances (compensation, expanded, final, and government money payments combined) above a specified amount
• Total annual gross sales/receipts above a specified amount
• Total net worth above a specified amount as of each calendar or fiscal year-end

These RR No. 1-98 criteria and the newer RMO No. 37-2024 gross-sales tiers are related but not identical frameworks — RMO No. 37-2024 governs the taxpayer’s general Micro/Small/Medium/Large classification under the EOPT Act, while LTS jurisdiction and notification have their own regulatory basis. Because both frameworks have been amended and clarified over time, a business nearing large-taxpayer territory should confirm its current status directly with the BIR or the LTS rather than assume either framework alone determines LTS placement.

What actually changes once you’re notified as a Large Taxpayer? #

Large Taxpayer classification is not just a label — it shifts which BIR office has jurisdiction over your filings and changes how you’re required to file and pay. Verified consequences include:

• Large Taxpayers Service jurisdiction — the business’s tax matters move from its regular RDO to the BIR’s Large Taxpayers Service, which handles filing, payment, and audit matters for taxpayers under its jurisdiction.
• Mandatory eFPS enrollment — Large Taxpayers are required to enroll in and file their returns through the Electronic Filing and Payment System (eFPS) rather than filing manually or over the counter. See How to Enroll in eFPS for the enrollment process.
• Notification-based effectivity — reclassification, including a move into Large Taxpayer status, takes effect only upon the taxpayer’s receipt of the BIR’s formal notification, not automatically upon crossing a threshold during the year.

A business should keep filing and paying under its existing classification and RDO until it actually receives notice of reclassification — assuming a threshold crossing by itself triggers new obligations can create confusion about which office and which filing channel currently has jurisdiction.

How often is taxpayer classification reviewed? #

Under RMO No. 37-2024, the BIR’s national office may periodically initiate reclassification of business taxpayers on a two-year cycle, in addition to reclassification that can be recommended based on audit findings from a Revenue Region or the Large Taxpayers Service, subject to approval and formal notification. This means a business’s classification isn’t fixed forever after its first notification — a Medium taxpayer whose gross sales grow past ₱1 billion, or a Large Taxpayer whose gross sales fall back below it, can be reclassified when the BIR next reviews classifications, with the change taking effect only once the taxpayer is notified.

Worked example: a business crosses the Large Taxpayer threshold #

A domestic distribution company reports gross sales of ₱850,000,000 in one taxable year (Medium classification) and grows to ₱1,150,000,000 in gross sales the following year.

Until that formal notice arrives, the company keeps filing under its Medium-taxpayer arrangements — the ₱1.15 billion gross sales figure alone doesn’t automatically change its RDO or filing channel.

Frequently asked questions #

What is a BIR Large Taxpayer? #

A BIR Large Taxpayer is a business formally classified as such by the Bureau of Internal Revenue after meeting specific quantitative criteria and receiving official notification from the Commissioner of Internal Revenue, placing it under the jurisdiction of the BIR’s Large Taxpayers Service instead of its regular Revenue District Office.

What is the gross sales threshold for Large Taxpayer classification under RMO No. 37-2024? #

Under Revenue Memorandum Order No. 37-2024, issued to implement the taxpayer-classification provisions of the Ease of Paying Taxes (EOPT) Act, a business taxpayer with gross sales of P1 billion and above for the taxable year is classified as a Large Taxpayer.

Does Large Taxpayer classification happen automatically once I cross the threshold? #

No. Large Taxpayer status takes effect only upon the taxpayer’s receipt of formal notification from the BIR, not automatically the moment gross sales cross a threshold. A business should continue complying under its existing classification until it actually receives that notice.

What changes once a business is notified as a BIR Large Taxpayer? #

Once formally notified, a Large Taxpayer falls under the jurisdiction of the BIR’s Large Taxpayers Service (LTS) instead of its regular Revenue District Office, and is required to enroll in and file returns through the Electronic Filing and Payment System (eFPS) rather than manual or over-the-counter filing.

How often does the BIR review taxpayer classification for reclassification? #

Under Revenue Memorandum Order No. 37-2024, the BIR’s national office may periodically initiate reclassification of business taxpayers, including movement into or out of Large Taxpayer status, on a two-year cycle, in addition to reclassification recommendations that can arise from audit findings.

Summary #

Large Taxpayer status is a formal BIR classification, not a self-assessed label — under RMO No. 37-2024, a gross sales figure of ₱1 billion or above places a business in the Large Taxpayer tier, but the jurisdiction shift to the Large Taxpayers Service and the mandatory move to eFPS only take effect once the BIR formally notifies the taxpayer, with reclassification reviewed on a cycle of up to two years. The BIR’s older RR No. 1-98 criteria for LTS notification remain a related but separate framework worth confirming directly with the BIR if your business is near either threshold. See How to Enroll in eFPS for the filing-system change Large Taxpayer status requires, and VAT Registration Threshold in the Philippines for the separate VAT-registration threshold that growing businesses also need to track.