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BIR Registration Process in the Philippines
Local and foreign investors seeking to set up a company in the Philippines must register with various government agencies before they are allowed to commence business operations. The first step is registering with the Securities and Exchange Commission (SEC) to obtain an SEC Certificate of Registration.
The next step is to secure a Mayor’s Permit from the local government unit (LGU) where the business will be located. Thereafter, corporations must register with the Bureau of Internal Revenue (BIR) and obtain a BIR Certificate of Registration.
Why Am I Required To Register With BIR?
As the taxing authority in the Philippines, the BIR regulates finance, taxation, and monetary policy in the country and collects internal revenue taxes, fees, and charges. It also enforces all forfeitures, penalties, and fines to individuals/organizations that fail to file their taxes.
Corporations that seek to do business in the Philippines are required to register with BIR for tax collection purposes and issuance of the BIR Certificate of Registration.
Registering your business with BIR enables you to do the following:
- Authority to print your official receipts and invoices
- Formally register the Tax Identification Number (TIN) provided for your company in the SEC Certificate of Registration
- Register the books of accounts you are required to annually register with BIR (to serve as an official record of your business transactions for the fiscal year)
The Certificate of Registration issued by BIR (BIR Form 2303) contains an enumeration of the types of taxes that are required to be paid to the government, which includes the following:
- Corporate income tax
- Value-added tax
- Withholding taxes (on compensation, fringe benefits, etc.)
A Step-By-Step Process When Registering Your Business with the BIR
Depending on the business entity your company is registered under, you will have to undergo the following steps and secure the necessary documents to be legally allowed to operate in the Philippines.
Here is a step-by-step process on how to register with the BIR:
For Corporations and Partnerships:
- Accomplish BIR Form 1903 (Application for Registration for Corporations/Partnerships [Taxable/Non-Taxable]) and submit the same together with the required supporting documents to the Revenue District Office (RDO) that has jurisdiction over the location of your business. The supporting documents to be attached to Form 1903 are as follows:
- SEC Certificate of Registration (or License to Do Business in the Philippines for resident foreign corporations)
- Mayor’s Permit or application for Mayor’s Permit (must be submitted prior to the issuance of the BIR Certificate of Registration)
- Contract of Lease
- Other documents to be submitted if applicable:
- Certificate of Authority (if Barangay Micro Business Enterprises (BMBE) registered entity)
- Franchise Agreement
- Proof of Registration/Permit to Operate with BOI, PEZA, SBMA, or BCDA
- Pay the Annual Registration Fee (₱500.00) at the Authorized Agent Banks (AABs) of the concerned RDO.
- Pay the Documentary Stamp Tax (DST) on Subscription and Lease (BIR Form 2000). The DST on Subscription depends on the amount of your capital, while the DST on Lease depends on your monthly rental.
For Sole Proprietorships:
- Accomplish BIR Form 1901 and submit the same together with the required supporting documents to the RDO of your business location:
- DTI Certificate of Registration
- Barangay Business Clearance
- Mayor’s Permit
- Certificate of Lease (if the place is rented) or Certificate of Land Title (if owned)
- Government-issued identification (Passport, Driver’s License, Birth Certificate, etc.)
- Pay the registration fee of ₱500 and ₱30 for the loose DST or Proof of Payment for Annual Registration Fee (ARF). You may also pay the fees to the corresponding AABs of the RDO.
- Submit a photocopy of your BIR form payments and other documentary requirements to your RDO.
NOTE: After receipt of these requirements, BIR officials will notify you when your BIR Certificate of Registration (BIR Form 2303) is available for claiming.
Next Steps After Securing A BIR Certificate Of Registration
- Apply for Sales Invoices/Official Receipts through BIR Form 1906 (Application for Authority to Print Receipts and Invoices). The documentary requirements for obtaining such are as follows:
- BIR Form 1906 (Authority to Print)
- BIR Certificate of Registration (BIR Form 2303)
- Final and clear sample of Principal and Supplementary Commercial Receipts and Invoices
- BIR Certificate of Registration of Accredited Printer
- BIR Annual Registration Fee (BIR Form 0605) of Accredited Printer
- Job order
- Quarterly Report of Accredited Printer
- Register books of accounts and have them stamped by the RDO where your business is registered. Note that the BIR examiner will usually advise you of the types of books and taxes applicable to your business upon the initial taxpayer’s briefing. The documentary requirements you have to submit upon registering your books of account are the following:
- BIR Certificate of Registration (BIR Form 2303)
- New sets of books of accounts, such as but not limited to:
- General Journal
- General Ledger
- Cash Receipt
- Cash Disbursement
- Subsidiary Sales Journal
- Subsidiary Purchase Journal
- Attend the taxpayer’s initial briefing to be conducted by the RDO for new registrants to inform them of their rights and duties/responsibilities.
- An “Ask for Receipt” Notice (ARN) will be issued together with the BIR Certificate of Registration. Both documents must be posted in your business establishment.
- Your corporation and its branches must accomplish and file the application on or before you commence operations. Doing otherwise is prohibited by Philippine laws.
- You are required to pay the Documentary Stamp Tax (DST) on the Articles of Incorporation (AOI) on the 5th day of the month following the date of issuance of the AOI (as prescribed under Section 175 of the National Internal Revenue Code of 1997).
- If the DST is required to be paid within 5 days after the close of the month, BIR Registration shall be conducted on or before payment of DST is due.
- Once your BIR Certificate of Registration has been issued, you are given 30 days to have your official receipts and sales invoices printed.
Register Your Business With BIR Today
Ensuring that your company is fully compliant with corporate laws and regulations is essential to avoid unwanted issues in the near future. Registering with the appropriate government agencies will allow you to operate legally in the Philippines.