How to Renew Your Business Permits in the Philippines
Compliance

How to Renew Your Business Permits in the Philippines

It’s almost that time of the year again, the time where business proprietors and entrepreneurs need to get ready for a new year of operations. And with the approach of January comes not only the glittering fireworks and the wishful New Year’s resolutions but also the duties of filing taxes and of course, renewing business permits. 

The deadline for all registered businesses in the Philippines on renewing their business permits which expires annually at the end of each year (December 31st) is January 20th of the upcoming year. Plan ahead of time and avoid long lines or possible penalties to your business by reading this guide on how to renew your business permit in the Philippines.

Penalties for Late Renewal of Business Permits in the Philippines

Business permit renewal begins from 01 January until 20 January of each year. Failure to secure a renewal of licenses and certificates or a late filing with the Bureau of Internal Revenue (BIR) and your designated Local Government Units (LGUs) could be detrimental to your business operations. Which in turn, will directly affect your profits and overall survival in the local industry. Make sure you renew your business permits within this period and avoid the following penalties:

BIR Penalties

According to Section 258 of the National Internal Revenue Code:

  • Fine of not less than five thousand pesos (P5,000) but not more than twenty thousand pesos (P20,000); and  
  • Imprisonment of not less than six (6) months but not more than two (2) years. 

Local Government Units (LGU) Penalties

According to the Local Government Code of the Philippines:

  • The LGU will impose a twenty-five percent (25%) surcharge on the tax assessed, plus an additional two percent (2%) penalty for every month which the business permit was not renewed; and
  • Closure and/or seizure of properties and assets (for extremely delinquent accounts).

How to Renew Your Business Permits in the Philippines

Avoid most, if not all, of the usual inconveniences of renewing your business permits by knowing what to bring, where to go, who to talk to, and how the process needs to be done. Here is a guide of simple steps you need to follow to obtain the renewal of your barangay permit, mayor’s permit, and BIR registration successfully.

Renewal of Barangay Permit/Clearance – Deadline January 20
The first step is getting your Barangay Permit or Barangay Clearance. A Barangay Clearance is essential as it verifies your business’ compliance with the requirements of the local government. Also take note that this document is necessary for obtaining your Mayor’s Permit. 

What you need to bring: 

  • Original and photocopy of previous year’s Barangay Permit
  • Original and photocopy of previous year’s Official Receipt
  • Accomplished application form (2 copies)
  • Requirements indicated on the application form

How long it will take: 

  • 1 day 

What you have to do: 

  1. Go to the local barangay hall of the district where your business is located.
  2. Obtain a renewal application form. 
  3. Fill it out and submit along with the original copy of Last Year’s Barangay Permit and Official Receipt for assessment.
  4. Once approved, pay the corresponding fees (will vary depending on the nature of your business). 
  5. Get the Official Receipt of the Barangay Permit. Take note of the date indicated on when you can claim your Barangay Permit.  
  6. Go back to the barangay hall on the said date and claim your new Barangay Permit.

Renewal of Mayor’s/Business Permit – Deadline January 20

The second step is processing your Mayor’s Permit renewal, which can only be done after obtaining a Barangay Permit/Clearance.
What you need to bring:

  • New Barangay Permit (Current Year)
  • Last Year’s Original Mayor’s Permit
  • Last Year’s Original Official Receipt
  • Last Year’s Income Statement (audited or unaudited)
  • Last Year’s Contract of Lease
  • Local Insurance (either from City Hall or Private Insurance Company)
  • Community Tax Certificate (CTC) / Cedula (acquired from City Hall)

How long it will take: 

  • 1 to 3 weeks

What you need to do:

  1. Go to the local Business Permits and Licensing Office of the City Hall or Municipal Hall where your business is located.
  2. Fill out an application form.
  3. Submit your form together with the requirements for assessment.
  4. Once your requirements are approved, pay the Mayor’s Permit fees at the City Treasurer’s Office.
  5. Obtain a receiving copy at the City Treasurer’s Office. Take note of the stamped date for when you can claim your Mayor’s Permit.
  6. Go back to the establishment on the said date, present your receiving copy, and claim your new Mayor’s Permit.

Renewal of  BIR Registration – Deadline January 31

The last step requires you to take your new Barangay Permit/Clearance and Mayor’s Permit for the renewal of your BIR Business Registration. This certificate gives your registered business the continuous right to print official receipts, register books of accounts, pay business-related taxes, and give TIN (Tax Identification Number) to employees.

What you need to bring: 

How long it will take: 

  • 1 day 

What you need to do:

  1. Go to your business’ local/designated BIR Revenue District Office (RDO). Find the details of your specific RDO here.
  2. Submit your accomplished BIR Payment Form 0605 to the officer-of-the-day for assessment. 
  3. Once your requirements are approved, pay the annual business registration fee of P500 at the bank accredited by your RDO.

Reminders from DTI and More Things to Remember

The Department of Trade and Industry (DTI) is reminding new and existing businesses to file or renew their business registrations and business names. The government agency recommends entrepreneurs to prepare ahead of time to avoid hassles and penalties. For new companies and sole proprietorships, local government offices require a business name registration from DTI before their business permits will be released. 

Remember to be as detailed as possible when submitting documentation. Indicate all your assets, liabilities, expenses, equity, and taxes. 

If you encounter any difficulties or have any further concerns in the process of renewals, you may call for the assistance of a credible counsel for tax filing and business registration in the Philippines.

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