Steps to Register Your Business with BIR

How to register your business with the Bureau of Internal Revenue (BIR) in the Philippines? After securing a certificate of registration from the Department of Trade Industry (DTI) for single proprietorship, Securities and Exchange Commission (SEC) for partnership and corporation, and after obtaining a Mayor’s Business permit with the Local Government Unit (LGU), your next step to operate as a duly registered business is to secure a certificate of registration from the BIR.

Registering your business with the BIR will give you the authority to print your official receipts and other invoices, provide you or your corporation a Tax Identification Number (TIN) and register the books you will use to record your business transactions. Furthermore, your BIR certificate of registration will state the types of taxes you will pay, such as business taxes, withholding taxes and income tax. The following are the requirements and steps to register your business or company with the BIR.

For single proprietorship

1. Accomplish BIR Form 1901 and submit the same, together with the required attachments, to the Revenue District Office having jurisdiction over the registered address of the business establishment. The following are the forms and requirements to be attached with your application:

a. BIR Form 1901 – Application for Registration
b. Birth certificate or any valid identification showing name, address and birth date
c. Mayor’s permit or application for Mayor’s Permit
d. Department of Trade and Industry (DTI) Certificate of Registration of Business Name (to be submitted prior to the issuance of the BIR Certificate of Registration (COR)

2. Pay the Annual Registration Fee (P 500.00) at the Authorized Agent Banks of the RDO.

3. Pay P 15.00 for the Certification Fee and P15.00 for the Documentary Stamp Tax (in loose form to be attached to Form 2303).

4. The RDO shall issue the Certificate of Registration (Form 2303).

For partnerships and corporations

1. Accomplish BIR Form 1903 and submit the same together with the required attachments to the Revenue District Office having jurisdiction over the registered address of the business establishment. The following are the forms and documentary requirements to be attached with your application:

a. BIR Form 1903 – Application for Registration for Corporations/Partnerships (Taxable/Non Taxable)
b. SEC “Certificate of Registration (Certificate of Incorporation/Certificate of Co-Partnership) or     “License To Do Business in the Philippines” in case of resident foreign corporation
c. Mayor’s Permit or application for Mayor’s Permit – to be submitted prior to the issuance of the BIR   Certificate of Registration

2. Pay the Annual Registration Fee (P 500.00) at the Authorized Agent Banks of the RDO.

3. Pay P 15.00 for the Certification Fee and P 15.00 for the Documentary Stamp Tax (in loose form to be attached to Form 2303).

4. The RDO shall issue the Certificate of Registration (Form 2303).

5. Taxpayer must pay the Documentary Stamp Tax on the Articles of Incorporation as prescribed under Section 175 of the NIRC, on the 5th of the month following the date of issuance of said article (per RR 4-2000).

Further steps following the registration

1.  Apply for Invoices/Receipts using BIR Form No. 1906 – Authority to Print. The BIR will give you an “Ask for a Receipt” Notice (ARN) together with the COR BIR form 2303, and it must be posted conspicuously in your business establishment.

2. Register books of accounts (Journal / Ledger / Subsidiary Income Book and Subsidiary Purchases/Expenses Book) and have them stamped by the RDO where the business is registered. The BIR examiner will usually advise you the types of books and taxes applicable to your business upon briefing.

3. Update registration information, if needed, using BIR Form No. 1905 (change of registered address, personal exemptions, additional tax types, etc.) Submit this at the RDO having jurisdiction over the place of business

Notes: Thank you Mam Rinna, Mam Soc and Mam Chi for assisting me all throughout my application process. (RDO 25B located in Sta. Maria Bulacan)

Credit: businesstips.ph

V.A.T. Vs. Non-V.A.T.

Value Added Tax (VAT) and Percentage Tax are both business taxes collected from the sale of goods and services. The similarity ends there because these taxes are different in nature. Business owners, especially the new ones, need to know which one applies to their business to avoid future disputes with the Bureau of Internal Revenue (BIR).

Value Added Tax (VAT)

Value Added Tax (VAT) is a form of sales tax. As such, it is based on gross receipts from sale, barter, exchange, or lease of goods or properties and services within the Philippines. It is also imposed on goods imported into the country. VAT is an indirect tax which means the end consumer is being charged for the tax. In the Philippines, the rate of VAT is at 12% except for export sales and other zero-rated sales which is at 0%.

Who needs to register as a VAT taxpayer?

1. Any person or entity engaged in the business of selling goods or services that are subject to VAT and whose annual gross sales or receipts exceed or are expected to exceed One Million Nine Hundred Nineteen Thousand Five Hundred Pesos (Php1,919,500.00).
2. Any person or entity that is not VAT exempt but failed to register.
3. Any person or entity engaged in importation of goods.

How to register as a VAT taxpayer?

1. Use BIR Form 0605 and pay the registration fee of Php500.00.
2. Register books of accounts like ledgers and columnar books.
3. Secure Authority to Print then register invoice and official receipt booklets.

What are your responsibilities as a VAT taxpayer?

1. Display Certificate of Registration at the place of business.
2. Issue invoices and/or official receipts. A sales invoice is issued for every sale, barter, or exchange of goods or property. An official receipt is issued for lease of property and sale, barter or exchange of services.
3. Keep your books. Make sure that your books are updated and always ready in case an audit is made.
4. File monthly. Use BIR Form 2550M. If there is payment, go to an Authorized Agent Bank (AAB) in the Revenue District Office where registered. If there is no payment, submit to the RDO where registered, with required attachments. Deadline is not later than the 20th day of the next month.
5. File quarterly. Use BIR Form 2550Q. If there is payment, go to an AAB in the RDO where registered. If there is no payment, submit to the RDO where registered, with required attachments. Deadline is every 25th day of the following month from the last day of covered quarter.
6. Pay annual registration fee equivalent to Php500.00 not later than January 31.

Percentage Tax (Non-VAT)

For small businesses with gross annual sales and receipts that do not exceed Php750,000.00, and are not VAT-registered, percentage tax is imposed for sold or leased goods, properties or services. The tax rate varies depending on the nature of business. The usual rate is 3% but it could go as high as 30%, for gross receipts of Jai-Alai and racetrack operators for instance.

Who are required to file percentage tax?

1. Any person exempted from VAT under Sec. 109z of the Tax Code.
2. Domestic carriers and keepers of garages.
3. International air and shipping carriers based in the country.
4. Franchise grantees of utilities.
5. Franchise grantees in broadcasting business the annual gross receipts of which do not exceed Php10M and opted not to register as VAT taxpayers.
6. Operators of communications equipment sending dispatch, messages, or conversations overseas.
7. Life insurance premiums and agents of foreign insurance companies.
8. Proprietor, lessee, or operator of betting businesses such as cockpits, race tracks, cabarets, etc.
9. Stock brokers trading through Local Stock Exchange other than sake of dealer in securities, as well as corporate issuers or stock brokers of domestic or foreign markets.

When to file percentage tax returns?

1. Monthly. Use BIR Form 2551M. If there is payment, go to an Authorized Agent Bank (AAB) in the Revenue District Office where registered. If there is no payment, submit to the RDO where registered, with required attachments. Deadline is not later than the 20th day of the next month.
2. Quarterly. Use BIR Form 2551Q. If there is payment, go to an AAB in the RDO where you are registered. If there is no payment, submit to the RDO where registered, with required attachments. Deadline is every 20th day of the following month from the last day of covered quarter.

Note that for both tax types, even if there are no payments to be made, it is important that you file your returns to the RDO that covers your business location. Failure to do so may mean penalties and you must pay even if there are no tax dues.

Credit: full-suite.com

How to Transfer RDO Address of BIR

I just want to share my knowledge when you need to change your RDO address.

Let’s go to the basics. RDO means Revenue District Office. Every TIN (Tax Identification Number) is registered to one RDO. For the list of Philippine RDO, click here. An employee’s RDO should be the same to that of his employer’s RDO for tax payment and reporting purposes.

So, if you are moving from one company to another, your new employer would ask you to change your TIN’s RDO from your previous employer’s RDO to the new employer’s RDO. To do this, you would need to fill-in BIR form 1905 and submit to your RDO. It’s good to note that  this form has many purposes other than change in RDO address.

Reminder: If not sure where your TIN is registered to, then verify (at any BIR office). This is important because this determines which RDO you need to submit the BIR 1905 for transfer. You cannot submit this form to just any RDO/BIR branch because they would not accommodate you. It has to be your TIN’s RDO.

Here’s an example. My TIN is registered to RDO 43A (East Pasig) because that is where my previous employer was filing my taxes. Then, if I just got hired to a company whose TIN is registered to RDO 040 (Cubao). Then this means that I need to request for a transfer of record.

I would then visit the RDO 43A branch which is located in 2nd and 3rd Floor Rudgen Building, Shaw Blvd. Brgy. San Antonio, Pasig City beside the office of SSS and infront of Pag-Ibig Fund. Then, I would fill-in two copies of BIR form 1905 and submit to the BIR personnel. Both stamped and signed will be returned to me which 1 form would have to be submitted to the new employer. The transfer of my record to RDO 040 would take effect within five days.

Here’s what needs to be filled-in on the form:

Front page, Top:

Front page, Bottom:

Then do not forget to sign at the back page, at item number 5.

For inquiries, you may contact the details below:

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Higher Cap on Tax Exemption on Bonuses signed by PNoy

Such a relief when the bill to higher the cap of tax exemption on bonuses or 13th month pay was finally signed as a law by His Excellency Benigno “Noy Noy” Aquino. The Filipinos can now benefit fully on their hard-earned money; from sweat and blood. It was February 13 and is considered an early Valentines Day gift to the working class from government and private sectors. Teachers, factory workers, government workers, rank and file employees will be highly impacted on this great news. As stated on Inquirer.net, ” With the signing of the law, the 13th month pay and other benefits, including productivity incentives and Christmas bonuses, not exceeding P82,000 given to both government and private sector employees will be exempted from tax. This sought to amend Republic Act 7833 which set the tax exemption ceiling at P30,000 way back in 1994.

Press release below courtesy of Inquirer.net

MANILA, Philippines – President Benigno Aquino III has signed into law the measure raising the ceiling for tax exemption on bonuses and other benefits of workers in the public and private sectors, an administration lawmaker said Thursday.

In a statement, Ways and Means committee chair Marikina Rep. Miro Quimbo lauded the President’s passage of the bill, saying the measure would benefit the middle class salary earners.

“The President saw the significance of the measure as it is projected to benefit taxpayers from low to middle incomes who have not had any reprieve from the burdensome taxes imposed on their earnings,” Quimbo said.

“These are the salary and wage earners who long deserve a break from the inequitable tax system that we currently have,” he added.

Communications Secretary Herminio Coloma Jr. confirmed the news.

“According to the Office of the Executive Secretary, the President has signed into law the bill raising the ceiling on tax exemptions on bonuses to P82,000. The signed law will be transmitted to Congress shortly,” he told Palace reporters on Thursday.

The law  increases the tax exemption cap  from P30,000 to P82,000, amending for this purpose Section 32(B)(7)(E) of the National Internal Revenue Code of 1997.

The tax exemption covers all bonuses, including 13th month pay and Christmas bonus.

Aquino received his copy of the bill on January 14 after both Houses of Congress ratified the bill December last year. It would have become a law on February 14 if it does not get the President’s signature, when the 30 calendar day-period lapses.

Quimbo said salary earners would feel the impact of the bill as early as June this year, when some workers will receive the first half of their 13th month bonuses.

Finance and tax officials have called for the President’s veto of the bill, warning of revenue loss reaching up to P30 billion. But Quimbo has said losses would only amount to P3.8 billion. With a report from Kristine Angeli Sabillo

Read more: http://newsinfo.inquirer.net/672533/higher-tax-exemption-cap-on-bonuses-now-a-law#ixzz3WlnEuKdB