BIR Registration Process in the Philippines
Local and foreign investors and entrepreneurs that intend to establish companies in the Philippines are required to register their businesses with various government agencies before they are allowed to commence business operations. Registration with the Securities and Exchange Commission (SEC) is the first step in the registration process wherein a Certificate of Registration is issued and the legal existence of the corporation is approved, specified, and recognized. All other registration requirements with other government agencies will not be entertained by the respective agencies without SEC registration.
Upon registration with the SEC, corporations are required to secure a Barangay Permit, then, a Mayor’s Permit from the Local Government Unit (LGU) where the business is to be located. The next step to this is the accomplishment of a Certificate of Registration from the Bureau of Internal Revenue (BIR) so on and so forth.
The BIR is the taxing authority of the Philippine government. It collects internal revenue taxes, fees and charges, and enforces all forfeitures, penalties, and fines connected with tax matters for the Philippine government.
The Certificate of Registration issued by BIR (BIR Form 2303) contains an enumeration of the types of taxes that apply to a certain entity depending on its structure and the nature of its activities which includes the following:
- Corporate income tax
- Value-added tax
- Expanded Withholding Taxes
- Final Withholding Taxes
- Withholding taxes (on compensation, fringe benefits, etc.)
Registering your business with the BIR gives you the authority to print your official receipts and invoices, formally register the Tax Identification Number (TIN) provided for your company in the Certificate of Registration issued by SEC, and register the books of accounts you are required to annually register with BIR to serve as official record of your business transactions for the fiscal year.
Steps in Registering Your Business with the BIR
- 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 registered address of your business establishment. The supporting documents to be attached to the Form 1903 are as follows:
- SEC Certificate of Registration (Certificate of Incorporation for domestic corporations/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(PHP500.00) 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.
After receipt of the aforementioned requirements, BIR officials will get back to you to inform you when the BIR Certificate of Registration (Form 2303) is going to be available.
After securing a BIR Certificate of Registration, you will be required to do the following:
- Apply for Sales Invoices/Official Receipts through BIR Form 1906 – 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 (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 (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 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 accounts are the following:
- BIR Certificate of Registration (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
- The taxpayer may opt to register also Loose-leaf or Computerized Accounting Software as its books of accounts.
A Few Things You Need to Remember
- An “Ask for Receipt” Notice (ARN) will be issued together with the BIR Certificate of Registration and you must post both documents in your business establishment.
- Your corporation, as well as its branches, must accomplish and file the application on or before you commence business operations.
- You are required to pay the Documentary Stamp Tax (DST) on the Articles of Incorporation (AOI) on the 5th 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 five (5) days after the close of the month, BIR Registration shall be done on or before payment of DST due.
- Once your BIR Certificate of Registration is issued to you, you are given thirty (30) days to have your official receipts and sales invoices printed.