So, you’ve decided to go into business for yourself as an online seller, or be your own boss, and work freelance. That’s great! But first, you’ll have to register with the Bureau of Internal Revenue, or BIR.
The BIR sent out a Revenue Memorandum Circular or RMC on June 10, 2020 that says any individual who’s doing business or earning income in any manner or form, has to register and comply with tax laws. You can see the original RMC, here.
That means that if you sell online or do business as a freelancer, you need to:
- Give your customers an official receipt
- Keep books of accounts like ledgers and journals
- Withhold taxes (if this applies to you)
- File and pay tax returns on time
Any individuals found doing business after July 31, 2020 without registration or having paid taxes will have to pay penalties under our country’s tax laws.
Once you’re registered as an online seller or freelancer, the BIR will give you a Certificate of Registration or COR, also known as Form 2303. The COR allows you to give your customers invoices, and tell you what kind of taxes you have to pay.
Read on to find out how to register and get your COR.
How do I register?
First, you’ll have to go to the BIR’s Revenue District Office or RDO that has jurisdiction over where your live, or where your business is located. If you’re doing business online, find out which RDO covers your home address. You’ll be going to the RDO to get a Certificate of Registration or COR.
But before you get a COR, you’re going to need a Tax Identification Number or TIN—whether you’ve been doing business online arleady without one, or you already have a TIN but haven’t registered your business, yet.
Take note: If you already have a TIN, you can only have one TIN, forever. You will not be getting a new or another TIN; you will be registering your business.
If you don’t have a TIN yet, you can find out how to get your TIN, here.
What are the requirements for getting a COR?
These are the documents that the RDO will ask you for, before they give you a COR:
- A Contract of Lease (or proof of rent, if you’re renting) or Land Title (proof of land ownership)
- 3 copies of the following forms (which you can get at the BIR or online, here):
- BIR Form 1901 – Application Form
- BIR Form 0605 – Payment Form
- BIR Form 2000 – Documentary Stamp Tax on Lease
- A government-issued ID like your birth certificate, passport or driver’s license, that can be read clearly and hasn’t been tampered with in any way
- Photocopies of other documents like a DTI Certificate (if you’re an online seller or a sole proprietor with a business name, like the name of your online shop—find out how you can get a DTI Certificate, here.)
What’s the process for getting the COR?
- Give all your required documents to the designated officer at your RDO, who will assess how much you have to pay for your registration fees.
This is how your fees will be calculated:
- Registration fee: Php 500
- Documentary Stamp Tax on Subscription: Depends on your capital
- Documentary Stamp Tax on Lease: Depends on your monthly rental
- Pay for your fees at accredited banks. You’ll find a list of accredited banks, here.
- Go back to your RDO and line up at the Registration Section, where you’ll submit the following documents:
- BIR Form 1901 – Application Form
- Photocopy of paid BIR Form 0605 – Payment Form
- Photocopy of paid BIR Form 2000 – Documentary Stamp Tax on Lease
- Contract of Lease or Land Title/Tax Declaration
- Photocopy of Mayor’s Permit
- Get your receipt and find out when you can get your COR because some RDO’s will require you to attend a tax filing seminar before they give you your COR.
- Buy your Books of Accounts at any bookstore or office supply store and have them registered at your RDO. You’re going to need your Form 1905 when you register your books. You can learn more about Books of Accounts, here.
- Apply for BIR Printed Receipts (BPR) or BIR Printed Invoices (BPI) or the Authority to Print (ATP) your own receipts—how much you pay for these depends on the RDO and the printer. If you apply for an ATP, you’re going to need your Form 0605 and Form 1906.
What else do I get when I get my COR?
Apart from getting your COR, you’ll be getting:
- A copy of your Registration Form 1901 or 1903 that has been received by the BIR
- A Notice to Issue a Receipt or Invoice (NIRI)
- Your BPR or BPI or ATP
- Proof of payment of your registration fee
Do you need help with registering your business? Ask an accountant from one of our Partner Firms, today.