What You Need to Know About BIR Registration for Online Sellers
This crisis has sparked a surge of entrepreneurship in Filipinos trying to cope with the limitations of the new normal. But with this surge comes the urging of the Bureau of Internal Revenue (BIR) for online sellers to register their new businesses. If you’re a new online business owner trying to figure out the BIR side of things, here is a quick guide to BIR registration for online sellers.
I’m a micro-entrepreneur/reseller, do I still need to register?
Yes. All businesses must be registered with the BIR, no matter how big or small. Remember that under our current Tax Code, businesses that fail to register with the BIR can be closed for not less than five (5) days. This closure will only be lifted upon compliance of requirements prescribed by the BIR commissioner in the closure order.
If you started your business during ECQ/GCQ and register on or before July 31, 2020, any unpaid tax obligations prior to this year would “certainly can be covered by a general tax amnesty” as per Finance Secretary Carlos Dominguez III.
Related: What Should I Do After The ECQ?
How do I register my online selling business with BIR?
Step 1: Go to the BIR Revenue District Office (RDO) which has jurisdiction over your place of business.
Step 2: Prepare BIR Form 1901 or the Application for Registration for Self-Employed (Single Proprietor/Professional), Mixed-Income Individuals, Non-Resident Alien Engaged in Trade/Business, Estate and Trust; and BIR Form 1906, or the Application for Authority to Print Receipts (ATP) and Invoices.
Step 3: Submit the following documents to the Client Support Officer (CSO) in the RDO.
- Government-issued primary ID with your name, address, and birthdate (Read: 4 Government IDs That Are Easy to Apply For)
- Photocopy of Mayor’s Business Permit or duly received Application for Mayor’s Business Permit if the permit is still under process with your LGU; and/or Professional Tax Receipt/Occupational Tax Receipt issued by the LGU or DTI Certificate
- New sets of permanently bound books of accounts
- Proof of Payment of Annual Registration Fee (ARF) (for clients with existing TIN or applicable after TIN issuance) **see Step 6 and 7
- Final and clear sample of Principal Receipts/Invoice
Additional documents, if applicable
- Franchise Documents (if any)
- Certificate of Authority (for Barangay Micro Business Enterprises)
Step 3: Wait for your turn to be interviewed by the CSO to determine the applicable tax type, and for the officer to encode and generate TIN.
Step 4: Receive TIN and copy of BIR form 1901
Step 5: Pay for your ARF (₱500.00) and Documentary Stamp Tax (₱15.00) and receive proofs of payment.
Step 6: Present your proofs of payment to the Registration Head so they can generate the Certificate of Registration (COR) and Authority to Print (ATP) and forward it for review.
Step 7: Receive COR, Ask for Receipt Notice (ARN), ATP, and Books of Accounts
How much are the tax charges?
The first thing you need to know is that businesses earning less than ₱250,000 will have zero (0) tax. But they still need to register and declare income with the BIR.
Take note that your online business will still pay similar standard taxes to physical businesses. This includes:
- Monthly and Quarterly Value Added Tax (required for all businesses earning more than P3 Million in a taxable year)
- Quarterly Percentage Tax (businesses earning ₱3 million or less annually not subject to VAT)
- Withholding Tax on Compensation
- Expanded Withholding Tax/Creditable Withholding Tax
- Quarterly and Annual Income Tax Returns
How do I pay taxes?
For eFPS filing and/or payment:
Step 1: Fill up BIR Form 2551Q in the eFPS system which contains all the alphanumeric tax codes (ATCs).
Step 2: Prepare your sales/receipts for the quarter and upload them to the system for your quarterly percentage tax amount.
Step 3: If you’ve your taxes for the first, second and/or the third month of the quarter are paid for, payment/s made will be reflected in BIR Form 2551Q in Item No. 20A-Creditable Percentage Tax Withheld per BIR Form 2307.
Step 4: After e-filing, proceed to online payment by clicking the proceed to payment button and pay the quarterly percentage tax due.
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