Learn all the Certificate of Registration BIR requirements and processes for different types of businesses operating in the Philippines.
The Certificate of Registration (COR) is a document issued by the Bureau of Internal Revenue (BIR) in the Philippines. This BIR certificate serves as proof that a business or individual has been registered with the agency. In other words, this certificate authorizes an individual or business to engage in trade or business activities.
The COR contains important information such as the taxpayer’s name, tax identification number (TIN), address, line of business, and date of registration. It is mandatory for businesses and individuals to obtain a COR before they can start operating in the Philippines. In some cases, this certificate is also a requirement for legal transactions, such as opening a bank account or obtaining a business permit.
Furthermore, the COR should be displayed in a conspicuous place at the registered address of the taxpayer. Additionally, the certificate should be available for presentation upon request by any BIR officer or employee.
Why is BIR registration important?
BIR business registration in the Philippines is important for several reasons:
Compliance with the law
Under Philippine law, businesses and individuals who earn income are required to register with the BIR and pay taxes. Failure to register and pay taxes can result in penalties, fines, and legal sanctions.
Legal recognition
Registering with the BIR gives legal recognition to your business or individual income-generating activities. It establishes your legitimacy as a taxpayer and allows you to transact with government agencies and financial institutions.
Access to government benefits
Registered businesses and individuals are entitled to certain benefits, such as tax incentives, exemptions, and deductions. This can help reduce the tax burden on your business or individual income.
Credibility
Registering with the BIR can enhance your credibility with customers, suppliers, and other stakeholders. It shows that you are operating legally and transparently, which can build trust and confidence in your business or individual income activities.
Ease of doing business
Once you are registered with the BIR, you can easily transact with other businesses, suppliers, and government agencies. This can help streamline your business operations and improve efficiency.
What is the BIR registration process for companies?
For companies (corporations or partnerships) that are just starting operations in the Philippines, the first step is to register with the necessary government agencies. Depending on its legal structure and the nature of its business, the company should either register with the Department of Trade and Industry (DTI) or the Securities and Exchange Commission (SEC). BIR registration is a requirement for corporations and partnerships, whether taxable or non-taxable.
DTI Registration
Sole proprietorships or partnerships with a capitalization of less than Php 3,000,000 should register with the DTI. This type of registration is also called a “Business Name Registration” or “BNR.” It is a requirement for businesses to obtain necessary permits and licenses from local government units (LGUs) to operate.
SEC Registration
Corporations or partnerships with a capitalization of Php 3,000,000 or more should register with the SEC. This type of registration is also called a “Certificate of Incorporation.” It is a requirement for businesses to legally operate as a corporation or partnership and issue stocks to shareholders.
Mayor’s Permit Application
After the SEC business registration, the next step is to get a Mayor’s Permit from the LGU. The issuing LGU should be from the same address as the business location. Only after these initial registrations are complete can the company proceed to the BIR registration.
BIR Certificate of Registration Application
The company registration process with the Bureau of Internal Revenue (BIR) in the Philippines involves several steps, which include:
1) Determine the type of registration.
The BIR has different registration types depending on the nature of your company, such as a sole proprietorship, partnership, corporation, or non-profit organization.
2) Fill out the BIR Form 1903.
This form serves as the formal application for registration for corporations and partnerships. You can find the list of BIR Forms here.
3) Attach all necessary documents and submit them to the corresponding RDO.
Submit the Form 1903, together with the supporting documents. Usually, these include the following:
- SEC or DTI Certificate of Registration (For resident foreign corporations: License to Do Business in the Philippines)
- Articles of Incorporation or Partnership
- Mayor’s Permit or Business Permit, which the applicant must submit before the BIR certificate application.
- Barangay Micro Business Enterprises (MBME): Certificate of Authority
- Lease contract or proof of ownership of business premises
- Valid government-issued IDs of company officers or authorized signatories
Once you have all the documents, proceed to the BIR Revenue District Office (RDO), which has jurisdiction over your company. You may need to schedule an appointment before visiting the BIR office.
4) Verification of documents.
The BIR officer will verify the completeness of your documents and may ask for additional information.
5) Pay the fees.
At the office, you will need to pay the annual registration fee of Php 500.00. Aside from this, you also need to settle applicable taxes, such as documentary stamp tax and value-added tax (VAT). The BIR officer will compute the fees and taxes based on your registration type and other factors. For succeeding payments, you may also submit proof of payment for the annual registration fee and present it on the RDO.
6) Wait for the issuance.
The BIR will issue your COR within a few days or weeks after your application has been processed. You can follow up on the status of your application by calling the BIR hotline or visiting the BIR office where you filed your application.
7) Display your certificate.
Display your COR in a conspicuous place in your place of business. Once you receive your COR, it should be displayed in a prominent location on your business premises, as required by law.
What is the BIR registration process for sole proprietors?
The application process for sole proprietorships is as follows:
1) Fill out the BIR Form 1901.
Complete Form 1901, which is available on the BIR website, and submit it to your respective RDO with all other required supporting documents. Form 1901 is the application form for the registration of self-employed and mixed-income individuals, estates, or trusts.
2) Attach the required documents and submit them to the RDO.
For sole proprietorships, the following is the list of requirements:
- Photocopy of any government-issued ID with your photo and signature
- Mayor’s permit or business permit issued by your city or municipality
- Proof of business address, such as a lease contract or proof of ownership of the property
- DTI Certificate of Business Name Registration
3) Verification of documents.
The BIR officer will verify the completeness of your documents and may ask for additional information.
4) Pay the fees.
After submitting the requirements, you will need to settle the registration fee, which is Php 500. You can pay this at an authorized bank. Once you have paid the registration fee, you will be given a Certificate of Registration (COR) and a Taxpayer Identification Number (TIN) card.
5) Wait for the issuance.
The BIR will issue your COR within a few days or weeks after your application has been processed. Once you receive the certificate, you are officially operating as a sole proprietorship. As such, you can start issuing official receipts and paying your taxes.
Note that the process may vary depending on the specific requirements of your business and the BIR RDO where you will register. It’s best to inquire with the BIR or consult a tax professional for more detailed information.
What happens if I fail to register my business with BIR?
If you fail to register your business with the BIR in the Philippines, you may be subject to penalties and legal consequences. Here are some of the consequences you may face:
- Penalties and fines. The BIR may impose penalties and fines for late registration or non-registration. The penalties may include a surcharge of 25% of the tax due, plus interest of 20% per annum on the tax due.
- Closure of business operations. The BIR may close down your business operations if you fail to register or comply with tax laws and regulations. Closure orders may be issued by the BIR Commissioner, Regional Director, or Revenue District Officer.
- Inability to transact with government agencies. If you’re not registered with the BIR, you may not be able to transact with government agencies, such as DTI, SEC, and Bureau of Customs (BOC).
- Legal consequences. Non-registration or failure to comply with tax laws may be considered a criminal offense, and you may face legal consequences, such as imprisonment or fines.
- Inability to issue official receipts or invoices. If you’re required to issue official receipts or invoices, you may not be able to do so without an Authority to Print (ATP) from the BIR, which requires registration.
It is important to comply with tax laws and regulations to avoid penalties and legal consequences. If you’re unsure about the registration process or your tax obligations, it’s best to consult a tax professional or inquire with the BIR.
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