To new beginnings
ANEW year and a new tax law for Filipinos to comply with. For those of who may be planning to start a new business venture this year, here are some reminders on registering a business with the Bureau of Internal Revenue ( BIR), and how the Tax Reform Act for Acceleration and Inclusion (Train) law may affect it.
Registration requirements
Revenue Memorandum Circular (RMC) 70-13, as amended by RMC 93-16, provides the necessary documentary requirements for registering corporations or partnerships. The requirements listed below are to be submitted upon registration within 10 days from date of employment, on or before commencement of the business, before payment of any tax due, or upon declaration:
Corporations or partnerships
Application for Registration for Corporations/Partnerships (BIR Form 1903);
Photocopy of Securities and Exchange Commission ( SEC) Registration;
Articles of Incorporation/ Articles of Partnership;
Photocopy of Mayor’s Permit/ Duly received application for Mayor’s Business Permit;
New sets of permanently bound books of accounts;
Proof of payment of annual registration fee of P500;
Application for Authority to Print Receipts and Invoices (BIR Form 1906);
Final and clear sample of principal receipts/invoices; and
Other pertinent documents as may be required.
Branch and facility types – Nonindividual
Application for Registration for Corporations/Partnerships (BIR Form 1903);
Photocopy of Mayor’s Permit/ Duly received application for Mayor’s Business Permit;
Board Resolution/ Secretary establishment, if any;
New sets of permanently bound books of accounts;
Proof of payment of annual registration fee of P500;
Application for Authority to Print Receipts and Invoices (BIR Form 1906); and
Final and clear sample principal receipts/invoices.
Sole proprietorship or self- employed individuals
of Application for Registration for Self- Employed and Mixed Income Individuals, Estates/ Trusts (BIR Form 1901)
an authorized government body showing the name, address, and birthdate of the applicant;
Photocopy of Mayor’s Permit/ Duly received application for Mayor’s Business Permit;
Professional Tax Receipt/Occupational Tax Receipt issued by a Local Government Unit or a Department of Trade and
New sets of permanently bound books of accounts;
Proof of payment of annual registration fee of P500;
Application for Authority to Print Receipts and Invoices (BIR Form 1906);
Final and clear sample of principal receipts/invoices; and
Other pertinent documents as may be required.
Branch and facility types - Individual
Application for Registration for Self- Employed and Mixed Income Individuals, Estates/ Trusts (BIR Form 1901);
Photocopy of Mayor’s Permit/ Duly received application for Mayor’s Business Permit;
Professional Tax Receipt/Occupational Tax Receipt issued if any;
New sets of permanently bound books of accounts;
Proof of payment of annual registration fee of P500;
Application for Authority to Print Receipts and Invoices (BIR Form 1906); and
Final and clear sample principal receipts/invoices.
Registration for VAT
Section 236(G) of the Tax Code, as amended by Train, now requires entities engaged in sale, barter, or exchange of goods, properties, or services with gross receipts exceeding P3 million – from the previous threshold of P1.9 million – to register for value-added tax (VAT). Additionally, entities not meeting the gross receipt threshold of P3 million may still opt to register for VAT. However, it should be noted that TRAIN now prohibits the optional VAT registration of entities electing the 8% tax on gross sales under income taxation.
Issuing commercial papers
Additionally, Section 73 of Train amends Section 237 of the Tax Code, increasing the threshold requirement in the issuance of commercial papers. Commercial papers in this case purport to and other related documents. Formerly, any entity liable to internal revenue taxes shall issue commercial papers for transactions amounting to at least P25. With the passage of TRAIN, the P25 threshold has been increased to P100 per transaction.
Electronic sales reporting
of In conjunction with the above discussion on commercial papers, TRAIN raises a new system years. Section 74 of the new law requires taxpayers engaged in export business, taxpayers engaged in e- commerce business and large taxpayers to issue electronic commercial papers, in lieu of manual commercial papers, originals of which are to be issued to customers. Similarly, the abovementioned taxpayers also have to electronically report to the BIR their sales data by use of electronic point of sales systems.
The Train aw ushers in a slew of changes that will no doubt affect Filipinos – both incomeearners and entrepreneurs. At least in terms of registration, the new law exempts a greater population of taxpayers from VAT. However, with the passage of time, the provisions of TRAIN may not be so easy to comply with, especially with regard to the electronic reporting requirements. Nonetheless, as long as one remains compliant with the new requisites and processes of business registration, there should be no need to fret.