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Re: How to register as professional self employed tax payer? Philippines

Active Member
John Paul Z Member Since: Mar 19, 2017

Hey! Good Day y'all.

 

If there is anyone I can talk to regarding the step by step procedure on how to register myself as a self-employed tax payer here in the Philippines would be highly appreciated.

Just a heads up, i dont know anything about BIR and stuff. Im totally dumb when it comes to these things.

 

I spoke to an accountant who was referred by a friend and was informed I cant be registered as a sole prorietor because I dont have a business I tried to explain that im offering my skill as my service to my clients (i know it doesnt sound right lol) but she just insists its not possible where i know infact that its possible based on some articles i read online.

Makes me wonder, maybe the process would eat up all of your energy and knowing how gov't offices works i bet it would be a gruesome battle Smiley Frustrated

 

Anyone who had a first hand experience in filing and dealing with BIR? 

Any help would be appreciated. Thank you.

46 REPLIES 46
Community Guru
Juvy Ann P Member Since: Oct 29, 2015

@John Paul Z wrote:

Hey! Good Day y'all.

 

If there is anyone I can talk to regarding the step by step procedure on how to register myself as a self-employed tax payer here in the Philippines would be highly appreciated.

 

I thought you "read the entire convo", John Paul.  I am referring to your other Asia Pacific post.  But I understand.  Reading is one thing.  Understanding what we have read is another thing.

Just a heads up, i dont know anything about BIR and stuff. Im totally dumb when it comes to these things.

 

I understand.  I used to be employed and someone else was processing my tax documents for me.  But I do not agree with you that you are totally dumb about BIR since that word is reflected in your payslip at least twice a month while you were still employed as what your profile indicate.  Are you referring to BIR as a thing?

 

I spoke to an accountant who was referred by a friend and was informed I cant be registered as a sole prorietor because I dont have a business I tried to explain that im offering my skill as my service to my clients (i know it doesnt sound right lol) but she just insists its not possible where i know infact that its possible based on some articles i read online.

 

I am a BIR-registered self-employed individual.  We are business individuals here, John Paul.  We're like LBC or DHL or UPS.  LBC transacts business outside the Philippines.  Upwork processes our payments, provides such a space as this forum.  Upwork is not our employer.  It is THE MALL.  And we are the boutique owners.  Are boutique owners business individuals who issue receipts/invoices to their clients in exchange for products or services that have been rendered?

Makes me wonder, maybe the process would eat up all of your energy and knowing how gov't offices works i bet it would be a gruesome battle Smiley Frustrated

 

Any process is built on either evolution or entropy, John Paul.  It depends on your perspective. 

 

I understand why you would hesitate to declare yourself as a self-employed individual, that is, based on "your" knowledge of how government offices work. And we're talking about Caloocan here.  What do you propose then?

 

Anyone who had a first hand experience in filing and dealing with BIR? 

 

I already answered your question, I guess.

Any help would be appreciated. Thank you.

 

I am not a client so I can't hire you.  I simply have experience when it comes to paying taxes as a self-employed individual in the Philippines.


 

Active Member
John Paul Z Member Since: Mar 19, 2017

"I thought you "read the entire convo", John Paul.  I am referring to your other Asia Pacific post.  But I understand.  Reading is one thing.  Understanding what we have read is another thing."

 

--> Yes I did read the entire convo on the other thread but still there are a lot of things I dont understand. On top of the list is how to change/register your TIN from "normal employee" to a self-employed professional tax payer. I saw this BIR form 1905 and my nose already bleed lol hahaha 

 

BIR1905_1.JPG

 

I didnt see anything that refers to that change of activity. So I felt like first step, im already facing a wall lol hahaha

 

"I am a BIR-registered self-employed individual.  We are business individuals here, John Paul.  We're like LBC or DHL or UPS.  LBC transacts business outside the Philippines.  Upwork processes our payments, provides such a space as this forum.  Upwork is not our employer.  It is THE MALL.  And we are the boutique owners.  Are boutique owners business individuals who issue receipts/invoices to their clients in exchange for products or services that have been rendered?"

 

--> precisely my point, I did explain to him what I would like to happen but he just said its not possible (or maybe I was not able to explain it well) I didnt argue he's "the accountant" eh but I know its possible. I just dont know how

 

"I understand why you would hesitate to declare yourself as a self-employed individual, that is, based on "your" knowledge of how government offices work. And we're talking about Caloocan here.  What do you propose then?"

 

--> Well I still want to pay my taxes (for the love of the country lol) and I know how important having an ITR (loans etc) Its quite hard to prove that you are earning if you dont have that proof of income. Also on the other thread, I remember somethig about a Professional Tax Receipt and with that, you can work anywhere in the Philippines (legally speaking atleast)

 

Im also thinking of going directly at my current RDO (from my previous company) and ask the procedure but if I dont know what im talking about and if im not lucky enough to get someone who's knowledgable from a BIR official.  so "nganga" lol hahaha 

Community Guru
Juvy Ann P Member Since: Oct 29, 2015

@John Paul Z wrote:

"I thought you "read the entire convo", John Paul.  I am referring to your other Asia Pacific post.  But I understand.  Reading is one thing.  Understanding what we have read is another thing."

 

--> Yes I did read the entire convo on the other thread but still there are a lot of things I dont understand. On top of the list is how to change/register your TIN from "normal employee" to a self-employed professional tax payer. I saw this BIR form 1905 and my nose already bleed lol hahaha 

 

It looks like the cancellation of your old TIN will not be a valid option.  You are not dead yet and your former TIN was a valid TIN.  BIR Form 1901 must be the first form to be accomplished with your existing TIN.

 

BIR1905_1.JPG

 

I didnt see anything that refers to that change of activity. So I felt like first step, im already facing a wall lol hahaha

 

There is a need to accomplish BIR Form 1905 when you change your address, order for a new set of receipts/invoices, update your books of accounts, wish to go abroad and have a tax clearance to be presented to the embassy or whoever processes visas, lose your COR or TIN card, or dissolve a partnership as in the case of a business having that type of ownership.

 

"I am a BIR-registered self-employed individual.  We are business individuals here, John Paul.  We're like LBC or DHL or UPS.  LBC transacts business outside the Philippines.  Upwork processes our payments, provides such a space as this forum.  Upwork is not our employer.  It is THE MALL.  And we are the boutique owners.  Are boutique owners business individuals who issue receipts/invoices to their clients in exchange for products or services that have been rendered?"

 

--> precisely my point, I did explain to him what I would like to happen but he just said its not possible (or maybe I was not able to explain it well) I didnt argue he's "the accountant" eh but I know its possible. I just dont know how

 

One thing that I have learned in this platform is that there is such a phenomenon as life-long learning.  Upwork, for me, is one pedagogical paradigm (although Wassim believes that the platform is a science).  I am fascinated with taxes not because I studied accounting in college but because I need to solve my own business problems with the limited resources that I have.

 

"I understand why you would hesitate to declare yourself as a self-employed individual, that is, based on "your" knowledge of how government offices work. And we're talking about Caloocan here.  What do you propose then?"

 

--> Well I still want to pay my taxes (for the love of the country lol) and I know how important having an ITR (loans etc) Its quite hard to prove that you are earning if you dont have that proof of income. Also on the other thread, I remember somethig about a Professional Tax Receipt and with that, you can work anywhere in the Philippines (legally speaking atleast)

 

On top of the benefits you mentioned, I think that paying for our taxes have mental health benefits.  Our country may not be able to give us enough employment opportunities but that does not mean that we can stop from stealing life and hibernate in a zone called depression-and-economic-incompetence.  This is why I have repeatedly expressed how grateful I am that Upwork exists and I have great clients who make it possible for me, a hag, to continue to be significant.

 

Im also thinking of going directly at my current RDO (from my previous company) and ask the procedure but if I dont know what im talking about and if im not lucky enough to get someone who's knowledgable from a BIR official.  so "nganga" lol hahaha 

 

That's a good idea.  Rock on, John Paul.  


 

Active Member
John Paul Z Member Since: Mar 19, 2017

Ahhh Form 1901BIR1901_01.JPG

 

And I believe I should tick the one that says professional. However unlike you I dont have any PRC license. Do you think its gonna be an issue?

 

I also read something online about being registered as sole proprietor but others encounter some BIR officer ask them to provide DTI and Mayor's permit

 

And what I've learned so far is that you may omit those permits because you'll have it registered under you birth certificate name. But what if the BIR officer still insist, what should I do?

Active Member
John Paul Z Member Since: Mar 19, 2017

Also do you have "Professional Tax Receipt" ? Does it come from BIR too?

Community Guru
Juvy Ann P Member Since: Oct 29, 2015

Were you able to meet the "Officer of the Day", John Paul?  Under Item #19 of BIR Form 1901 I wrote my full name as my business name and "freelance contractor" as my occupation.  Taxes that are applicable to me are income tax (quarterly and annual), other percentage taxes under the National Internal Revenue Code (specifically Monthly Percentage Tax), and registration fees.  PSIC codes will be filled up by BIR.

 

I am not familiar with the "Professional Tax Receipt" that Francisco suggests.  I checked "sole proprietorship" as my taxpayer type.

 

This is how my O.R.  looks like:

 

official_receipt_sample.jpg

 

I wonder how it will be if you choose "professional" as your taxpayer type.  That would be interesting, don't you think?  Now, I feel excited as to the outcome of your "study". Smiley Happy

Highlighted
Active Member
John Paul Z Member Since: Mar 19, 2017

Thanks for the response!

I have a question? When you wrote your full name under item #19 of the BIR form 1901 did the BIR officer ask you for your DTI registration? How did it go?

 

So far my research lead me to the following, if your a sole proprietor you need to have the following:

 

  • DTI registration
  • Baranggay Permit
  • Mayor's Pemit and lastly
  • BIR registration

But based on what I understood, you skip the first three and went directly to BIR. So i guess im wondering, what did you do differently whereas others were asked for a DTI registration since they ticked the sole proprietorship 

Im still planning to pay a vist for my current RDO, I still dont have the luxury of time. Maybe after this lenten season. 

Community Guru
Juvy Ann P Member Since: Oct 29, 2015

Hi John Paul,

 

As I told you in this thread, it was for the season of annual income tax return filing that I entered the process of registering myself as a self-employed individual.  I submitted a notarized Certificate of Earnings Report (which I downloaded from my UW account) signifying that I am receiving payments from my clients through the platform although UW is not my employer.  

 

Going back to the DTI permit.  It looks like the DTI permit is only necessary if you wish to have a business trade name. I did skip that part as I wanted my full name to be my business name.  Also, it seems that you need to have a business trade name if you need to occupy a boutique just to send files to your clients online.

 

For more information, please read this:

 

http://www.bir.gov.ph/index.php/registration-requirements/primary-registration/application-for-regis...

Active Member
John Paul Z Member Since: Mar 19, 2017

 

Thanks Juvy.

 

And since we earn in dollar through UW i believe thats where the Certificate/s of Inward Remittance comes in right? Is it the one you have notarized? Or was it the one you downloaded directly through UW? 

 

I guess other mode of payment transactions we received from clients would also work as a proof of your earnings

 

 

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