The deadline for the renewal of registration for self-employed taxpayers is on January 31, 2018.
The following documents are required:
(a) accomplished BIR Form 1905
(b) accomplished BIR Form 1906
(c) Cash Disbursement Book for the year 2017
(d) Cash Receipt Book for the year 2017
(e) Cash Disbursement Book for the year 2018
(f) Cash Receipt Book for the year 2018
(g) List of Unused/Expired Official Receipts/Invoices
(h) Sample Official Receipt/Invoice Layout (for 2018)
(i) Authority to Print Receipts (ATP) for the year 2017
Item (a) is intended for such purposes as changing registered name and address, renewal of application for the authority to print receipts, updating books of accounts, replacement of lost or damaged TIN card, etcetera.
Freelance contractors need not register with the Department of Trade and Industry (DTI) if the registered name is not to be replaced with a business or trade name that is fit for companies. The barangay clearance certificate and mayor's business permit is for businesses with employees.
Self-employed professionals are business owners who work in their respective homes, clinics, or firms and pay for their professional tax at the local government unit if they are practicing their profession in conjunction with their freelancing activities.
Full time freelance contractors remain as sole proprietors. An article I have read about, however, stipulates that data entry professionals need to pay for their professional tax as mandated by their local government unit (LGU). These professionals need to present their Professional Regulation Commission (PRC) license to the collecting agent.
Some LGUs offer perks during the tax season. The City Hall that I visited recently offer free-flowing black coffee heated over low-beam technology to taxpayers.
Full-time employees who have freelancing as their additional source of income need not pay for their professional tax. But their income has to be declared in a different income tax return -- the one with "mixed income" as the heading.
Item (b) has to be accomplished with details derived from item (i) most specifically the following:
(1) Official Receipt/Invoice Printer's Name
(2) Official Receipt/Invoice Printer's TIN
(3) Official Receipt/Invoice Printer's BIR Accreditation Number
(4) Official Receipt/Invoice Printer's Date of Accreditation
(5) Official Receipt/Invoice Printer's Business Address
Item (c) and (d) have to be old while items (e) and (f) need to be new and may be purchased at the BIR office. Items (e) to (f) are for stamping by a designated BIR Officer. The first entry in these new books of accounts will be credited for next year's filing of the Annual Income Tax Return. Whatever has been entered in the old books of accounts prior to the date of stamping must be accounted for in the Annual Income Tax Return for 2017.
Photocopies of the first pages of items (c) and (d) may also be required for submission.
Items (g) and (h) serve as additional attachments to BIR Form 1906 or item (b).
Other pertinent information relating to tax filing are available at BIR's official website.
For fresh registrants here is the revised checklist of requirements:
a) BIR Form 1901;
b) identification documents that may include the following:
> birth certificate, passpport, driver's license, and/or community tax certificate;
c) photocopy of the Mayor's business permit or duly received application for Mayor's business permit (this will have to be notarized) if the former is still being processed by the local government unit (LGU); and/or
d) professional tax receipt (for licensed individuals including data entry professionals)/occupational tax receipt (for fresh college graduates who are yet to apply for a license in their respective fields); or
e) Department of Trade and Industry (DTI) certificate (for those who wish to register with a trade name
and, consequently, run their own companies either with and without the goal of hiring employees in
f) new sets of permanently bound books of accounts (to be accomplished within 30 days after the COR is released) to serve as Cash Disbursement and Cash Receipt Books;
g) BIR Form 0605 processed by the Authorized Agent Bank (BPI, UCPB, Metrobank) to serve as a proof of payment of the annual registration fee (Php 500.00);
h) BIR Form 1906 (Authority to Print Receipts);
i) Final and clear sample layout for the sales invoice (if services are offered) or official receipt (if
products are to be delivered);
j) franchise documents including the Certificate of Public Convenience for common carriers;
k) photocopy of the Trust Agreement (for Trusts);
l) photocopy of the Death Certificate of the deceased (for Estate under judicial settlement);
m) Certificate of Authority for the Barangay Microbusiness Enterprises (BMBE)-registered entity; and
n) Proof of Registration/Permit to Operate for BOI/BOI-ARMM, FEZA, BCDA and SBMA.
BIR will commence the processing of documents ONLY IF all required documents are submitted (neither power struggles nor dramatic feats and fits will be tolerated and entertained). Otherwise, fresh registrants are to accomplish the Acknowledgment Note found at the bottom of the checklist. This will serve as a promissory note and only 5 working days are alotted for the completion of requirements. Pending applications are expected to be under the custody of BIR for only 30 calendar days after the preliminary documents have been forwarded to the office.
I formally finished the renewal of registration for the year 2018. I noticed that there have been many changes since I registered last year.
For instance, official receipts (which are by, the way, intended for services) and sales invoice had the same price but have many pages (three at the maximum) per OR number. Now, I must need to secure a carbon paper. Hahaha! The BIR Officer who attended to my needs was rather sharp and must have seen that my 2017 official receipt entries at the duplicate copy level were all in original ink.
Also, it looks like if I am residing in Area A, then my invoice printer must reside somewhere in Areas B to Z. It is clearly stipulated in my Taxpayer's Sworn Statement that I must not contact whoever my printer is to engage in the printing of my invoices outside the jurisdiction of BIR. Transactions regarding the printing of invoices must be done at the BIR Office.
I also noted that if I have to request for a Certified True Copy of the ITR then there is a necessity to prepare three sets -- one will be for the Receiving Officer (in cases when there are no payments to be made and the ITR has been entered into the database), one will be the Original Copy and the other will be the "Certified True Copy" of the ITR -- in addition to the Request Letter which is to be addressed to the Administrative Officer. The Certification Fee is Php 100.00 and documentary stamps are worth Php 30.00 per set.
Once the "Certified True Copy" of the ITR is initialed by the Administrative Officer, the documentary stamps will have to be pasted onto the first sheet and the the first three pages will have to be photocopied and given to the Administrative Officer for filing purposes. A logbook must be signed before the "Certified True Copy" of the ITR is formally released to the one requesting for the document.
Also, for self-employed individuals who may wish to expand their freelancing business into other businesses, there is a need to adopt a new business name -- a trade name. A trade name may be generated by the Department of Trade and Industry's (DTI's) online database. But the hitless result (which is translated as an original trade name) will still have to be validated by a DTI Representative or Officer. The registration process is not done at the City Hall but rather at the "Negosyo" Center.
This is what happened to me.
Prior to filing BIR Form 1905, I was instructed to accomplish the DTI Permit application form in 2 copies and present 1 government ID at the "Negosyo Center". To reiterate what I stated in previous paragraphs, online application is one thing but the application must be validated by a DTI Officer. I paid Php 200.00 for the registration because the business is within the barangay scope only and Php 15.00 for the documentary stamp.
I had an orientation about rules on how to create a trade name. It was like a grammar class. Basically the DTI Officer who trained me established that the descriptor must precede the business name --except that it must not be THE BEST. That is why he suggested that I should change my trade name -- the one that was accepted by the database. He suggested that if offering online services is my core business then I will have to be a merchant of items that I use in my business -- or something to that effect. Did he say something about leveraging?
Then afterwards, three DTI Officers pointed out that such scenarios as applying for a DTI permit just to be able to make a business loan is not desirable. They emphasized that the ultimate goal of a business is to be able to hire someone and give him or her all the benefits that they deserve.
Two women demonstrated how business people dress up-- they wore simple clothes, no makeup, and an unassuming attitude.
The cashier was a vending machine called "Pay Bilis" and I was not given a change.
One retiree -- an old man and his wife portrayed the nature of business -- that if one must be in business then he or she must prepare to lose.
I was just observing the actors and actresses and I could glean from how they related with each other that they have a splendid team work and that their way of educating future business owners is rather unusual but appropriate.
The last phase on my to-do list is the Mayor's business permit. I learned that I need not pay for the homeowner's fee because the new business location is a separate subdivision and that it, probably, will have its own homeowner's association in the future.
In order to secure a business permit in the form of a barangay clearance certificate, I paid Php 600.00. Last year, I paid Php 500.00 only. Then I also paid for my Community Tax Certificate which reflects my gross income for 2017 as stated in my Annual Income Tax Return. So, somehow the ITR must be accomplished first prior to securing the said certificate.
As for the locational or zoning clearance, I am required to transfer to my new home office first and take pictures of my actual home office with PC, printer and appropriate supplies and include the front view, and side views (thank goodnes they're not requiring me to submit a top view) for both left and right portions of the road near the location of business. Pictures which are downloaded from the internet may be accepted if the applicant is the developer of the subdivision.
The Mayor's business permit will be released after all steps have been followed and processed at the local government unit where my business is registered.
Hi juvy. I am applying for a consultant position in the government. Is it required to apply for bir form 1906 when applying for certificate of registration? is it required to have books of accounts? the employer said that I don't need anymore to apply for 1906 because the HR won't ask for it, just the ITR.
@Joe Carl B wrote:
Hi juvy. I am applying for a consultant position in the government.
Wow! I'm happy for you, Joe Carl.
Is it required to apply for bir form 1906 when applying for certificate of registration?
If you want to be a self-employed individual then BIR Form 1906 might be necessary.
is it required to have books of accounts?
the employer said that I don't need anymore to apply for 1906 because the HR won't ask for it, just the ITR.
There is a huge difference between self-employed individuals and employees. But a self-employed individual can have a contract with an employer although the latter may assume the position of a client. It is a freelance contractor's prerogative to fire a client. Clients may have the option to black-list freelance contractors.
Wait, what kind of an employment scheme are we talking about again? Well, the "good" news is that a Japanese firm has recently been entrusted to kind of fix one of the major railway systems at the Metropolitan Manila. Japan is known for the best train systems in the world. And if you choose to follow your HR's instructions, then you might just be one of those who will benefit from this mechanical fixing attempt.
@Joe Carl B wrote:
Great! Thanks for accommodating me.
One last question. Which type of book should I register from the books of accounts required by the BIR?
If you're planning to be a self-employed individual then the Cash Receipt and Cash Disbursement books will be necessary.