BIR Process Flow for Professionals

Professional, classified as self-employed, refers to an individual or a group, practicing his or their profession or calling, with or without license under a regulatory body. And there are several people who work as Professionals (Doctors, Lawyers, Experts, Consultants, Freelance Agents, Advisers, Individual Sellers, among many others) who would want to register their own business, prefer to have their own receipt for every business transaction, but may be clueless with the government process of acquiring legalities. Yes, there are several private companies like a number of accounting firms in the Philippines who can assist along the way but it is always ideal that a Professional himself knows how to go about the flow of the system. We have prepared for you the step by step procedures mandated by the Bureau of Internal Revenue (BIR) regarding the requirements for proper registration.  

Step 1. Secure BIR Certificate of Registration Requirements:

  1. Properly filled up BIR form 1901
  2. Photocopy of PTR (Professional Tax Receipt), latest
  3. Photocopy of birth certificate
  4. Photocopy of marriage contract, if any
  5. Photocopy of birth certificate of dependents, criteria as follows: minimum of four (4) children and age must be below 21 years old;
  6. Sketch of residence address
  7. Paid Registration form (BIR Form 0605)

  Step 2. File all requirements to BIR; listed below are the mandatory registration documents and its costs, as follows:

Registration fee ( BIR form 0605) Php 500.00
Books of Account Php 200.00
Doc Stamp Php 115.00
OR Printing (vary depends on size) Php 1,000-1,500.00

  Step 3. Attend the required taxpayer’s briefing at the RDO before the release of the BIR Certificate of Registration (COR) or      BIR Form No. 2303, which reflects the returns that must be filed and the taxes to be paid.

Note: The COR must be conspicuously displayed in the Professional’s Place of business

  Step 4. Apply for Official Receipts/Sales Invoice using BIR Form No. 1906 – Authority to Print        

Requirements for Authority to Print

  1. BIR Form No. 1906 Application for Authority to Print
  2. BIR Form No. 2303 Certificate of Registration (photocopy)
  3. BIR Form No. 0605 Registration Fee (photocopy)
  4. Sample Receipt & Job Order
  5. Certificate of Registration (Printer)
  6. Verification of CMS Cases (Printed)
Note: An “Ask for a Receipt” Notice (ARN) must be posted conspicuously in the Professional’s business establishment.

  Step 5. Register books of accounts and have them stamped by the RDO where the Professional is registered.        

Books Requirements

  1. BIR Form No. 1905 (2 copies)
  2. Certificate of Registration (Photocopy)
  3. Registration Fee (BIR Form No. 0605, photocopy)
  4. Books

4.1 Columnar Book (For Cash Disbursement) 4.2 Cash Receipts Book 4.3 Ledger 4.4 Journal   Step 6. Update registration information, if needed, using BIR Form No. 1905 (change of registered address, additional tax types, etc.) and submit this at the RDO having jurisdiction over the place of business.

REGISTRATION REMINDER:The BIR conducts a Tax Compliance Verification Drive (TCVD) or tax mapping operations to monitor if the taxpayer is complying with his registration requirements particularly on COR, ARN and books of accounts. 

BOOKKEEPING REQUIREMENTS Professionals are required to maintain books of accounts using any acceptable method of accounting (accrual or cash basis) in a consistent manner. The same shall be preserved within the prescriptive period (3 years from the close of taxable year) for post audit examination. INVOICING REQUIREMENTS

  1. Receipts or sales or commercial invoices shall be serially numbered.
  2. Among other things, the name, business style, the TIN and business address of the Professional shall be shown.
  3. Receipts or invoices shall be issued by the Professional for every payment received.
  4. The original receipt or invoice shall be issued to the client at the time the transaction is effected and the duplicate shall be preserved in the place of business for a period of 3 years from the close of the taxable year.

WHAT ARE THE BIR REQUIREMENTS?

  1. Registration Fee (RF)

*An Annual Registration Fee of Php 500.00 shall be paid on or before the last day of January every year after the initial registration. WHERE CAN A PROFESSIONAL FILE & PAY TAX DUE?

  • The return shall be manually filed and paid with any Authorized Agent Bank (AAB) within the Revenue District Office (RDO) where the Professional is registered or required to register. In the absence of an AAB, with a Revenue Collection Oficer (RCO) or duly Authorized City or Municipality Treasurer who shall issue a Revenue Official Receipt (BIR Form No. 2524).
  • In case the return is no payment to be made, the return shall be filed with the RDO where the Professional is registered.
 TAX FORM AND DUE DATES 

  1. Payment form (individuals/corporations/partnerships)

BIR Form No. 0605 – On or before the last day of January every year after the initial registration  

  1. Income Tax

1701Q   1Q     Jan-Mar      Apr 15

1701Q   2Q    Apr-June    Aug 15

 1701Q   3Q    July-Sept    Nov 15

 1701   final  Jan-Dec      Apr 15 FF YR

  1. Percentage Tax

2551M 20th day after the end of each month  

  1. Value Added Tax

2550M 20th day of succeeding month

2550Q 25th day of the month of the following the end of a particular quarter

*Any person or entity who, in the course of his trade or business, sells, barters, exchanges, leases goods or properties and renders services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed One Million Nine Hundred Nineteen Thousand Five Hundred Pesos (P1,919,500.00).

 

It’s not that hard right? Are you ready to register? Feel free to get in touch with us for your questions, comments, and suggestions given on these guidelines. JCL-BPO team would be happy to assist you!

(Image courtesy of cooldesign/FreeDigitalPhotos.net)  

DISCLAIMER: The content of this article may become outdated because of changes in the rules and regulations over time. It does not substitute the need for inquiring a professional advice.

By Joana Lagrosa, JCL-BPO Director for Operation


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