You don't have to hide it. I know most of you haven't registered yet. We all have been there. You have to note, aside from death, you can't escape from taxes. It's our duty as Filipino citizens to pay them for, hopefully, the betterment of our country. But for most, we want to comply with our duties. We just don’t know how. Worry not. I tell you. The registration process is quite easy actually. These are the steps to register in the BIR as a freelancer in the Philippines.
Find the RDO you are Registered in First of all, look for the Revenue District Office (RDO) registered under your Tax Identification Number (TIN). If you don't have a TIN yet, go to the assigned RDO in your home address and get your TIN there. The problem is how will you know? The easiest way is to call BIR's hotline number 981-8888 and just ask them.
Requirements to Prepare
The PTC or OTC is the annual tax levied on professionals by the local government unit for practicing their profession. Just go to the city hall and get it there. Usually, it's around 150 PHP.
- NSO Birth Certificate
- Marriage Contract
- NSO Birth Certificate of Dependents
- Community Tax Certificate
- Billing statement with Address
- Philippine-issued valid ID
- Professional Tax Receipt (for PRC Licensed Professional) or Occupational Tax Receipt (for those professions like actors and freelancers!)
Projected Expenses for the Registration 1500 One Dozen Receipt Booklets (Roughly 1000 – 1500 PHP) 500 BIR Registration Fee 330 Birth Certificate 150 Professional Tax Receipt or Occupational Tax Receipt 100 Books of Accounts (General Journal, General Ledger, Cash Receipts Journal, Cash Disbursements Journal) 100 Miscellaneous (Printings, Documentary Stamp Taxes, etc.) 2680 Estimated Total Expenses (This doesn't include the cost for the marriage certificate, birth certificate of dependents, and community tax certificate because this may be different for everyone.)
Register or Update your Certificate of Registration (COR) Two things will happen. Its either you'll register as a new applicant (because you don't have a TIN) or you'll update your certificate of registration to add your profession. It's the same process, just a different form: Form 1905 (Update of Registration for those with an existing TIN) Form 1901 (1 & 2)(For first-time registrants for Self-Employed Individuals) Form 0605 (Payment Form for the Registration) If you forgot to print these forms, you can also get them for free in the BIR office. But you need to photocopy it in TRIPLICATE every single time. This is a useful tip to avoid wasting time going back-and-forth the photocopying lady. After seeing the forms, you might vomit from its utter complexities. Fear not. Every BIR office has officers of the day to guide you as to what to fill-up. In my experience, most of them are pretty helpful. Just ask nicely as well. It's like filling up the complex bank forms. Just let them check the boxes you need to fill up.
Payment of the Registration After filing the form, you just need to pay P500 to an Authorized Agent Bank (AAB) for your RDO. Afterward, you will be scheduled for a BIR seminar and given the date for pick up for the Certificate of Registration (COR). This is the end of the registration. But better do the following additional processes because you will be fined if you don't. And besides, you don't want to go back and forth just for this registration again.
Register your Book of Accounts The BIR requires us to also keep a book of accounts for our transactions. To save time, you can also do this after your registration. Just bring a General Journal, General Ledger, Cash Receipts Journal, and Cash Disbursements Journal with you. You can buy this in national bookstores. Some people also sell this in the BIR area (But it might be more expensive).
There are certain accounting rules for different account titles and categories. Better ask an accountant or a bookkeeper to do this for you. You can just keep tabs on all your receipts and disbursements which have are normal and necessary in your practice.
- General Journal is the record of your daily transactions.
- General Ledger is a summary of all the transactions per account title or category (e.g rent expense, utilities expense, etc.)
- Cash Receipts Journal is the summary of cash received (like service income, loan proceeds, etc.)
- Cash Disbursement Journal is the summary of the cash paid (like cash paid for expenses, withdrawal from your profession for personal use, etc.)
Register your "Authority to Print" for Receipts The last additional step is to register an “authority to print”. Basically, it's a document authorizing you to print your personal receipts to BIR's accredited printers. NOTE: You can only print your bundle of receipts from accredited printers. Every RDO has a list they can give you. The receipts are valid for five years of use. With that, you're done! You are now registered legally as a freelancer! Good luck!
Next, here's how to send payment to Filipino staff