[Ask The Tax Whiz] BIR Business Registration: What to know?

The Philippine Tax Whiz discusses the regulations regarding the mandatory registration for persons engaging in businesses, whether brick-and-mortar stores or online trade, pursuant to Revenue Regulations 15-2024

Is there a set deadline to register my business with the Bureau of Internal Revenue (BIR)?

According to Section 236(A) of the Tax Code, every person that is subject to internal revenue tax should register with the BIR based on the following: 

1. Within 10 days from date of employment
2. On or before the commencement of business
3. Before payment of any tax due, or 
4. Upon filing of a return, statement, or declaration as required under the Tax Code

Any person who fails to register in the time frame specified shall be liable for fines and penalties, with the penalty for late voluntary registration set at P1,000.

On the other hand, failure to register the head office or branch has a stiffer penalty, starting at P5,000 for micro taxpayers, P15,000 for small taxpayers and P20,000 for medium and large taxpayers.

I have an online business via an e-commerce platform such as Shopee or Lazada , do I still have to register with the BIR? 

Yes. Most online stores register with the Department of Trade and Industry (DTI) but this is not enough. You still need to register your e-commerce business with the BIR, as the business would still be covered by the regulations for mandatory registration. 

Here are the list of business types that are covered:  

1. Sale and/or lease of goods or services through brick-and-mortar stores
2. E-commerce or online businesses, whether formal or informal, including sale, procurement, or availment of physical or digital goods, digital content/products, digital financial services, etc. 
3. Operation of digital or e-market platforms
4. Sale and/or lease of goods and services through digital platforms
5. Digital content creation and streaming that are income generating
6. E-retailing of goods and services
7. Sale of creative or professional services, on-demand or freelance services or digital services supplied over the internet, and
8. Other forms of online businesses

Is there a difference when it comes to registration for brick-and-mortar stores versus online businesses and storefronts?

Yes. Anyone who sells goods and services through a physical store (brick-and-mortar) should register its head office at the BIR district office that has jurisdiction over the place’s address. Meanwhile, any branches should register at the BIR district office that has jurisdiction over the branch in question. 

For online stores that are run by brick-and-mortar stores, they have to register their store name with the BIR as an additional “business name” attached to the head office or branch managing the online business. 

On the other hand, if the store is fully online, or runs through an e-commerce storefront such as Shopee, TikTok Shop, or Lazada, they will have to register at the BIR district office that has jurisdiction over the place of residence / principal place of business registered with the Securities and Exchange Commission.

Keeping up with mandatory registration requirements can be challenging, but it doesn’t have to be. For more expert tax advice, CONSULT ACG. – Rappler.com