BIR revised guidelines and procedures in registering new businesses

People today are more geared towards being entrepreneurs. With the availability and accessibility of different online platforms for business opportunities, people can have their own business without having to own or lease a physical storefront. However, many are unaware of the regulatory requirements of starting a business. For those who are aware, they are sometimes too impatient to register their business first before starting their operations, because of the impression that the registration process takes a long time and is very complicated. Hence, many businesses, especially home-based businesses, are not registered with the Bureau of Internal Revenue (BIR).

Over the years, the BIR has sought to simplify and minimize the processing time of registering taxpayers. However, there have been reports that the old procedures and requirements (e.g., lease agreements for self-employed individuals) are still being followed and required by some Revenue District Offices (RDOs), resulting in delays in the issuance of the Certificate of Registration (COR). The inconsistent requirements of the RDOs is causing confusion among the taxpayers. In light of this, the BIR issued Revenue Memorandum Order (RMO) No. 06-2018 on Jan. 18, to improve frontline services and further streamline the process by introducing the implementation of a single-window policy in receiving and releasing documentary requirements for business registration. The single-window policy is implemented by establishing a counter or special lane specifically to accommodate new business registrants.

On April 25, the BIR issued RMO No. 19-2018, which provided revised guidelines and procedures for registering new businesses. Following is a summary of the procedures to be followed by registrants under the said RMO:

1. Prepare requirements provided in the Checklist of Documentary Requirements (CDR) before going to the RDO having jurisdiction over the place of business or residence of the taxpayer.

The CDR attached as Annexes A1 to A3 of RMO No. 19-2018 is the same as the requirements provided under Revenue Memorandum Circular No. 137-2016, with the following amendments:

a. Adding of Special Power of Attorney (SPA) and ID of authorized person, in case of authorized representatives who will transact with the Bureau (for individuals and international organizations);

b. Adding of Board Resolution indicating the name of the authorized representative and Secretary’s Certificate, in case of authorized representative who will transact with the Bureau (for non-individuals); and

c. Removal of new sets of permanently bound books of account.

2. Secure a queuing number for the New Business Registrants Counter (NBRC).

3. Submit duplicate copies of the following, together with the complete documentary requirements per CDR:

a. Signed CDR;

b. Filled out Application for Registration (BIR Form No. 1901/1903, whichever is applicable), and;

c. Accomplished BIR Form 0605 for payment of registration fee.

4. In case the taxpayer has an existing TIN, but is not registered with the RDO, the taxpayer shall apply for a transfer of registration by accomplishing BIR Form No. 1905.

5. Once called for payment, pay the registration fee and/or other tax liabilities or penalties on registration to the NBRC or New Business Registrant Officer.

Registrants with existing TIN have the option to pay the registration fee before going to the BIR through any of the following payment channels by accomplishing the BIR Form 0605 under ATC-RF:

a. Authorized Agent Banks (AABs);

b. ePayment channels of AABs; and

c. Mobile payment through GCash.

6. Claim the Certificate of Registration (COR), auto-approved Authority to Print (ATP), and “Ask for Receipt” Notice from the NBRC upon approval together with the eReceipt as proof of payment of the Registration Fee and/or other tax liabilities or penalties.

After securing these documents, new business registrants may proceed with the registration of books of account within 30 calendar days from date of registration.

7. Sign the log sheet provided to confirm receipt of the COR and ATP.

8. Accomplish the Standard Taxpayer Feedback System, and drop at the designated drop box.

9. Attend the scheduled taxpayer’s initial briefing to be conducted by the concerned RDO for new business registrants in order to know their rights, duties/responsibilities, and tax compliance.

RMO No. 19-2018 also enumerated the various officers assigned and their corresponding duties and responsibilities in implementing the Single Window registration processes.

Two main goals of RMO No. 19-2018 are to make the registration process more convenient and to improve taxpayer satisfaction. With these goals in mind, we hope that taxpayers can expect an efficient and consistent implementation of the above-mentioned RMOs throughout all RDOs. This will encourage more taxpayers to register, which will benefit both the BIR and taxpayers. For the BIR, more business registrants mean more revenue collection. For taxpayers, it will open more business opportunities, since many companies only transact with legal businesses that issue BIR-approved official receipts/invoices for purposes of claiming input tax and expenses.

Despite process improvements, it is still not going be a walk in the park with the many requirements, especially for first time registrants. Hence, seeking professional help in setting up their business may be a good investment.

Juvy de Jesus is a senior of the Tax Advisory and Compliance of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory, and outsourcing services firms in the Philippines.

As published in BusinessWorld, dated 01 May 2018