First off, let’s tackle the terms that best defines us freelancers:
- Whatever may be your field of expertise, you are identified as a professional or self-employed, since you are an individual practicing your profession. The BIR may ask if you have a license, so just inform them that your line of work doesn’t require one to operate.
- Registering as a professional means labeling yourself as an individual with a business of your own. This involves unique requirements that differ from registering as a tax-paying employee of a company.
BIR Requirements for Professionals/Freelancers
Before visiting the BIR, you must have these requirements on hand:
- A registered TIN number — link
- P500 TIN registration fee
- (1) xerox copy of your birth certificate
- (1) xerox copy of your marriage certificate (if married) and the birth certificate/s of your dependents, if you have any.
- (2) copies of completed BIR 1901 form — part 1 | part 2
- (1) original and (2) xerox copies of BIR 605 payment form used to pay the P500 registration fee
- (1) xerox copy of proof of address
- (1) xerox copy of ID with name, birthdate, and signature
Once you’ve managed to submit all these, the BIR will require you to buy and/or register the following:
- Books: (1) ledger, (2) columnar books, and (1) linear journal at P140
- (1) Documentary stamp at P15
- Invoices, depending on how much your printer charges
- Your printer’s registration fee, TIN number, and the job order for printing of invoices.
- Application for a TIN card (free)
I bought and registered all of these at the BIR office. Very convenient, I must say.
At this point, you should start looking for a printer who can assist you with the printing of your invoices. You also need to acquire a job order, the printer’s TIN number, and registration fee as these are part of the requirements.
In my case, since I didn’t know any, the BIR officer offered to contact and order a set of invoices from their own printers for me.
The Briefing for New Registrants
After submitting all my requirements, I attended a short seminar/briefing where a BIR representative walked me through the basics of taxes. This was a very good opportunity for me to understand the taxes I’ll be paying, to ask specific questions that are important for freelancers, and to clarify vague information about taxation.
If your revenue district office requires your attendance to this briefing, ask when the next schedule will be and attend it. This is a very good opportunity for you to ask questions, to clarify what isn’t clear about your taxes, and the like. Luckily for me, the representative who was available was very nice to me and explained the basics in a very simple and understandable manner.
These requirements are necessary to acquire two very important documents: your COR (Certificate of Registration) and your TIN card. Without these, your application will not be processed.
The Steps to Registering as a Tax Payer
I must admit that registering at the BIR was no easy trip, so if you want to avoid paying a big amount for transportation fares and waiting in line for hours, follow these steps:
- Register for a TIN number via the eReg page of the BIR website. Use the link above. You will then receive an email containing your TIN number, instructions on how to pay the registration fee, and a completed 1901 form that you can print and submit to the BIR. Print two copies of this form.
An accomplished BIR 605.
- Check which RDO (revenue district office) covers the location of your office. In my case, it’s RDO 33, which covers Ermita-Intramuros-Malate.
- Pay your P500 registration fee using BIR form 605 and through the following options:
- At an accredited agent bank of your RDO,
- G-cash, or
- The BIR’s eFPS or Electronic Filing and Payment System
I didn’t understand the instructions on how to use G-cash or eFPS to pay though, so I suggest paying your P500 at an accredited agent bank. Don’t forget to xerox 2 copies of the 605 payment form for the BIR.
- Visit your RDO. The best time I’d suggest is getting there on or before 09:00 AM to avoid the long lines. I got there at around 08:30 AM and so far the BIR personnel were energetic and attentive.
- Submit all of your documents. Make sure they’re complete and that you have the right number of xerox copies.
- The BIR officer will then instruct you to buy and register the documentary stamp and books. Make sure you have enough money (and spare change) to purchase these. If you don’t have a printer to hire for your invoices, ask the person assisting you if they could refer you to a printer that they know of.
- The BIR officer will stamp your books with labels and ask you to write your name, TIN number, address, and the purpose of the book. The two columnar books are cash receipts and cash disbursement, while the other two are the ledger and the journal.
- Attend the briefing or short seminar. Take down notes, listen carefully to the discussion, and ask all of your questions before leaving the seminar. Oh, and don’t forget to sign the attendance sheet/record book.
- Don’t forget to apply for your TIN card. Just ask the officer in charge of issuing the TIN cards and he/she will ask you to fill out a slip of paper with necessary details, such as your name, TIN number, address, contact number, etc.
- Get your COR and your TIN card.
If you were able to submit all of your requirements (including your printer’s requirements and the job order), you’ll be able to have your COR printed, signed, and your TIN card issued on the same day.
In my case, I have to wait for the printer’s requirements before I could get the COR and TIN, so all these including my invoices and books will be released together the next time I come back. If you’re going through a similar situation, ask when you can come back and confirm with the BIR officer that your documents and books will be released by then.
Important Last-minute Tips
A very busy BIR office.
And that’s how the registration process works. Before I end this post though, here are a couple of important tips that will hopefully make your trip to the BIR less stressful and frustrating.
- Be early when visiting the BIR. They don’t have a convenient and effective system of managing the people who visit for BIR concerns, so go there at around 08:00 AM or before 09:30 AM to avoid congestion.
- Gather all of your documents ASAP. It’s really a hassle to travel all the way to the BIR only to find out that you’re missing one or two requirements.
- If you do arrive late, bring entertainment with you. I brought a book to keep my occupied while waiting for my turn at the tax assistance unit. If you find entertainment in people watching though, that’s fine too.
- Find a printer you trust and that’s affordable. I was charged a big amount for printing, since the BIR officer was the one who facilitated that particular requirement for me. If you want to save on costs for printing, search for your own printer already.
- Don’t leave your house without spare change. This is especially for those who take public transportation and for the requirements that should be bought at the BIR. Keep a breakdown of P500 in your wallet, just to be sure.
- Bring a bottle of water. You’ll never know when you’ll get thirsty from all the waiting and the accumulated body heat!
You can also download this tax guide written and designed for self-employed professionals. Just right-click the link and save the link as PDF.
Hi Stef!
As promised, Thanks for this post! Can you explain more on having your own printer? As a graphic designer, I know a lot of print shops here in qc and in manila, but what will be their purpose?
Thanks,
Jeff
Hi Jeff and you’re very welcome! You’re basically hiring a printer/print shop to print your invoices. You’ll need to fill up a 1906 form as part of the requirements, which is the authorization to print invoices for your business. In that form, your chosen printer will supply a job order (how many invoices will be printed) and his/her TIN in that form.
I’m not quite sure yet, but I think your invoices should be renewed and printed every year. You can refer to the tax guide I uploaded for the correct information. 🙂
Additional info. Printed Official receipts/Sales invoices are valid for five (5) years from the date of Authority to Print (ATP) unless there is another amendment by BIR.
Hi!
I enjoyed reading your article! Thanks for your valuable information.
My only concern is do I really need to register for a TIN if I have it already when I worked as a call center agent in IBM? Also, I will soon enter my profession as a Registered Nurse so I’m confused if I will claim myself as a professional or self-employed (freelancing)?
As a freelancer just last year, I am also thinking of a way on how I can pay for my taxes. In just less than a year, I earned quarter of a million already and still counting. I think it’s a good investment if I will register myself as a taxpayer so I could benefit from this in the long run. We are thinking the same way and I was lucky I found your site.
Thanks 🙂
Hi Arger! Oh, that I’m not sure of. My guess is that you’ll have to update your information with your revenue district office. If you’ve visited it before, they have an Officer of the Day who you can talk to about your TIN or tax-paying issues.
The terms “professional” and “self-employed” are the same actually. But as a registered nurse, are you employed at a particular hospital? Like they pay you salaries and provide benefits? If yes, then you’re still an employee. Professionals run their own businesses and are therefore not under/employed by any particular company. 🙂
Thanks again for commenting and hope you can work out a solution with the BIR. 🙂
Hi Both! You can only have one TIN. That’s for life. You will use that whether you are employed or just practicing, having your own business or both. All income earned, unless subject to final withholding taxes or exempt by special law are subject to income tax so you must declare them in your tax returns, using your TIN.
You can actually count me in when you have inquiries with taxes or accounting 😉 Just visit http://ocalundan.info and contact me.
That’s what I thought too. It is illegal to have more than 1 TIN. THanks for clarifying this! 🙂
Hi orlando, i wish you can lend me some of your time in helping me for my dilema. I’m an engineer with professional license. I recently applied for a tin number at bir ereg website and I was successful in getting the it. Now my problem is I might change my mind of doing my professional job because of a recent job application that i might consider, though I haven’t yet submitted the 1901 and 0605 forms because the company called me just few days after I registered for the tin. Also, can i use the tin for my job application.
bravo!! 🙂 so, how do you start paying, and how do you know how much to pay? haha 🙂
Ahaha thanks Justine! Those details will be covered in a follow-up post, definitely. 😉
Wow, so complicated eh?? It makes me glad I’m employed now hehe
LOL yeah, at least you don’t have to go through the entire process. What’s your job now, if you don’t mind me asking? 🙂
Hey Stef,
Finally, an exact post on freelancers’ taxation! Great job! Now, I guess I just have to figure out how I will register as a professional when I’m registered as an employee before. Probably I can share it to you later, but I guess, I need to set my ground first.
Thank you, thank you, thank you!!!
Hi Jenn and thanks for the comment!
That’s a great idea for a follow-up post to the TFP tax series actually. If you do get to update your tax information from employee to professional, I hope you’ll share the experience/requirements with us! Many of our fellow freelancers will find that very useful. 🙂
Thanks as well!
This is an extremely helpful post! Thank you for writing it Stef!
I hope you can update us with how your taxes were computed. I’m trying to do it myself using the BIR forms and guides but it’s a bit overwhelming. I’d like to know if you’ll be using printouts from your oDesk profile as proof of your earnings and if you’ll be using those invoices you had printed out from now on. And what were you able to include as tax deductibles? Your home office? Your laptop? Your internet and utility bills?
Hi Gestie and thanks! I’m happy to hear that you found this post useful.
I actually wrote a follow-up post on the 3 major types of taxes Pinoy freelancers are required to pay. In line with this I also attached the BIR’s taxation guide for professionals, which contains the formulas and methods of computing for your taxable income. Here’s the link: http://thefreelancepinoy.com/freelancing-tips/3-major-types-of-taxes-for-pinoy-freelancers
Personally, I don’t trust my mathematical skills to correctly compute for my taxable income. I would be a very bad guide/adviser if I’d try to write an article on how I compute for my taxes, really. With that said, I suggest hiring a CPA you trust who can compute for your taxes. It will cost you, but I think it’s a great investment if you want to pay the correct taxes to the BIR. 🙂
hi stef, i inquired in the BIR office here in the city where i live, but they didn’t seem to know what to do with me. i told them i am a freelancer and a previous employee of a certain company. and i want to pay my taxes as a freelancer, thus changing my status since i’m not employed in any company right now. the lady in BIR, told me to go to city hall for a business permit or a PTR??!! hmmm…
Hi Cath,
I’m sorry to hear that your trip to the BIR didn’t work out. This may sound a bit strange, but I encourage you to not call yourself a “freelancer” when talking to a BIR officer.
These people don’t know what freelancing means. They don’t know that the term for “getting a job through the internet” is called freelancing. Just use the term “professional” as this is a more familiar term for the BIR than “freelancer”. I hope this experience won’t discourage you to try again. Just explain what you do (eg. I write, am a virtual assistant, I do design/artwork, etc.) and let them know you’d like to change your status as self-employed/professional.
Hope this helps! 🙂
Hi Cath,
The same thing happened with me. Last year, I went to the BIR office so I can pay for my taxes. When I asked the officers there on how I can register, they weren’t sure how to categorize me. Three BIR officers analyzed and discussed my situation. They told me to register as a business and comply with the DTI and municipality requirements. When they realized it was costly and that it’s a hassle, they said that I don’t need to pay taxes anymore! I had mixed feelings of happiness and frustration. Happy since they we’re the ones who told me that I don’t need to pay (though I know I have to) and frustrated because they weren’t able to help me. I need an ITR so I can apply for a loan.
Anyhow, I’ll visit the BIR office again and give it another try. Hope things will work out fine this time. Good luck to you! 🙂
Hi Ivy,
Thanks for sharing your experience with us. I’m sorry to hear that the BIR you went to did not offer any good advice as to how to proceed. I’m equally surprised that they told you that you don’t have to pay taxes anymore. Oh well, we can’t do much about it since taxes for freelancers isn’t a popular thing with the BIR.
If I’m not mistaken, registering at the DTI is only required if you’re going to operate under a business name and not just your own name. That’s what I chose to do, so I didn’t have to go to the DTI.
hi stef,
Good day to you, same thing happened to me they told me to get a DTI permit like I’m gonna run a business.. well mybe our job freelancing is also our business 😛 but what do you think are the advantages and disadvantages of getting a DTI permit? hope to hear from you ^__^
Hello jonah,
I registered my business under my own name, so I wasn’t required to apply for a DTI permit. If I’m not mistaken, this permit is only required if you’re setting up your business under a business name (e.g. Jonah’s Freelancing Business). From what I heard, there are more requirements and taxes to pay if you choose to do this and apply for a DTI permit. But in terms of identification, you are identified as a registered business if you do choose to go this route.
Hope this helps!
Hi Stef,
How do I get a proof of address? More power on your blog!
Hi Louis,
It would depend if you’re renting your office space or not. If you’re using your home office, any proof that you own your residence is good enough to submit to the BIR. In my case, I just submitted a certificate of occupation drafted by the administration of the condo where I live.
If you rent office space, you may be required to submit an accurate sketch of your physical address. You can ask your assigned RDO for more info. Hope this helps!
Hello Stef!
Thanks a lot for writing at this site very informative. I have a questions though.
I plan 2 open a business, it’s selling services abroad, (self-employed) n register a business name. Clients will pay in dollars n deposit it 2 my Business Account. For example , If I’ll earn 100,000 php /mo equivalent , of course I have 2 pay the Registration, Income Tax, and Business Tax right?
My question are:
Do I have to pay any taxes/fees when I withdraw my income from my Business Account? How much is it?
Which bank do u recommend for opening a small business bank Account?
Thank You
Best regards
Bonita
how can i transfer my tin number record from batangas to makati city because i’m working here at makati ,i get my tin in batangas…because my employer said that i need to transfer my tin record to makati…
tanx carl…
Hello, Carl. Unfortunately, only your RDO will be able to answer questions regarding your TIN number. You can visit their office or use the official BIR website to locate their number, if you wish to call them from home. Hope this helps!
maybe it would be easier for freelancers here in the philippines if they would come together and form sort of a company or foundation wherein freelancers can bring in their projects. The foundation can simply charge a small percentage, around 1-5%, in turn they would handle the taxes, etc. My idea is that every time a freelancer brings in a project, the freelancer is sort of hired by the foundation on a contractual basis. I think this would eliminate the need for individual registration and the foundation can hire accountants, administrative staff that would be able to handle taxes and other issues. just thinking…
That’s an interesting idea, lein. I’m not quite sure what you mean by “bringing in projects” and being hired by the foundation, but I do see an organization or company that can handle the financial and administrative aspects of a freelancer’s business. It would definitely set some ground for freelancing to blossom in the Philippines.
This post of yours, was really heaven sent.. for me that is.. Thanks so much.
I do have one question though.. As a freelance i want to present myself to my client as a company not just by my own name.. Should i register at DTI for this or can i just Use a name i came up with.. Thanks again.
Hello, crosse! If I’m not mistaken, you’ll have to visit the DTI to register a business name. But if you’d like to transact under your name alone, a visit to the BIR is enough. 🙂
A follow up question .. i was just curious what will the receipt look having your own name on it… will it look like this on the header of the receipt that we’ll be issuing;
JUAN DELA CRUZ
address: no. XX XXXX st., Calamba Laguna
Tel: 888-8888 Email: juandelacruz@gmail.com
….
The receipt will have the following:
Your registered business name
Address where your office is located
Your TIN Number.
wow thanks for the quick response… i’m planning on opening a small business.. but im still deciding on whether to use my own name or register my own business name.. anyway, so if i use my own name instead of registering for a business name. I’ll have my receipts printed showing my own name on top?
Hi stef, Am I the one who will pay for the printer’s registration fee?, and the job order for printing of invoices, Who will provide this?
Thanks
Hello Diane! If I’m not mistaken, the printer of your choice should already be registered before printing your invoices. And as for the job order, you’ll be paying for that. Hope this helps!
hi stef! this was really helpful for a lost taxpayer-wanna-be like me 🙂 so thank you! anyway, i just wanna ask about the printing. I have a friend who prints Rx pads, etc. Can they also print my invoices/receipts? Does BIR require a format or something? And do i get it right that I have to present to them the invoices (the printed ones) before i could get the COR?
Thanks stef and more power to you!
@Stef First, thanks for this guide. My concern is I used to be employed and I am wondering if the same process would apply to me.
@Crosse I want to present myself to my clients as a company too. I think it’s more professional as I am planning to keep my freelance status for a long time. I’d be the only one doing all the works though. But what if registering yourself as a business would mean more taxes imposed? It’s not gonna be worth it especially if I am on my own. Hope you’d let us know, through here, how your application goes. Thanks.
No wonder very few freelancers from Odesk, Elance, etc. pay taxes. They make it extremely complicated and a pain in the butt. Are they retarded? Are they trying to discourage people from paying taxes?
What is the tax rate for online freelancers anyway?
It’s just as well. I’m sure the money is used much more wisely by freelancers than it would be by the Philippine government. At least half of tax revenue gets siphoned off by corrupt politicians. A quarter goes to supporting idiotic bureaucracies like the BIR which serve only to give people a hard time and occupy otherwise productive individuals. I’d be shocked if even 25% of tax revenue gets spent productively.
Hi Stef,
Need to clarify some things, Yesterday I just went to RDO Pasig near SSS to file 1905. I’m now on preparation for 1901 as self-employed professionals.
“The BIR may ask if you have a license, so just inform them that your line of work doesn’t require one to operate.”
If this is the case (quote above) neither will I need to ask for a certification from off shore client or an odesk printout just a proof I’m doing professional service?
====+
Should I also required to buy and/or register the following:
Books: (1) ledger, (2) columnar books, and (1) linear journal at P140
Invoices, depending on how much your printer charges
Your printer’s registration fee?
thanks
1. In my case, I told the BIR officer that my work does not require a license from me. They didn’t ask any more questions after that. The term “professional” in BIR language has always referred to engineers, doctors, lawyers, etc. who are given licenses before they can work.
2. All the books are required. If your choice of printer hasn’t yet registered with the BIR for printing of invoices, he/she should do so immediately for you to process all of your requirements. If he/she has already registered, you only need to present the receipt to the BIR.
I hope this helps!
Hi,
Very frustrating day, I went to RDO 044 to file 1901. First, they had me on registration section then the staff asked someone about my queries I told them that my services doesn’t require any license and I end up to the officer of the day. They require me to have PTR (Professional Tax Receipt) from LGU. Later this day I found out from LGU that they will not issue PTR unless I have a PRC license. sigh!
I am eager to file my BIR as professional services. Any advice what should I do? May I know what Revenue District Office those who succeeds in filing their BIR without any hassle?
Hi rbien,
Oh wow, I wonder why registering as a tax-payer is difficult in other RDOs. Mine’s RDO 33 and I never had a problem with them in terms of my identification and where I fall under as a tax-payer. Could you describe how you went through the process? How did you explain to the BIR about your profession?
I simply explain to them I’m doing professional services over the internet such as internet marketing, virtual assistant and some web design. These services does not require any license to perform this function. I talked with three different people.First on the counter at registration then she advised me to talk to a lady inside the booth in which I explained all in details.Then after that, they had me to the officer of the day. The person on the ONETT, fill up some data on my 1901 form.
She did input market research PSIC code 7413, check tax types.When I clarify what requirements then she asked again the person inside and instructed to have PTR (Professional Tax receipit).
I should have known what PTR is, if then I will insist that this is not applicable to me as this only entails those who have PRC license.
Well, I will call them early today and discuss this matter also, I will cite that I have known some RDO who did not require any PTC or mayor’s permit to accept filing of registration.
Anyway, wish me luck!
Still struggling. They asked me to have Occupational Tax Receipt (OTR), but my LGU did not give me because of nature of job. They advice me to call tomorrow.
I hope they would not require me to have business permit.
If you plan on operating under an official business name, most likely they will require you to get a business permit from the DTI. As for the OTR, I was never asked to acquire that type of document when I registered. It’s not required at all. If you get to speak with another BIR officer of the day, you can use my case as an example if that can help simplify the process.
Hi Stef,
I have a question, do you still fill up your invoices/receipts everytime you bill a client/a client pays you, even if it’s done in $?
Hi Justine! The invoices/receipts are for clients based in the Philippines and who pay you in pesos. For clients who pay in dollars, you don’t have to issue them invoices.
Hi Stef, so if you don’t issue receipts for clients who pay in dollars then you cannot log it in the ledger and declare it as income right?
Hi danny,
You still have to log it as income, of course. The only exemption dollar earners have is from the VAT. As for percentage tax I still have to clarify with my accountant about that, but what’s sure is that whether you are a dollar or peso earning freelancer, all income must be declared. 🙂
Hi Stef, thanks for this helpful info. Do you have an online reference stating that we don’t need to issue invoices for offshore clients? One of my clients is asking for an invoice specifically from my limited company. What does a ‘limited company’ mean? Do I need to register under a business/company name? Your response is much appreciated.
Hi Jacky, it’s up to you to decide if you would like to create and register as a company. There are specific requirements that go with it. As for invoices, the BIR requires all self-employed individuals and businesses to issue receipts to clients and customers. In your case, if your client is located abroad, you can issue a digital invoice and issue a physical copy of the receipt once you receive payment. For the latter, just keep your copy of the receipt and the BIR’s copy in the stub.
Hi Stef, this is very informative because I need a TIN number for my online writing job. The thing is I went to the link for online TIN application and filled the basic taxpayer information section. The email that is supposed to be sent to me containing my TIN hasn’t arrived yet. Does it really take a long time for the email to arrive? Also, because the email is taking too long, I filled the section again and this time with a different email add. And I am worried about it. I called the trunk line and they had me call five different people and I went no where with my inquiry.
Hello Vida, thanks for visiting TFP! I’m not really sure about that because my accountant was the one in charge of securing my TIN number for me. Have you tried visiting your RDO to apply for the TIN personally?
Not yet because I really don’t have time to go there. I think I will just have to wait for the email. Thank you again for this helpful site. 🙂
Hi Stef, i would like to ask you, what are the common pattern shown on the Columnar book. as a repair shop services only. in Daily.
Thank you.:P
Hi Stef! Do you have to do the same procedure every year for the same business or annual registration fee na lang? Thanks! 🙂
Hi Stef,
Thanks for this post.
My concern is that I am currently employed in a company and at the same time doing blogging. I am currently earning 6 figures from my blogs and I wanted to pay my taxes.
Do I have to register myself as a “professional” with BIR?
Hi Fred,
Are you currently employed in a Philippine-based company, or a company situated abroad? If it’s the former, I’m guessing you’d have to declare yourself as an employee. If it’s the latter, you can register yourself as a “self-employed professional” since you are servicing clients abroad.
Hello Stef,
Thank you for this post, I have been searching the net for infos on how to get these documents from BIR. However, I have one question. I already have a TIN because I have been employed before and now I do freelance work. Should I still fill out and apply for these forms? Any advice? I just want to pay the taxes that are due to me that’s all.
Hi, I am looking for help regarding this matter. I am a freelance since 2008 when i left my previous company in Ortigas as an Agent, May 2008 I worked as a Home Based Fundraiser ( call center agent) USA based employer, since then i stopped all my contributions like SSS, Pagibig, Philhealth, Tax etc., Then I am currently employed to another US based company which I am now a virtual assistant since September 2011. This company is a well-established and I am looking forward to work with them for a long period of time, and now my problem is I really wanted to get a house loan for pagibig and wanted to start again my contributions in SSS and Philhealth since i am getting married soon. I hope you guys can give me an advise where should i start.
Very nice! this article was so informative.. thanks for posting this Stef (-:
Hi, I’d like to ask if 409 salary per day is taxable..
were earning like 9,000 a month for basic salary and the rest were added up as incentives.. (409/day is below minimum right? is it really necessary for them to deduct taxes if were just earning this amount?) thanks 😉
Hi Stef,
I am a business owner in Philippines that would like to register my company. I am definitely at lost with the procedures at the BIR ofc. Regardless, would you be kind enough to assist me (I need a guideline on how to secure a Certificate of Registration for my business)?
thanks!
G
Hi Stef,
This post was very informative. I have a question though. You previously said that the terms “professional” and “self-employed” are the same. Was this according to the BIR? Because from my understanding is that the term professional (in the legal sense) only applies to those professions regulated by the Professional Regulation Commission (PRC) e.g. engineers, architects, physicians, etc. So the term might not be apt for say an individual retailer or maybe a freelance writer. And professionals are required to get a Professional Tax Receipt (PTR) – where one will need to present his/her PRC ID details. If one registers himself as a professional in the BIR, wouldn’t he be required to present his PTR and other profession-related details?
Thanks!
Hi, Kris.
You could say that the best “category” for me would be “self-employed,” but I did approach the BIR and told them that I’m registering as a professional and that my line of work does not require me to operate under a license. When I told the BIR that my work as a copywriter doesn’t require one, they noted it down and registered me as such. I wasn’t required to acquire a PTR nor was I told to present any extra documents beside what I outlined in the post.
So in short, it’s just a matter of letting the BIR know about the nature of your work and how you would be paying your taxes.
“So in short, it’s just a matter of letting the BIR know about the nature of your work and how you would be paying your taxes.”
– if they do take the time to actually understand what your nature of work is. maybe it could depend on the agent handling one’s account’s ability to discern, or on how one presents his/her nature of work when asked by the BIR.
now, this probably explains why some outfits get away with their practice despite not having the PRC license or at least the educational background for it. This happens a lot in consultancy work where some can disguise illegal practice through vagueness when in fact there are laws that regulate such services.
The BIR does conduct yearly personal checks to see if you’re still complying with their taxation regulations, such as renewing your registration as a tax payer or filing your books of account. They’d also check your documents to see if you are operating legally. I can’t think of a way how one could work his or her way around that.
It’s not on the taxation, per se. It’s on the registration where i think they lack control. Like for an example, say I am an architect but I do not have the PRC license for it. I can go to BIR and register myself as a professional “consultant” or as a professional “artist/designer” and leave out the specifics (will not register my practice as an architect so they will not ask for a PRC ID, PTR, etc) when in fact after i get my papers done I would be getting projects that should actually be the works of an architect according to RA9266 (architecture act). Now i can name my projects vaguely like “design of ____ project” and file the right taxes for it. will the BIR check the details of those projects/services actually rendered and cross-reference with all existing professional codes to see if i was not crossing their constituted practices? My guess is no.
“The BIR does conduct yearly personal checks to see if you’re still complying with their taxation regulations, such as renewing your registration as a tax payer or filing your books of account. They’d also check your documents to see if you are operating legally. I can’t think of a way how one could work his or her way around that.”
– so even if BIR does these yearly checks and one complies with their taxation regulations, still, the question here is the actual practice. i’m sure they will be checking if you file your taxes right but I doubt that they do check if what you declare you are doing does not violate the laws of each and all PRC regulated professions. like i said in the previous posts, it could depend on how one presents his/her line of work in the BIR and the agent’s vigilance and due diligence to check with the professional codes.
Hi Kris and thanks for sharing your thoughts. You do have points that tax payers in general should take into consideration.
Taking these into consideration, I think what matters now is the individual’s self-awareness of his or her responsibilities with regards to BIR registration and taxation. If s/he decides to do things under the table due to the fact that the BIR as a government agency may be incapable of keeping track of the nature of the business activities going on in his or her shop, then there’s nothing we can do. But I do believe that from the individual’s viewpoint, there is always the choice to do what is right and to take it onto ourselves to clarify and declare the true nature of the business and his or her role as head and as tax payer. If there is nothing wrong going on behind the scenes, we do not have any reason to hide or worry.
Oh, I forgot to add.
We as citizens can also make a difference in terms of our registration process: to help the BIR by giving them advice/feedback/suggestions, solicited or unsolicited, to let them know what we as tax payers expect from them as handlers of our money. By taking that first step to making a difference, no matter how small, that’s already a step towards improvement for everyone’s betterment.
Agreed that citizens can always do their part. It’s just the institutional structure that is hard to influence at least. I’ve been doing consultancy work for a certain government agency for some time now and I could only shake my head everytime I see projects awarded to unqualified practitioners. It’s hard to break this structure even at times when it is the government that is on the client-side of transactions.
Thanks Stef!
Kris,
I recently registered as a professional self-employed taxpayer. I was required to submit a professional tax receipt (PTR) along with my BIR registration form. I was issued by the City of Cagayan de Oro a PTR as a data entry professional — the City even requires Guest Relations Officers (GROs) to have PTRs in order to work. So PTRs are not limited to PRC-licensed professionals.
It’s interesting that other RDOs require self-employed professionals PTRs. It might be the case if I decide to register as a tax payer at Cagayan de Oro. They’ve probably modified their policies.
Hi Stef,
Today i went to the BIR to ask what is needed to declare my taxes. I was recently employed in a local company and wanted to go freelance instead. The Officer of the Day, however, told me that I first had to get a Mayor’s permit and register at City Hall. I explained to them that I was NOT starting a business and had no intention of making a business name but that I merely wanted to pay my taxes for my services as an IT consultant. They said that all “professionals” are a business in their own right and thus I need to register with city hall. When I still persisted that I didn’t have a physical office, they still argued that regardless, I was still in need of a DTI permit. How/Why is this so?
Ruthie,
I’m not sure and I can’t really tell why the rules are different with the BIR of your district. For the BIR at Intramuros (RDO 33), I simply informed them that I’m a freelance writer/professional wanting to register as a self-employed tax payer. This is the process I went through and up to this day I’m paying my monthly VAT and ITR without any problems with my tax payer status.
DTI permits are required for businesses registering under a business name (e.g. Ruthie’s Shop). If you’re registering under your name alone, you shouldn’t have to register for one.
Thanks Stef. I really have no idea either why they keep insisting it that way. But many have said that RDO 40 is “maarte” (for lack of a better term) in their requirements.
Hello Stef,
I just want to ask where BIR office I can register to? I’m residing in Muntinlupa right now.
Is there more than one BIR office within Metro Manila I can go to register?
Thank you.
Hi Stef. I have to say thank you so much for the post! But due to the nature of my job, I can’t help but stay confused on my status. I’m currently working for a company as a consultant (based on the contract). So, I issue the company every month an invoice. With that, I can’t really settle where to place myself on paying taxes. I mean am I considered self-employed? I don’t really know where to categorize myself in order to pay for these taxes..
Hi Stef,
What is the specific information that is written in the Ledger Notebook, Journal Notebook and two 14 columnar notebook? If possible, could you please breakdown the specific information that is written in these 4 notebooks? Thank you.
Hi po! 🙂
I am just curious about the printer. Do we really need to get a printer kahit na my job is just online? I just applied for a TIN because I need it for some document applications! 🙁
Thanks po.
Hello Marie,
Yes, you need to have a printer for your printed receipts as this (the receipts) is a requirement by the BIR. What I do is I issue receipts whenever I receive payments for work done and just keep the yellow copies for the BIR’s review.
Hope this helps!
hi stef,
i just read ur blog,thanks i got some info from you.im new in manila and im from cebu ,im confused how to get tin ,especially i really dont have work,and i wanted to get one.and i dont have employer either,.
i will try to go to bir and will follow ur tips.thanks,il let u know of whats the result after.
Thanks for this post, Stef! Very helpful. I was wondering if you have good accountants to refer to, for freelancers like me who will get lost in the process and want help. 🙂
Hi Czarina,
Im an accountant, if you dont mind, i guess I can offer some help if you want to.
Hi Steph,
I have a question is form 605 the same as form 0605? I have an existing tin from when I was an employee so I could not access the efps of BIR. When I googled this form, form 0605 came up. I just didn’t know if they were the same? Thank you for your time.
Super helpful article.
Hi Kim,
BIR Form 0605 is the official payment form for paying the registration fee. If you have an existing TIN when you were working, you have to update your registration with the BIR RDO having jurisdiction over the location of your residence or business location. When updating your registration you will need to use BIR Form 1901 for self-employed individuals. You will be using your existing TIN when you register as a self-employed individual.
If you need further advice, let me know thru trustedfinancialadvisor@hotmail.ph.
John
hi… im badly confused about my status..
im working from home.. and my work is basically online .. we deal w/ our boss online..
techically.. there is no company that would represent me as an employee.. we call ourselves as homebased employee..
our client/boss will not provide any COE nor any proof that we work under them..
can i still register my self as a SELF EMPLOYED? how would i categorize it?
its like sort of online shopping.. and we handle the customer service…
do i still need these requirements?
Books: (1) ledger, (2) columnar books, and (1) linear journal at P140
(1) Documentary stamp at P15
Invoices, depending on how much your printer charges
Your printer’s registration fee, TIN number, and the job order for printing of invoices.
Application for a TIN card (free)
i presume that those are for business type registration?
please respond.. badly needed. 🙁
Thanks for all these info. I’m working online as a sideline and when I attempted to apply to the BIR office here Paranaque – trust me, nag-mukha akong tanga or weird. Hindi alam nung taga-BIR kung ano website at online business at parang ako pa ang lumabas na wirdo dahil gusto ko mag-bayad ng tax. So, disappointing that some personnel in this department are not capable of coping up to the current business trends or other ways of earning money.
Another big hassle, is the idea of transferring your BIR registration. If you have a regular work in Pasig and you live in Paranaque. They will ask you to transfer your RDO which is super inconvenience. I don’t understand this procedure and why they make thing complicated for the tax payers.
During my BIR tax briefing/seminar for newly registered business/professional taxpayers, we we’re told about a new BIR policy — all unused invoices/receipts printed before the year 2013 shall expire on June 30, 2013. Those printed starting this year shall expire in 5 years from the date BIR stamps the invoice/receipt booklets.
Also, invoices are issued for goods while official receipts are for services.
Thanks for the heads-up!
Hi! I have a huge problem. A couple months ago I needed a TIN asap so I tried to register online. When my connection was lost I had a friend do it for me, but she accidentally registered me to self- employed since during that time I wasn’t employed anywhere else. I got the tin then but didn’t complete the registration since there were requirements for business owners that i didn’t have. Now I am getting a real job and I don’t know how to change my employment status. I know that it’s a crime to have two TIN’s, so what do I have to do? Is there anyway to change my status from self employed to employed?
I would suggest updating your tax payer status at your assigned RDO. You can also turn to the BIR officer of the day for more information. They have all the instructions you need to get through the process.
Were you not required to register your business name in DTI? I was required by my accountant to do so before working on BIR. Why’s that? I also do freelance.
yas, I believe the DTI is only required for business owners who will operate under a business name. I registered under my own name, and so could operate without the DTI permit.
Very informative post! Finally, I found something I think I could follow. I’ve been searching the Net for info and thus far this post is the only one I found that seem applicable to my situation. Stef, if I may ask, do you know how large is the percentage tax for dollar earnings? Thanks in advance!
Olive,
Your dollar earnings would be converted into PHP when calculating your taxes, and so 3% service tax will be deducted from the resulting amount.
Hi Stef,
Very very informative post. I recently changed my status from employed to self employed since I just started working as a consultant (which by the way, won’t be long lived. My contract as a consultant is just for 6 months and I plan to be employed again after this gig). Since I want to pay my correct taxes, I painstakingly went through all these “hassles” of changing my status, securing my COR, registering books, etc…even if this stint is for just a short time. I also thought that if I did not go through the proper procedure, makikita naman din ng BIR na I’m not paying my taxes kasi may winithheld na sakin na taxes na 3% and 10%. So I thought that I might as well go through the proper procedure kahit sobrang hassle siya.
Anyway, my question is, do you have a general idea of how much the printing costs for the official receipts will be? I understand the minimum is 10 booklets, but I told the BIR lady na sayang lang if get 10 booklets since I expect to be employed early next year. May binanggit siyang pwede daw 5, depende kung papayag yung printer.
How would I know if the printing service is BIR accredited? How much did you pay for yours?
Hi Mrs. Karamazov, I can answer this. 🙂
I’m a designer so I work with printers. I simply chose the one I rely on the most. In my case, I ordered 5 booklets each of ORs and Service Invoices. I paid over 2K for each order. Mine was printed in one color (black) half-letter size and 3-ply (original + 2 carbonless copies), numbered, including perforations so you can tear them out.
I have no doubt that you can get a better deal. Note that prices for printing vary according to size and the number of colors, sheets, and booklets. 10 booklets will cost less per unit, but I ordered 5 (the barest minimum) for my purposes.
Re. printers, you will have to ask your printer of choice if they are BIR accredited and if they can design an OR (unless you have your own design) for you. Most printers are pretty accommodating; you just need to talk to their accounts or sales staff. My tip is to build a relationship with the printer (you never know when you need them for other things) and be a little makulit if you have to. ;p
By the way, you will have to present the OR and Invoice designs (along with all the other required documents) to the BIR. Medyo maarte din sila, so be prepared in case they ask you to revise it, especially if you designed it yourself. I had a slight problem because they didn’t understand that my name and title were part of the logo. I had to explain things to them but ended up revising it just a tiny bit just to make them happy. It’s very minor so it’s not obvious.
Hope this helps. 🙂
I have a question regarding form 1901 (Application for Registration for Self-Employed and Mixed Income Individuals, Estates/Trusts).
What would happen if someone has been issued TIN but unable to pay what’s indicated in 1901 and had to move to another area, which would mean changing RDO???
Hi Stef,
First of all, I just wanted to say that your site has been a tremendous help. Thanks so much!
I had to delurk because I want to ask re. the eFPS. Have you been able to enroll? If yes, what is your experience of using eFPS? I would have wanted to link it to my bank so I can just file online and have the amount debited from my account.
I was about to enroll since BIR claims that you can file forms that self-employed individuals also file, but at the same time it doesn’t sound like self-employed individuals are not included in the “current user coverage” list. 🙁 It seems unfair that only taxpayers who can pay bigger amounts can benefit from this eFPS.
Thanks in advance. 🙂
Hello, Anne, and thank you!
The truth is that I never got to use the eFPS service because 1) the BIR officer in charge was never available to assist me with my account, and 2) the BIR officer who handled my taxation seminar advised me not to use it. I’m guessing it’s because he believes that handing your files over to the BIR personally reduces the risk of problems and hassles, but again, I never got to try the service to prove if he was right or wrong.
I wouldn’t say that tax payers paying bigger amounts can benefit from it. I was given the opportunity to use the service in spite of my income, though I never got to use it. Have you tried contacting the BIR about this?
Hi, I have a question. Which should go first? Registration of DTI Certificate or registration in BIR? And about the printing, can I print them here in my house or any com. shop here? Is there a size for the invoices? Is the payment for this registration still the same even though I’m already employed but don’t have license since my work doesn’t require that one? I also have my TIN since I was in college. Is it required to get a new TIN ID again? What about these: “printer’s requirements and the job order”, what does it mean? Thanks and apologies if I have a lot of questions. I just don’t know and I’m confused about the registration. 🙂 Btw, this is really a helpful post!
1. You’ll have to ask the BIR officer of the day, but in my case I only had to visit the BIR.
2. Have them printed with a BIR-registered printer. You’ll need their registration when applying. They can take care of the format for your invoices.
3. You can always state that you do not need a license to operate. Payment for registration is P500 a year.
4. Simply update using BIR form 1905.
Useful and good information. Good for us as Freelancers. Thank you. Ma’am Stef
Thank you arthur! 🙂
Hi Stef!
I really found your post very informative and helpful. I just have some questions. Is a person considered a professional/self-employed if he is paid by a company but is not considered an employee of that company; like that he is treated as an Independent Contractor?
Thank you!
Thanks Kat! I say “self-employed” since s/he does not avail of employee benefits, is not tied to the company by contract, and s/he can work outside of the office (just to name a few examples).
Dear Stef,
Good day to you. First of all, thank you very much on blogs it’s very helpful. These are my questions,
1. if you’re renting the store, the lease of contract is it needed by BIR?
2. if YES, If the owner of the house you rented not capable to release the LEASE OF CONTRACT, what is another way?
Hello danilo,
1. I believe so, but you can always seek advice from the BIR officer of the day to confirm.
2. What I did for my situation is to ask the admin of our condo to write and print out a letter stating that I am a resident and the purpose for the letter, which is for BIR purposes. Maybe the owner of the house can do the same. Again, it’s best to contact the BIR for confirmation.
Thanks!
Will the store building owner issue you rent payment receipts and/or rent tax withholding certificates? If not, you’ll have no proof that you rent payments are expenses come income tax return filling season.
Great post! And thanks for posting the requirements.
I’d like to know whether you can help me with this scenario.
I’m a home baker who sells cakes/cupcakes online. I get my client’s online through sulit and FB. Hindi naman malaki ang kita ko monthly, in fact parang minimum wage lang ang gross income ko but like everyone else here, I’d like to register because ITR is almost always requried for banking purposes.
1. I was previously employed with a BPO in Makati. How do I change my tax status?
2. Being a home-baker means I am self-employed correct? So do I just follow what you did?
3. Kelangan pa ba ng DTI? Some friends said I need to. I’m a little bit apprehensive to register as a business kasi baka hindi ako ma-grant ng Sanitary & Fire Permit. Don’t get me wrong, my products are sanitarily-prepared pero since I am baking at home baka sabihin ng officers na yung sink ko kelangan “commercial size”, yung cakes ko kelangan may sariling “chiller” hindi pwede kasama ng mga regular food namin sa bahay… things like that.
Thanks
I have a small Internet cafe.
How do I record down the daily cash transactions into the Cash Receipts Book (12 Columnar Book already stamp by BIR). How is the format layout?
Do I have to record down every sale (P15/P10) for every PC rented? or just the summary of the day income?
Pls help, as I am new in this BIR Tax recording?
Salamat
Reeko,
I’m afraid I may not be the best person to advise you since you are running a traditional business establishment. You can always contact the BIR to address your concerns.
Hello! Thanks for this post. I just want to ask, you mentioned “Check which RDO (revenue district office) covers the location of your office.” What does the “office” exactly mean? I’m a Web Designer/Developer and I sometime have multiple clients from different locations. I’m kind of confused hehe. Thanks in advance for your answer! 🙂
Rizza, thanks for the question! The BIR is pretty traditional in terms of how they identify the different tax payers. Since we are “self-employed” and we run a “business,” the location where you work is your office. So if you work from home, your house would be your “office” and where the BIR will go for tax mapping.
Hope this helps!
Another question. 🙂 I have a day job kasi, and I do these freelance projects of mine simultaneously. What will happen if I apply for this and my TIN is changed from “employed” to “self-employed”?
I mean, kapag nag-apply ng professional TIN, it means mababago yung classification diba? Eh I’m still employed and I’m doing this freelance job at the same time. I wonder what my classification will be hehe. Thanks in advance!
Sa BIR pwede ka registered employed at self-employed at the same time. Sa SSS lang yun hindi pwede. 🙂
Sa PhilHealth din hindi pwede.
At Pag-IBIG hindi rin.
The way I understand the system is that you can’t take on two roles nor two TIN accounts at the same time. The best option would be to stick to your employee status and update once you’ve resigned and have made the transition to freelance full-time. That way, your records at the BIR won’t be confusing and held suspicious.
Hi Stef,
Thank you for sharing this. I would just like to find out how much you paid for the entire registration process (including the printing, etc).
Thanks!
RUTH
If including the expense for the printing, I’d say around ~P2700.
Thanks, Stef! This post is really a big help for us freelancers. 🙂
You’re welcome Ruth! 🙂
hi Stef, thanks a lot for this wonderful tips of yours,
No problem, jen!
Hello Stef, I have a question: Are commissions subject to the percentage tax, assuming it hasn’t reached the VAT-able amount? Thanks a lot in advance.
Are you the person receiving commissions? If yes, I believe it is also a source of income for you, and therefore should be included in the computation for percentage tax and your ITR.
Of course, you can contact a BIR officer-of-the-day to verify.
Thank you very much for this post. Very informative and helpful. 🙂
Here’s my experience when I attempted to register with the BIR. Since I’m from Fairview, I’m under BIR’s RDO 28 – Novaliches at West Ave, Q.C.
1) There is no dedicated helpdesk there for registrations, and thus I was simply told to ask any one of the front counters (ergo, makisingit na lang daw ako). Rather than spectacularly parting the monstrous queues ala Moses and the Red Sea, I decided to just ask for a queue number for whichever counter they can get me (Yes, I had to ask, they didn’t even volunteer giving me any when I first inquired).
2) The moment I got to the counter was relatively more pleasant, although the officer at the moment was multitasking as well with a previous client. I then asked for the requirements for registering as a self-employed professional, explaining that I’m registering not as a business but as an individual, and that I’m a practicing a profession not requiring a license.
According to the officer though, since I’m not a PRC professional and I’m not affiliated with any local company whatsoever, I simply had no choice but to register with the DTI, and therefore get a Mayor’s Business Permit, and therefore get a Location Clearance, Sanitary and Fire Inspection permit, etc., etc., etc. About the BIR registration itself, the officer didn’t really elaborate on the steps and the required forms I had to submit (take note he was multitasking with another client), implying I might as well just have to figure out and help myself with it.
So there you go, for those online freelancers out there who are from the Novaliches/Fairview area and considering registering with the BIR. I guess I’ll just have to try again if ever I move in the future to a new residence outside the coverage of my present RDO. I might even give a shot registering under my old residence in Pasay (where I still happen to be a registered voter of anyway). For now, I guess I might as well enjoy my tax-evading life 🙂
The problem with online freelancers trying to register as professionals is that we don’t have any formal organization or association that can legally vouche for the existence and legality of our profession. Non-PRC professionals such as artists, athletes, models, etc. have their recording companies or particular associations that vouche for their “exemption of PTR” in lieu of the PRC license, that’s what the “affiliation with a local company” that the BIR officer told you about.
Not all city/municipality units would give a PTR or Mayor’s Permit without a PRC license, and not all RDOs are willing to register online freelancers without a PTR by taking our words for it. In light of this, I’m hoping that online freelancers in the country would be more proactive and band together, perhaps form our own formal national association, to show the government that we are here and we are willing to do our tax obligations as Philippine citizens.
Thank you so much for this info! Very helpful indeed. 🙂
Thanks Bianca! 🙂
Hi, I’m new in freelancing business. My client is from abroad. I already have my invoice and receipts registered. My question is do i need to scan the invoice and receipt for signature? Is signature required in receipts and invoices for filing/bookkeeping? Looking forward for your response. Thank you
In my case, I simply wrote the details of the transaction in my invoice and just kept the BIR copy in the stub. You can always ask the BIR for clarification.
Thanks for this very informative post Stef 🙂 Best Regards! I will be starting my registration this coming Monday.
You’re very welcome wrence! Good luck. 🙂
Hi stef, Thank you for the useful post. I think Some Pinoy freelance have already a TIN. but your post so awaking for us to have a TIN. How about for those freelance that have not enough money to pay.
Thanks. It is expected for freelancers to have enough money in the bank to start a business, even though it’s online.
Hello Stef,
I have been doing online work for more than 2 years now. If I follow the steps above, do I need to declare that I have worked online for more than 2 years?
Thanks,
Chia
Hi Chia,
No you don’t have to declare that you’ve been working for the past two years. Just approach the BIR as someone who would like to start fresh with her business.
Hello Stef,
I have been into tutorial services an I decided to put upmy own center. Ive got my DTI, Brgy & Mayor’s permitm My question is..my accountant asked for 4,ooo for filing of book of accounts, 2k for receipt (10booklets)..and another 3k for the fees to be paid at BIR. Is it rightful? to come up with almost 10k just registering at BIR?
Thanks,
Chin
Chin, it too much to ask just for assistance with registering at the BIR. Do clarify things with your accountant; you can use my experience as reference.
Hi Stef,
Thanks for this post. It was helpful. I want to ask though, I just started work last month and just found out last week that I am considered as a independent consultant of the company.
How should I go about in registering? Should I just update my tax status from regular employee to self-employed professional? And is there a need to declare that work just started last month? Will it be a flag for late update of tax status?
Thank you.
Hello, aside from paying tax in BIR, as freelancers (BTW, I am a freelance writer/translator), do we need to pay for pag-ibig, gsis, sss, philhealth, etc? And is paying BIR tax the only thing mandated by law for us freelancers to pay?
Hi Stef, is it necessary to register in person or can I send a representative to go through all the steps?
It’s best to register in person, but I believe you can send your assigned accountant to attend the seminar required for all tax payers.
Hi Steff,
Good afternoon.
What are the requirements in correcting the status from professional to local employed?
Mon, not sure what you mean by “correcting the status from professional to local employed.” Could you explain further?
hi stef,
thank you for your post. i recently quit my regular job to write full-time. i self-pub ebooks via amazon and i get paid royalties every month net of the 30% US withholding tax. i want to be tax compliant and i do plan to change my taxpayer classification into self-employed. do i need to register myself as a vat-registered individual or can i just do non-vat since my earnings do not exceed P1.9M. appreciate your thoughts on this. cheers.
Hi Ms. Stef,
I just want to ask. What exactly did you tell the BIR?
You are freelance doing this (job)?
*freelancer I mean
Nope, I told them that I’m applying as a ‘self-employed’ individual/business.
Hi, I have a question.
I am a freelancer and I have registered online (via the BIR eReg website) to get a TIN. I have successfully completed the online registration process, got my TIN, and the confirmation e-mail says that I may proceed with the registration fee payment at my RDO.
Will I incur a penalty if I did not pay this registration fee? I am not a business owner. I am a writer earning online through PayPal.
Carlo,
I’m not exactly sure since I immediately paid for the TIN number the moment I visited the BIR. It’s either you will pay a penalty, or you wouldn’t be considered an official tax payer by the BIR.
Hello! What an informative post! thanks! 🙂
I wanted to ask an accountant but unfortunately, I didnt know anyone 🙁 Nobody is on the same situation as mine, so I cant find the answer. 🙁
This is my situation po. I will be applying for a tourist visa in Korea, one of the requirements is an ITR,
Im an online English teacher in the Phil. [my first job] Im not an employee, just a service provider of the company, so they only provide form 2307. So I researched over the internet about all the filing process and found out that I have to file my Quarterly ITR, fill up form 1701 in triplicate and attached form 2307. AM I IN THE RIGHT TRACK? and Im worrying now because the deadline of the 3rd quarter filing is on NOV 15 this yr [This Fri!]
My query is: Am I still eligible for the 3rd quarter filing even though I didn’t file for my 1st and 2nd quarter? If yes, will I have penalties for none filing? [by the way] My monthly pay for this year doesn’t exceed 10k, except for Sept. [part of the 3rd quarter] – See more at: http://www.mommyunwired.com/2013/04/how-to-file-your-income-tax-return-in.html#sthash.EFn5RL6w.dpuf
These steps no longer apply to most BIR offices especially Makati. I’ve tried and failed. First, they forced me to register it as business then deny it after I paid all the fees.
The reason? I only lease a condo and the owner refused to provide me a copy of the title. I went through the whole process from brgy clearance to DTI to occupancy permit. After they required me to pay insurance, they told me they can’t give me the permit I need to register to BIR.
I spent nearly 10k to get at this point only to get shut down. That’s what I get from trying to be a law abiding citizen.
Kindly research and update your post as this no longer works. Unless you know someone from the inside, that is.
Hi Ms. Stef, Thank you for the great post!
I wanted to ask about the OTR, earlier we went to Manila City Hall and said they are not issuing otr and they don’t know about it? We’re kind of dissapointed and even the baranggay is closed until december 1. Hope you can suggest an alternative
May, I wasn’t required to get an OTR when I registered. You can always ask the BIR officer-of-the-day for the full requirements to register as a self-employed tax payer.
Hello! I have trouble accomplishing bir’s online registration form because I’m not accredited/registered with bcda, bmbe, boi or peza. I can’t move on to the next page because it says there that I’m required to answer that part. How do I do this? Please help
Hi, is this in relation to registering for a TIN? Could you provide a screenshot of the problem? Thanks.
Hi again! Thanks for responding to my earlier question. I’m happy to report that I’m now a registered professional tax payer. I decided to just skip the online tin registration, head over to my designated RDO and just accomplish everything there. I didn’t expect it to go very smoothly, but it did! I was able to finish in one day. Your post has really helped me prepare for the process, thank you very much!
Hi Stef,
I’ve been reading a lot of queries about BIR registration and other related tax compliance matters. In order to clarify a lot of these tax matters, I can offer a tax clinic that focuses on freelancers and self-employed individuals. I’m a tax adviser and an advocate of financial literacy for Filipinos. I have 15 years experience in taxation and currently employed as an executive in a multinational construction company. My offer is for FREE and “no strings attached”. Think of it as a Christmas gift to your fellow freelancers. Let me know your thoughts on this and how we can deliver this free tax clinic to freelancers and self-employed.
That’s a great idea! If you could arrange a get-together where freelancers can approach you with their tax concerns, that would be a huge help. 🙂
please do let us know if the free tax clinic will push through. would like to attend it. thank you!
very informative blog, btw 🙂
Hi there just wanted to give you a quick heads up. The words in your post seem to be running off the screen in Safari. I’m not sure if this is a formatting issue or something to do with web browser compatibility but I figured I’d post to let you know. The layout look great though! Hope you get the issue solved soon. Many thanks
Hi Murray, thanks for letting me know! If you could provide a screenshot of the problem, it’s very much appreciated. I’m using Firefox and Chrome and so far the site looks all right.
Hey Stef,
I stumbled upon your blog as I would like to start paying taxes this 2014. lol. I’ve been a freelancer for 4 years already and yeah, I know that’s quite a while. I’ve been meaning to do this but just didn’t have time to do it, etc..
Anyway, just wondering about the 500 peso TIN registration fee. I already have a TIN no. as I worked previously in a call center. Do I still need to pay for this?
Let me know as soon as you can. Thanks & Happy holidays!
Hi Chel,
Thanks for stopping by The Freelance Pinoy! Kudos to you for taking the initiative to register as a tax-paying freelancer.
My suggestion would be to update the status of your TIN from “employee” to “self-employed.” If I’m not mistaken, that’s usually the procedure for those who have acquired a TIN for employment. Of course, you can always contact the BIR for clarification.
Thanks and happy holidays to you too!
Hi Stef,
I am practically in the same boat as Chel except for the TIN registration fee. I know I need to pay taxes (I’m an Accountancy graduate) but the tax books I studied 5 years ago did not have anything to say about freelancing.
Hopefully, registration would not be painful this time with my RDO. The last time I did so, all I got was a puzzled look from the Officer of the Day.
Thanks for your helpful blog!
Hi Rowena! Thanks for reading. See my response to Chel’s comment. Thanks! 🙂
hello there Stef 🙂
this site you made was really a great big help for me.. I am required to be registered with the BIR for the practice of my profession and I was in doomed when I processed my BIR Registration..actually I already did transact with BIR two days ago but I stop when they gave me a form authorizing printing of receipt..Thousands of questions bothered my mind and the officer assisting me cannot explain it to me very well..she just said i should go the person in white for blah blah blah blah (i really cannot understand her instructions) then I left..Now I know that the one she was trying to tell me is to print invoices on printers..
Tomorrow I’ll go back to BIR and finish what I should!
My the God give me courage and strength..
Anyways super thank you Stef..blogger like you are angels to us “mangmangs”, or better I say newbies heheh :p
God bless you any time..
That’s great Tin Tin. Thank you so much and good luck! And for sure you’ll be a pro at what you do eventually. 😉
very helpful, Stef! I was really thinking about getting myself registered as a taxpayer (being an online freelancer) but was quite clueless of the steps. Now I have a clearer picture of the steps and the whole point of registering. thank you for sharing this article! 🙂
That’s great, Celine. Thanks as well!
Hi Stef!
I’ve been a freelancer since 2010. Sad to say, this is the only time that I’ve been acquainted with the fact that freelancers also need to pay taxes, which I haven’t done since I started accepting offshore projects. 🙁
So I have a few questions, which I hope you can help me with.. I already have a TIN ID (I got one when I worked for a corporate office back then).. what should be my next step if I need to pay taxes from here on? Can I still use the same TIN ID or should I register for a new one if I plan to continue my freelancing job? I just read that you’ll need those books and journals to go as well..
Right now, I already forgot the income that I generated from the previous years, so I won’t be able to declare those anymore. But I would like to declare the ones that I’m getting now, no matter how small the amount is. I hope you can help enlighten me on this matter, as I want to do what’s right.
Thank you in advance! 🙂
Hi MF,
I’ll be publishing a post on common questions about the BIR next week, so stay tuned for that!
To answer your question, you have to update your TIN registration and comply with the requirements to start a business. Also, it pays to have an accountant who can help you compute for your correct taxes. You can actually check out this step-by-step guide on how to compute for income tax.
I am a new professional. When filling out BIR form 0605, what should I write in question #2 Year ended and question #7 return period. I checked out the image of your accomplished BIR form 0605 but these portions were blocked out by the receipt. Can you post the accomplished 0605 form once again without the receipt?
It depends on what you’re paying for using form 0605. If you are paying for the annual registration fee, the year ended is December 2014. Just keep the return period blank if you’re not paying for a tax return.
Hi Stef.
Quick question, since you have those books/receipts, how did you issue one if you’re client is from abroad? Say for example, you work at oDesk/Elance or any referred freelance gigs, is it required to issue a receipt?
Dex Q,
Yup, you’ll still need to issue a receipt. But, you can simply scan it and send it to the client or keep the white/client’s copy. The most important copy is the BIR’s, since this is how they’ll know you’re making sales.
hi i work as a medical transcriptionist home base so pano ako magreregister sa BIR?
Go to your BIR Revenue District Office, ask for the checklist of requirements to be registered as a self-employed professional.
Hi,
There’s a new 1701 form right now. Will it be possible to have an article written about it for reference of those hundreds reading the blog? 🙂
Thanks.
Hi Jon! Thanks for the heads-up. Form 1701 isn’t part of the registration process, but I did check and updated all the broken links for everyone’s reference. 🙂
Hi steff, Im having a dilema now and I really wish tuat you could help me. I recently applied for a TIN using the ereg system of bir and I was successful in obtaining the number but I have not yet passed the 1901 and 0605 forms because a few days later an employer called to me telling me that they wanted me join their company. Now my problem is that i want to join the company, would I be able to use the TIN even though it has a Professional status? I would really appreciate for anyone that could help me. Thank you.
Sorry I almost forgot, i am a licensed engineer. Thank you
Andreii, after paying for your registration, I believe you’ll need to update your TIN using form 1905 and have it reverted back to employee status.
How about those working from home doing online jobs and not paying taxes? The companies are in overseas and hire employees in other countries without any benefits or taxes deducted to their salaries. Can those employees be called as freelancers too? I need help I am doing a school report regarding home based jobs. Thank you.
We appreciate your efforts in sharing this is very informative. Thanks:)
You’re welcome Nelly!
hi, Stef
i’m a licensed dentist since 2010,but i’m not practicing my profession(some personal reason). And for the past 3years i paid P330 every January for PTR to avoid accumulation of penalty(even though I’m not practicing); because the treasury office may force me to pay for it in the future if I decided to put-up a clinic.
And recently, just to have an extra I.D(TIN I.D) i went to BIR to apply TIN. to be able for me transact to any government offices and; able to open personal savings account.But, my tin is under the category of E.O 98, not as a self-employed/nor professional. I didn’t told them my profession,but instead, I show them my birth certificate only; because I thought that the BIR officer will register me into a professional category and I pay an annual registration P500,etc…(even i’m not establishing any business name).
Stef, If i will put-up a clinic/office soon and have it registered to BIR using my TIN and then, they found out for several years that i’m a professional,paying PTR annually,and holding a TIN I.D which is under E.O 98/or as employee category; did I violate any law of taxation like not filing ITR…? Thanks…
Hi, Stef! This is a very informative guide. I take it that these steps still apply today. The printer part is slightly confusing, though. If you don’t mind my asking, how much did you end up paying for the printer thing that was recommended by the BIR personnel? Was it really too expensive? Though you recommend looking for a printer somewhere else, I (want to) prefer the BIR-recommended one since it sounds less troublesome during registration.
hi stef,
I am an Architect and decided to apply for BIR to pay taxes in good fate as a Freelancer. I already had the Certificate of Registration on my hand but I decided not to apply for the Authority to Print for my Receipts because I don’t still need those receipts since I don’t still have projects or clients requiring for Tax Receipts. By the way on my experiences dealing with clients most of them want to exclude the Tax because they will shoulder those taxes. To cut the story short, I have decided to return last week to BIR for the Authority to Print application and I was shock because they told me I have penalties to Pay for the Late filing of ATP. They charged me for a penalty of 10,000. I argued with them because how can they charged me for that big amount of money since I just applied as a Freelance Architect only? I already reviewed the Laws and rules about their taxation and I found out that all the Penalties and regulation are only applicable on the Business Companies. I just want to know what are the most reasonable way to settle this? are there any ways not to pay that big amount of penalty? If I decide not to pay the penalty and not to go back to BIR and just forget everything about it, are there any consequences? I hope you here your advices. Thank you!
Hi Michael,
Oh wow, I’m sorry to hear that you’re being charged such a big amount! What do you mean though by “all the Penalties and regulation are only applicable on the Business Companies”?
It’s true though that you are required to print receipts when registering because you’re essentially starting a business and so you need to have those receipts made, even though you don’t have paying customers yet.
You can ask to speak to the head of the RDO and explain your situation. That’s what I did when I had questions and I needed to clarify with the BIR.
With that said, you don’t want to simply ignore the BIR and forget about the penalty. It could result into a much bigger consequence since you’ve already registered as proven by your COR.
Do let us know how it goes.
Hi Stef,
Thanks for you reply. Regarding to what I mean about the Penalties and regulations which are only applicable on the Business Companies, I just found out the they don’t really have the rules and regulations for the professionals applying as Freelancer… In my case, I applied as freelancer but they registered me as a sole proprietorship business… I realized that basically they don’t have the proper penalties and reasonable regulations applicable for a FREELANCERS… example if you have happened to inform them this month that you don’t have an architectural project you will have a penalty… Penalties which they based form there system on giving penalties on companies….
I mean… example if you have happened NOT to inform them this month that you don’t have an architectural project you will have a penalty… Penalties which they based form there system on giving penalties on companies….
hi miss stef! =)
thank you for this post.
mind if i ask.
do i still need to register on bir to pay taxes as an online seller even if im also employed in a company where i also pay taxes?
If your are employed, you pay the compensation tax of your salary. If you, go into whatever business as long as it’s not illegal, you pay business taxes. The said taxes are not the same, that’s why you have to register your online business.
-Every business must be registered with DTI, be it a carenderia, sari-sari store or an online shop . It’s important to register your business first w/ DTI before applying for a Mayor’s Permit because your application will not be processed if you fail to submit a DTI Certifcate which would verify that you are legally allowed to run a business under a certain name.
-Whatever type of online job you have whether you’re a low income earner(minimum wage)you are required to file an ITR. If you’re planning to go abroad(vacation etc) and you will be required to get a visa, one of the requirements is the ITR. If there’s nothing you can show as proof that you’re paying your taxes as a ‘freelancer’ yet you have lots of money in the bank(show money) then you’re giving the consul the reason to deny your application.
Hi,
I already have TIN because it was given to me when I was working in the BPO companies but right now, i am just working from home. How much is the cost of the printer ? and what is the next step if i have the TIN?. I don’t quite understand what is the purpose of having the printer? Can you explain thanks.
Also, I am running a small home-based business since August of 2013, which my agents works from their home offices (means, they are working from home too). It is like a virtual/remote staffing and our clients are in the US, Canada and Singapore. Would it be considered as a business type or self employed since i only have 1 pc and i am just outsourcing my campaigns to them?. Please advise, I am very interested to pay my taxes to BIR I just don’t know what are the processes since I have the TIN. Thanks
Hi Freelancers,
I read discussions here and I would like to offer help for all your tax questions. You may reach me via email (manalo.noli@mdco.ph), phone (0999-8830107, 0922-8692562 or 0917-5176359) or facebook.com/MDCo.
Cheers, Noli
Hi, Stef! Just came across this post and at the exact time that i’m thinking of registering my VA business. Was a bit confused on freelancing/ professional and business. MY website’s name is professionalvas.com, thus, not my real name. Does this mean i’d have to register as a business? Where will i need the receipts for if i offer services to U.S. clients only? Does that mean i’d have to make them myself whenever i get online payments? Just want to make sure i know what to do when i get there. Thanks a lot. 🙂
Of course, you’re required to register ANY business of yours and issue gov’t-registered receipts for payments made by your clients WHEREVER they’re located.
By ANY business, I mean any legal business.
hi stef,,where can i find my PSIC -PSOC in my COR?.. thank you…
I am currently employed but also do some free lancing online. I am paying tax in my currently employment do I need to register for my online job? The thing is I am employed by odesk and they did not require us to pay taxes or deduct any tax.
Hi Stef and fellow Freelancers,
First of all, I do consider myself as a freelancer. I have a “client” and required me to get a DTI registration. I onboarded last May2013 and I receive Form2307 quarterly.
At hand, I have 4 2037s. Q2-Q4 2013 and Q1 2014. I am in the process of registration. Upon submission of my documents, the BIR agent saw my DTI and advised me to get a Mayro’s Permit. But upon checking with the agency’s accountant, I fall under Individual – Professional and NOT Sole Prop. Your thoughts?
Im still in the process of registration. Hope I meet the Apr15 deadline.
Hi Stef! I’m a freelancer offering services to different companies.
Just want to ask how do I get a job order as a freelancer. I’ve never had one and honestly, i dont know what it is. I don’t have any upcoming jobs at the moment so i don’t have any reason to get a job order. But the bir requires it for you to obtain the atp. I hope you can answer my questions. Thank you!
I have one question: Please if anyone knows the answer I would appreciate it really. I am “as-if” employed in one Government Agency as Project Manager (Consultancy Service). I am about to get my salary today as agreed in my contract. Automatic naman naka-deduct ang tax ko. Pero our accountant still required me to issue official receipt as consultant. The weird this lang for me is automatic deduction na nga ang tax ko, magiissue pa ako ng resibo eh di madodoble babayaran ko sa BIR?
Get the withholding tax certificate from that gov’t agency as proof of your tax payment, hindi na madodoble tax mo.
Hi Stef and Fellow Freelancer. Just want to ask my husband was an employee before and now he works for an agency as a service provider. As part of his requirements in this agency was to have a DTI permit.. so kumuha na po kami. My question is.. Is this necessary? Since when I started reading your post Ive learned that getting a DTi permit you need also to get Mayors permit etc..
Service Provider po yung job title nya and IT consultant.. Yung agency babayaran siya monthly sa work na gagawin niya. Do you think we need pa yung DTI registration since hndi nman po siya nagtayo ng business niya and wala rin naman siyang office. Please help us thanks…
siz, based on my experience the DTI permit is for those registering a business under a business name. If you’re simply filing as a self-employed professional and that your business is registered under your name, you don’t need to acquire a DTI permit or a mayor’s permit. You can inquire at your RDO for confirmation if you’re still unsure. They are the best people to ask.
hi Stef. need help.
i work this past 6 month and i file a registration in BIR as prof until book of accounts but i didnt continue because my friend told me that im already registered, but when i complied in BIR about my tin they say that my tin is E.O. that i dont have any tax and i file the ITR since i have withheld tax this last year and i pay it but now im in this day i was terminated. do i need to register the tin? and what is the consequences if i dont registered since (im alredy terminated)?
Kite, I’m not so sure what you are referring to, but it sounds like a special case that isn’t covered in this post. You’ll have to consult with your specific RDO regarding your case as they’re the best people to advise you regarding the status of your TIN.
Hi, I was applying for a change in trade name but they are looking for my payment form 0605, but my dad lost a copy of it. what will i do? tia
Hi Stef! I’m a musician and want to register my band as business. I’m confuse in the how’s of registering my band
Also I’m terrified na baka habulin kami ng BIR cause my band’s been around for 5 years na. Baka instead of legalizing our music business, mapenalize pa kami.
Thanks for the help
@disqus_59EIge4zsA:disqus, thanks for stopping by!
My guess is that you’d fall under the business category, and would have to pick up and fill up documents that aren’t included in the post (e.g. DTI permit, since you’ll be registering your band’s name).
My advice is to drop by your RDO and let the BIR officer-of-the-day know what your business is going to be and what requirements you need to submit based on the nature of your business.
Also, when you register as a tax payer, you’ll begin paying for the quarter covered since your registration at the BIR.
A DTI-registered trade name can legally be used only in the place of registration. I think registering a band’s name as a trade/service mark with the Intellectual Properly Office or as a company/partnership with the SEC legally allows the band’s name to be used anywhere in the Philippines and even internationally which is more suitable for a mobile band.
Good day! If I’ll be doing a “bag tag” making/crafting service which includes designing, printing etc. that I would do during my free time, does that make me a self-employed? Or should I register it as a business instead? I really intend to offers services instead of having my own office and store because I don’t have other manpower to man them.
Thanks in advance..
hi, i owned a business last january 2009 until november of 2009 i have to close it bacause nalulugi na ung small business, i didn’t know na kelangan pala ma-close ung business sa BIR and Municipal Hall. november 2009 i was employed in a manufacturing company, ginamit ko yung TIN number. until now i’m working as an employee pero ang TIN ko nka-business, may open cases pa ako sa bir, what should i do?
Settle your open cases. Kun hindi mo kaya bayaran lahat, make a legal
compromise with the BIR.
Hello Stef,
I am currently employed but also do some free lancing online. I am
paying tax in my currently employment do I need to register for my
online job?
The tax you pay for your employment is compensation income tax while taxes due for your freelancing are business tax and business income tax. The said taxes are different, that’s why you have to register your freelancing.
I’ve visited our RDO for clarifications and the woman at the client inquiry section told me “It’s ok to register and it’s ok also not to register” she said “It depends on me”. and if i really want to register it, she said i need to get a PTR (Professional Tax Receipt) first from our City Hall. I’m really confused right now. If I do process the registration, how many days will it take for me to have the registered paper as a proof of my freelancing work? Need your reply very soon. Thank you!
In our city hall, the process of getting a PTR is the same as in getting a cedula. In my experience, after your have submitted all the requirements for registration and the BIR person in charge stamps “received” on your application form and signs it, you’ll get your certificate of registration on the same day after attending the mandatory tax briefing/seminar for newly registered taxpayers.
Hi there, I applied as a freelancer for GMA Network. They asked me to go to BIR because I need to issue a receipt as part of my rendering services. Is the post here applicable for me? If so, can I have my passport as substitute for birth certificate? Thanks for helping. Im so new to this.
Yes, it’s applicable. I think a passport can’t substitute your birth certificate. If you have not time going to the NSO, you may order online.
Thanks Francis! Do you have any idea how much will I spend for printing the receipts? I only need few tbh. Thanks! 🙂
From my experience, printing of receipts is usually fixed in terms of the number of stubs you need to have. You can ask the BIR for the requirements regarding this.
Hello,
Are freelancers earning dollars exempted to pay VAT? And should I write those figures in dollar in my receipts as well? My other concern is my expenses; my phone/internet,house rent, water and electricity bills are not in my name. It is okay to list these as my expenses?
Thank you.
Besides writing dollar figures in your official receipts, be ready in case the BIR audits you. The burden of proof belongs to the taxpayer claiming exemption.
You have to prove that your client is doing business outside the Philippines. If your foreign client is a corporation, get a certificate of no registration from the SEC which proves that your client is not doing business in the country. You also have to prove that your client legally exists in the foreign country by getting a certification proving legal existence issued by the appropriate government official of that foreign country with the certificate authenticated by the authorized Philippine consular officer.
There also has to be proof of dollar remittance from your foreign client by getting the certificate/s of inward remittance/s from your local bank.
This is where many taxpayers claiming exemption fail during their BIR tax audit.
Regarding your mentioned expenses, you’ll have a hard time proving that without the receipts in your name.
Wow, I can’t believe I’m surprised that claiming VAT exemption would not be hassle free, haha. What happens when a taxpayer fails the tax audit? I mean, would the taxpayer be charged with violation of CODE SEC 254 (ftp://ftp.bir.gov.ph/webadmin1/pdf/36076Annex%20A.pdf)? Thanks!
If a taxpayer fails an audit, he/she is still subject to the ongoing legal process before reaching code sec 254. You’ll need a lawyer if you really want to slug it out with the BIR, that’s if you have deep pockets.
I see. Knowing this kind of makes me want to just close shop and seek employment, haha. To clarify, the BIR expects these documents to be on hand when they conduct an audit (otherwise, penalties)? Or do they allow a period of time for the taxpayer to gather these documents? I appreciate your help 🙂
There’s a period of time allowing the taxpayer to get the documents, that’s why it’s called due process. But it’s better not to wait for an audit notice. The foreign document/s can be obtained online and/or via postal mail or courier, no need to go abroad.
“Don’t do a Manny Pacquiao with your taxes especially concerning deadlines.” – so true. It’s the 2nd worst thing you can do to yourself as a tax payer, second to tax evasion. Take action if you know that you have unfinished business with the BIR before the penalties will topple over you.
Hi! Super fail ng pag-inquire ko sa BIR, kulang-kulang yung sinabi nilang kailangan kong dalhing requirements. I’m trying kasi to change my TIN type from EO98 to professional. Pwede kaya ang voter’s ID as proof of address?
Hey Bella, it depends on what type of residence or building you’ll be using to start your business. In my case, I live in a condominium so I was asked to provide proof from the administration that I am a unit owner and that I actually live in that unit. This was my proof of address. 🙂
As for PTR, you’ll need to inquire with either the BIR or the city hall of your area. In my case I registered as a professional that does not require a license to operate, so I was able to proceed to the next step.
Wow thanks for the quick reply! 🙂
I already called up my city hall so I’m ok now with the PTR. Guess I’ll just call up BIR to ask for what proof I could bring. Thanks!
Hello! I don’t know if you can answer me, but I’m curious. I started at freelancer.ph (only this month) and has outstanding withdrawal of 30k+, and since school starts on August, I have no plan of continuing, should I still file tax for that 1 month income?
Sorry, LOL. I just need to know if I’m obligated.
Hi Stef G., in my situation, i’m currently a company employee (which is automatically a taxpayer; complete with ITRs and have a TIN), but sometimes, I do freelance interior design work. I do pay my PTR, but how about my BIR registration as professional? Do I have to register again? Thanks for sharing, good read.
Hey Jill! When you register as a freelancer, you’re essentially registering a new business that’s under your name (unless you decide to operate under a unique business name). My posts on taxation are really designed for freelancers who are going down this route and who are not tied to any 9-5 job or company, so you may want to consult with the BIR about your situation OR browse through the comments below because your question is quite common and there are people like @francf:disqus who are quite knowledgeable about the procedures. 🙂
yes you need to register. you will fall under – mixed income type of tax payer. generally there are 3 types of tax payer. 1. those who’s income comes from purely compensation (employees). 2. those who have purely business income (professionals, businessman etc, including corporation) 3. those who have mixed income – may business at the same time employee.
Hi! 🙂 So about the invoices that we printed, how do we issue these invoices to clients who are outside the country? Is there any other way that we can issue an “online” invoice without using the printed ones?
There are BIR accredited/approved software. You may also apply at the BIR for a computerized accounting system with electronic invoice of your own which will take a very long time for them to approve or disapprove.
A BIR official told me that it would be costly for a small business to go into the issuance of BIR approved electronic invoices, it would be more convenient and cheaper to simply scan the paper invoice and send it to your client by email which is still in accordance with the e-commerce law according to her.
Last question, 🙂 since my client is based outside the Philippines, does that mean that I should be VAT registered?
It does not matter where in the world your clients are on whether you should be VAT or Non-VAT registered.
Francis is right, but export sales are subject to 0% VAT, if ever you are VAT-registered. http://philcpa.org
Hello! I tried to register before on eREG and I think I am on the 3rd step on the form but I did not continue it till the last step. Today I registered again and I completed it this time. Will the incomplete one won’t register to BIR? Also, If I don’t pay the fee, will the tin number generated today be delete? Thanks!
Hi,
Itatanong ko lang po. I am working as a consultant sa isang government agency. Para saan po ba yung Cert. No. 2306? I-finafile din po ba ito sa BIR?
Maraming salamat!
Yes!
Thanks for the reply. Do I need to issue an Official receipt to the agency. I read kasi na kapag mag-OR ka pa, you need to pay the tax due dun sa OR na yun. E di doble-doble na. Btw, they provide me with 2306 and 2307 every time they pay me.
2306 is issued by the govt. its a withholding on vat. u may use it if vat registered ka. while 2307 magagamit mo sa itr mo yan. as tax credit.
What if I’m working here in the Philippines online, employed by a foreign company that does not have any branches here whatsoever? I’m an online teacher in a foreign company and the company’s figuring out the legal matters here in terms of tax, etc… I literally have no idea where to start. Thanks in advance :*
If the foreign company is not registered with the SEC, then it has no
business/income tax responsibility in the Philippines. But you are
subject to the said taxes as an online teacher. 🙂
Hi Francis,
I’m connected with an online company based abroad and not registered in the Philippines. I’m invited to travel to abroad to attend a business conference. The Visa office of that country here in Philippines ask me for a latest ITR. Obviously I don’t have this. How will I able to handle this? Would writing a letter providing an explanation that I cannot provide the document will be enough? Do you have some advice? Thanks.
Same boat here. I am in the Philippines but works online for an overseas company that is not registered in the Philippines. I am not a freelancer. I want to properly pay taxes but I do not know if I should file as self-employed or not. It’s like I’m an OFW but not 🙁 I hope BIR gets back to me asap. Anyone here knows what to do?
If the foreign company is not registered with the SEC, then it has no business/income tax responsibility in the Philippines. But you are subject to the said taxes as an online teacher.
Hi Stef, I’m currently employed as a Consultant in a City Government for exactly 1 year and 2 months now and it is my first job but they said that I have to register a TIN by myself because my employment status is just Consultant as they explained. Taxes are deducted to my monthly salaries since then. My work usually consist of software development, IT infrastructure planning and deployment, and multimedia services.
This February I registered a TIN online at eReg as a Professional since I am employed and also have a freelance work, I received my TIN via email. But just this last July I got employed as a Consultant again to another Government Institution. So to sum things up, I have two (2) employers and a freelance work.
Now my question is what are the other documentary requirements I have to prepare to complete the whole process since my last online registration, have a COE and TIN ID? Do I also have to file a late ITR, if yes does it have a penalty?
I’m planning to settle it this month. Thanks for the big help!
PS. This is a great blog, are you running WordPress? 😀
Hey Aaron, thanks for dropping by! I’m not so sure if I understand your comment. Do you mean that you already received your COE and TIN, but haven’t completed the registration process yet? Were you able to purchase your books of accounts and your receipts? Pay for your quarterly ITR?
As I always advise freelancers with questions about their unique tax situations, the best people to consult is the officer-of-the-day or the head officer at their RDO. They’ll be able to inform you of what requirements to submit, if you have to pay any penalties, etc.
Let me know how it goes!
And yes, the blog is on WordPress. Thank you! 🙂
Good day Stef! Yes, I have my TIN now and don’t have a COE yet, and haven’t completed the registration process either. Don’t have the books of accounts and receipts and haven’t started filing ITR or quarterly ITR as you termed it.
Will surely do what you advised. This whole tax thing makes me nuts, spice it up with unhelpful BIR employees at RDO 27 and it gets a whole lot of mess
mess. I will drop by again and let you know how it goes. Thanks a lot! 🙂
What is the percentage of taxes for Freelancers?
Usually 3% of gross
Hello Stef..nagregister ako ng tin ko using eReg kasi requirements sa agency na inaaplyan ko..di naman ako professional isa ako electrician….then mali yta yung fill up ko kasi ang nakalagay ay professional taxpayertype..ang pagkakaalam ko kasi pag professional register ka sa PRC,pwede ko pa ba ikorek yun or okey lang ba na ganun?then nkarecieve ako sa email ko na kelangan ko magbayad ng 500 para sa COR at ID,may magiging problema ba ako kung di ko sya bayaran ..plz reply thanks
Hi Ms. Steff, almost parehas kami ng situation ni Mr. Art, ung comment sa baba ko. Nagkamali ako ng register. I registered online din only to to realize later na pang professional/ business lang pala un. I am just a regular employee. Is there any other way to avoid paying the 500php na registration fee (which is only for professionals/business)? Nung pumunta ako sa RDO to correct my mistake, sabi nila I still need to pay it no matter what, before they can change the type of my tin (from professional to regular employee). It would be like a ‘penalty’ daw. bakit kaya kailangan ko pa bayaran un eh wala naman akong business at di naman ako professional. Nagkamali lang ako ng register. I was thinking if I decided to just cancel my current tin, and then get a new one again, this time as regular employee, can I avoid paying the 500? please I need your advice thank you!
matagal sila magreply huhu..dapat pala pag di ka pa employed di ka pwede sa eReg..
nagtanong na po ba kayo sa Rdo niyo? ano po ang sabi? kasi ang sabi sakin kailangan ko pa din daw bayaran ung 500 bago nila mapalitan ung type ng tin ko, from professional to regular employee.. na sstress na nga ko eh di pa ko nag sstart kumita gastos na agad. hay. sana may mag reply.
bayaran mo nlng wla kna magagawa dun.. :(:(
make a formal letter addressed to the rdo officer. then fill up a 1905. dapat ang nagaasikaso nyan yung employer nyo.
Hi guys, suppose you have been a freelancer and you want to start things right >
a. You haven’t paid taxes for 5 years and you want to start things right, can BIR trace previous work online if you decide to register ?
b. Let’s say your online business gets you like 10,000 net transactionfees already. How much of that 10k is taxable ?
And if u earn 30k the next month ?
c. Do you declare the work as usd or peso equivalent ? Let’s say a simple site costs 2,000 and a more complex site with different pages cost 30,000. How do we differentiate this? Can BIR understand ?
hi, i had the same dilemma with you too.. hope someone can answer this..
same question… someone please help? 🙁
As long as you don’t have a formal notice from the BIR, just start things right. Your other questions may be answered during the required tax briefing/seminar by the BIR for new taxpayers.
Hi Francis and fellow Freelancers!
Thank you very much for this very helpful blog.
I am really a bit confused of the TIN part. I have a TIN number which I got when I was first employed. And now, I am doing freelance job. Do I have to get another TIN so I can pay taxes for my freelance services? Aren’t we supposed to get only 1 TIN?
Thank you very much
It’s illegal to have more than TIN. Register at the BIR as a self-employed professional with the same TIN
Yes that’s what I will be doing. Fran , do you declare your income in $$$ or in peso equivalent ?
Let’s say you make a poster, around 10 – 50 usd or more. How do you report that project 1 is only 10 usd, and project 2 is around 20000 usd ? How do you justify the pricing ?
2.) Can you compute how much you need to pay if you earn like 10,000 a month ?
@francf:disqus as jampack said on question #1, will BIR trace your previous income? say you wanna start things right and you have already earn millions (around 8-10 million) and some of them on the bank and invested already like car, farm and house.. can they trace you?
Hi Steph and fellow Freelancers!
Thank you very much for this very helpful blog.
I am really a bit confused of the TIN part. I have a TIN number which I got when I was first employed. And now, I am doing freelance job. Do I have to get another TIN so I can pay taxes for my freelance services? Aren’t we supposed to get only 1 TIN?
Thank you very much
It’s illegal to have more than TIN. Register at the BIR as a self-employed professional with the same TIN.
Hi Francis, I really appreciate your quick response. Thank you.
Are printing of invoices required?
Yup. The BIR will make you fill an Authority to Print form.
Thanks. Why do I need to “find a printer I trust”? I’m guessing it’s not just an ordinary printer like the one I have at home?
Also, are the invoices only for the initial registration? Or for all future tax payments?
they will issue an author. sales invoice, collection receipts should be registered to bir. you cannot just print it from your printer since it has a control number.
FrancisF as jampack said on question #1, will BIR trace your previous income? say you wanna start things right and you have already earn millions (around 8-10 million) and some of them on the bank and invested already like car, farm and house.. can they trace you?
I talked recently to a BIR employee ( senior ) not sure if she’s retired or not and this is what she said. I explained about paypal , transaction fees and the nature of freelancing.
1.) First question – not to worry about it since it wasn’t documented. If they do decide they will only go with the taxable amount.
2.) In freelancing there is no proper tax laws for this one yet , so if you decide you will one of the pioneers lol. I asked her if it’s right to put all your transactions she even suggested just put some =) There is no need to file yet but for ITR purposes / bank loans , this is needed.
3.) In your case freelanceeverywhere you earned millions so I suggest you start filing for voluntary tax.
4.) You control your expenses, in fact you can put aircon expenses , transportation etc for your expenses of your freelance. This is what she said is the advantange of deciding what to put. I bought my laptop and printer years ago but I’m hoping I could put this in expenses as well.
5.) It’s best to start january 2015 for a clean start for your income tax.
If your freelance income goes to your bank account then the BIR can’t legally trace your deposits because of the bank secrecy law. But if you purchased things like a car and real properly, you’re required to pay taxes in order to transfer those in your name as the new owner, which will require your TIN — those are paper trails that the BIR can legally follow. I think the BIR is focused more on running after big-time tax evaders because it’s more cost-effective for the BIR.
Yes they can. As long as your properties are named after you.
what are the changes of tax payer’s status?? thnx in advance
Hello! I am a full time freelancer for a year now. Paiba iba monthly yung salary ko. I am planning to get a house through bank financing pero need daw ng ITR. Nagwork ako sa isang company before for almost 2 years and now na full time freelancer ako e hindi na ako nagbabayad ng tax. Ngayon nga need daw ng bank yung ITR ko para maprocess yung bank loan ko kung maaapprove or not. Kung bang magfafile ako ng ITR ko and let’s around 40-50k yung base salary ko for my freelancing job the past year, magkano babayaran ko.. Or should I consult a CPA instead..
I am in the Philippines but works online for an overseas company that is not registered in the Philippines. I am not a freelancer. I want to properly pay taxes but I do not know if I should file as self-employed or not. It’s like I’m an OFW but not 🙁 I hope BIR gets back to me asap. Anyone here knows what to do?