How to Register Your Online Business in the Philippines with BIR and DTI

As a savvy online entrepreneur, registering your business with the Bureau of Internal Revenue (BIR) and Department of Trade and Industry (DTI) is a critical step in ensuring compliance with legal requirements and avoiding potential penalties in the Philippines. This is true whether you’re a freelancer providing online services or running an e-commerce store.

That’s why we’ve created a comprehensive guide to assist you in registering your online business with BIR and DTI. Our step-by-step guide will simplify the process and help you navigate the registration process with ease.

Registering Your Business with DTI

Step 1: Choose a Business Name

When registering your business with DTI, the first step is to choose a unique and catchy business name. This name should not be identical to existing businesses, and it must be memorable and relevant to your business niche.

Step 2: Verify Business Name Availability

After choosing your business name, you need to verify its availability with DTI. You can check the availability of your chosen name by visiting their website or by contacting their office.

Step 3: Fill Out the DTI Registration Form

Once you have verified the availability of your business name, the next step is to fill out the DTI registration form. You can download this form from the DTI website, and it requires basic information about your business, such as your business name, address, and contact details.

Step 4: Submit Your DTI Registration Form

After filling out the DTI registration form, you need to submit it to the nearest DTI office in your area. You will also need to pay a registration fee, which varies depending on your business location and type.

Registration Fee

• Barangay: PHP 200
• City/Municipality: PHP 500
• Regional: PHP 1,000

Step 5: Download Your Certificate

Your business name will be officially registered once your payment has been confirmed. To complete the registration process, head over to the Transaction Inquiry page, where you’ll need to accept the Terms and Conditions and enter the reference code provided during the registration form submission.

Once you’ve completed these steps, your business name will be successfully registered, and you’ll be one step closer to launching your online business.

Register for a Barangay Business Clearance

Step 1: Prepare the required information

• Two valid IDs
• Proof of Address. Contract of Lease (if rented) or Certificate of Land Title (if owned)
• Certificate of registration from DTI

Step 2: Claim Your Barangay Business Clearance

To obtain your Barangay Business Clearance, simply visit the barangay office where your business is located. Fill out the necessary application form and submit it, along with the required documents.

Once all requirements are complete, you can then claim your Barangay Business Clearance. This clearance is an essential document for your business, so make sure to secure it promptly and efficiently.

Register for a Mayor’s Permit

Now you need to apply for a Mayor’s permit with your DTI certificate and Barangay business clearance.

Step 1: Prepare the required documents

• Two valid IDs
• Proof of Address. Contract of Lease (if rented) or Certificate of Land Title (if owned)
• Certificate of registration from DTI
• Barangay Business Clearance

Step 2: Claim Your Mayor’s Permit

To secure your Mayor’s Permit, visit the municipal office in the area where your business is located. You’ll need to fill out the application form and submit it, along with the necessary documents.

Once all requirements are complete, you can then claim your Mayor’s Permit. This permit is also a crucial requirement for your business, so be sure to complete the process accurately and efficiently.

Registering Your Business with BIR

When it comes to BIR registration, the processes differ depending on whether you’re an online shop (single proprietor) or an online freelancer. To help you navigate the process with ease, we’ve outlined the step-by-step procedures for each below.

For online shops (single proprietor)

Step 1: Prepare the Required Documents

• DTI Certificate of Registration
• Barangay Business Clearance
• Mayor’s Permit
• Certificate of Lease (if the place is rented) or Certificate of Land Title (if owned)
• Government-issued identification (Passport, Driver’s License, Birth Certificate, etc.

Step 2: Fill Up BIR Form 1901

Download and complete three copies of the BIR Form 1901, which can be obtained through this link.

Step 3: Visit Your Revenue District Office (RDO)

The RDO is where your business is located and has jurisdiction over you. This is where you submit your application. You can find your respective RDO here.

Step 4: Pay the Registration Fee

To complete your registration, you’ll need to pay a fee of PHP 500, as well as PHP 30 for loose DST or Proof of Payment of Annual Registration Fee (ARF). These fees can be settled at any BIR-accredited bank, which will provide you with a BIR payment form.

Make sure to bring along your Documentary Stamp Tax on Lease for submission as well. 

Once you’ve made your payment, submit a photocopy of your BIR form payments and other required documents to your RDO. This will ensure that your registration process is complete and you’re compliant with all legal requirements.

Step 5: Claim Your Certificate of Registration (COR)

In some cases, certain RDOs may require you to attend a seminar on tax filing prior to releasing your COR. It’s important to clarify this with the RDO after settling your registration fee.

Additionally, when claiming your COR, make sure to also request for an “Ask for Receipt” sign to be provided to you. This will further ensure that your business is compliant with all relevant regulations and requirements.

Step 6: Register Your Book of Accounts

In keeping track of your business transactions, you need to maintain a book of account where you record all your financial activities. There are three types of books of account to choose from:

• Manual Books of Account: This includes journals, ledgers, or columnar books where you manually record your business transactions by hand.
• Loose-leaf Books of Account: This also includes journals and ledgers, but they are printed instead of being handwritten. Additionally, using a spreadsheet application like Microsoft Excel for bookkeeping can also be considered as a loose-leaf book of account.
• Computerised Books of Account: A computerised system or program for bookkeeping that is typically used by businesses with more complex operations.

To register your books of account, you need to fill out and submit BIR Form 1905 along with your books of account to the RDO where your business is registered.

Step 7: Secure an Authority to Print (ATP)

As per BIR regulations, businesses offering services must have an Authority to Print (ATP) receipts while those selling goods must have commercial invoices. To get your ATP, submit three copies of BIR Form 1906 along with a sample of your principal or supplementary invoices and a copy of your COR at the RDO where your business is registered. The processing time usually takes a week.

Once you have your ATP, bring it to an accredited BIR printer. You can check for BIR-accredited printers here. The release of your official invoices may take up to 2 weeks.

For online freelancers

Step 1: Gather the Required Documents

• Tax Identification Number (TIN)
• Occupational Tax Receipt (for non-licensed professionals)
• Professional Tax Receipt (for licensed professionals)
• Government-issued IDs
• NSO Birth Certificate

Note that additional requirements such as a copy of a client contract or Barangay Clearance may be requested by the Revenue District Office (RDO).

Step 2: Get a Tax Identification Number (TIN)

Before proceeding to the next step, those who do not have a Tax Identification Number (TIN) yet must accomplish and submit two copies of BIR Form 1901, which is a prerequisite.

Step 3: Update Your Personal Information

If you have been employed before and already possess a TIN, you still have to complete BIR Form 1901 to update your information and declare that you are now “self-employed.” 

You need to also fill out BIR Form 1905 to transfer your TIN registration and change your registered address to the RDO that has jurisdiction over your business. You can locate your respective RDO here

Step 4: Pay Certificate of Registration (COR) Fee

To register for a Certificate of Registration (COR), you need to pay a registration fee of PHP 500. To do this, accomplish BIR Form 0605 and pay the fee at any Authorised Agent Bank in your RDO.

Remember to keep your receipt and a copy of the form as proof of payment. Once you’ve paid the fee, prepare three photocopies of the accomplished form and the receipt.

Step 5: Secure an Occupational Tax Receipt (OTR)

Freelancers are not required by the BIR to submit a DTI permit, but they may need to obtain an OTR. The requirements for OTR issuance vary across municipalities.

To obtain an OTR, you can visit your city hall, where the most basic requirement is a copy of a contract from an existing project or client. If your city does not issue an OTR, you can consult your RDO for alternative options.

Don’t forget to prepare a photocopy of your OTR for submission to the RDO if your city provides one.

Step 6: Submit All Documents to Your RDO

The RDO, or Revenue District Office, has jurisdiction over your business and is the location where you should submit your application. By now, you should already have the contact information of your RDO, if not refer to the link listed in Step 3.

Step 7: Claim Your Certification of Registration (COR)

Depending on the RDO, attending a tax filing seminar may be required before claiming your COR. It’s best to confirm this with your RDO after paying the registration fee.

Don’t forget to ask for the “Ask for Receipt” sign when claiming your COR to comply with BIR regulations.

Step 8: Register Your Book of Account

Like online shops, you require to purchase and register your book of account because keeping it is crucial in recording all your business transactions. There are three types of books of account, which is the same as online shop (Refer to Step 6 for online shop)

For freelancers, you are usually required to maintain 2 books of accounts. To register your books, you need to accomplish and submit BIR Form 1905 along with your books of accounts at the Revenue District Office (RDO) where your business is registered.

Step 9: Secure an Authority to Print (ATP)

To comply with BIR regulations, any businesses (freelancers included) that offer services are required to have Authority to Print (ATP) receipts, while those that sell goods must have commercial invoices.

To obtain an ATP, submit 3 copies of BIR Form 1906, along with a sample of principal or supplementary invoices and a copy of your COR, to the RDO where your business is registered. It usually takes a week to process your application.

Once you have your ATP, submit it to an accredited BIR printer. Check out the list of accredited printers on the BIR website. It usually takes up to 2 weeks to release your official receipts.

Conclusion

Registering your online business with the BIR and DTI is a critical step towards establishing your business in the Philippines. This article provides a comprehensive guide that makes the registration process easy, enabling you to comply with all legal requirements. Compliance is essential to avoid potential penalties and build a thriving business in the long run.

Now that you have completed all the necessary paperwork and registered your online business, you can breathe a sigh of relief, knowing that your business name is now protected and exclusively yours.

Additionally, having the appropriate BIR registration demonstrates your responsibility in fulfilling your tax obligations, making you ready to take charge and grow your online business as your own boss.

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