14/06/2020
POSTING TO HELP ONLINE SELLERS – Warning: Long post ahead
As a CPA practicing taxation, I want to share my knowledge to those people who are planning to register their online business legally.
Personally, I’m against the registration of online business DURING this crisis for two main reasons, first and foremost, this would promote “mass gathering” on all BIR offices because BIR registration could only be done physically sa mga BIR offices, and second of all, initial cost of registration would be burdensome for online sellers – and instead na idagdag nalang sana sa puhunan nila, mababawasan pa, not to mention tataas ang prices ng products nila dahil dito.
I hope the BIR can reconsider adjusting the period of registration. But since eto na, nandito na tayo, we can only comply rather than complain.
REGISTRATION
Usual business registration would be:
DTI (if sole proprietor) /SEC (if corporation) > LGU (Mayor’s Permit) > BIR
For online businesses- based on RMC 60-2020, no need to apply for a mayor’s permit.
Hence, the process would be DTI/SEC > BIR
1st STEP – Department of Trade and Industry - DTI
Dahil magastos magincorporate ng isang corporation, your first step would be to register sa DTI, apply for the lowest scope (which is barangay) – 200 pesos + 30 pesos documentary stamp tax.
Online application link: https://bnrs.dti.gov.ph/registration/create
Final output: DTI Certificate
2nd and last STEP – BIR – Bureau of Internal Revenue
Fill-up the 1901 FORM – downloadable in the link below
https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1901%20Jan%202018%20ENCS%20V4_03.04.2019.pdf
Kung anong area of jurisdiction ung nasasakupan ng place of business nyo/residential address nyo na nilagay sa DTI registration. Click the link below to check anong BIR office ang nasasakupan nyo.
https://www.bir.gov.ph/index.php/contact-us/directory/revenue-district-offices.html
If walang printer sa bahay, libre itong forms sa mismong BIR offices, pwedeng dun nalang mag fill-up or if malapit lang kayo sa office ko (Silang – Tagaytay), I’ll give you a copy,
Things to bring sa BIR
1.) 2 copies of filled-up 1901 FORM – if u need help for this, you may ask the BIR office how to fill this up.
2.) Government issued – ID – (Driver’s license, passport, PRC license, etc.) if walang kahit ano, Birth certificate will do.
3.) DTI certificate (From 1st step)
4.) 500 pesos to pay for the registration fee and 30 pesos for the documentary stamp taxes
5.) 2000 pesos – 3000 pesos for the printing of the 10 booklets of receipts/invoices – eto ung pinakacostly sa lahat – and depende sa printer/BIR branch ung prices.
Final outputs:
1. Certificate of Registration – form 2303
2. BIR stamped-1901 form
3. “Notice to issue receipt/Invoice”
4. Annual Registratio Fee – 0605 Form
5. BIR Printed Receipt/Invoice or
5.1. ATP – Authority to Print which hahanap kayo ng printer para makapagpaprint ng receipts/invoices.
Note: Magiiba lang ng kaunti ung process – if meron kayong existing TIN number, Ung TIN number nyo is registered on a different RDO (For example, working kayo sa Makati and ung online selling business will be registered sa home address nyo – Cavite), or wala pa kayong existing TIN at all. Pero everything can be sorted out in the BIR office itself.
Total Cost of Registration
DTI – 230 pesos
BIR -2,530 pesos – 3,530 pesos (depending on the printer’s price)
More or less, 3,000 - 4,000 ung magagastos nyo for the registration- bulk of this would be for the printing of receipts. And take note that that there are only 10 booklets, 50 pcs per booklet – a total 500 pieces of receipts/invoices. Please take this into account when you are selling since 1 piece of receipt/invoice may cost you 4 pesos – 6 pesos.
PAYMENT and FILING OF TAXES
Mejo complicated ung filing of taxes but I will only give the simplest recommendation which I think would benefit most of the online sellers.
Upon registration if you think hindi aabot ng 250,000 ang ANNUAL sales mo, ask the BIR personnel that you will avail the 8% tax in the initial registration. Your first 250,000 would be non-taxable. Hence, kailangan lang natin mag file every quarter ng sales declaration. The filing and payment of this tax type will be on a quarter basis, meaning you will only have to file 4 times in a year and an annual registration fee of 500php every January.
Tax strategies and approaches would differ accordingly and it’d be lengthy for me to discuss them here, so kung may questions kayo, I’ll try to answer them.
As for the filing of taxes with E-BIR software, mahirap ipost since this is technical and could result to penalties kapag mali ung nagawa, better to consult with BIR or accountants kung papano ung detailed filing ng taxes.
IMPORTANT NOTE! Please read
1.) Kung temporary lang ung business niyo and eventually babalik na kayo sa work/schools nyo. I suggest not to register anymore since closing of the business is 20X harder than opening a new one, not to mention the cost and time.
2.) If the registration will not be done personally by the owner, please prepare SPA (Special power of attorney) authorizing your business registration para hindi masayang ung punta.
3.) Since hanggang July 31 pa naman ang registration, let’s wait for a week or two, and hope na magbago ang isip ng government. Dahil sabi ko nga, madali magopen ng business, pero mahirap mag close.
4.) COMMON MISTAKE: Kahit magsara na ung business nyo or zero ung sales nyo, you are still required to file your taxes, akala ng iba kapag tumigil na and wala ng operations ang isang business, tapos na rin ung responsibility nila. Dito kadalasan naiipon ang penalty ng isang taxpayer, every missed filing is tantamount to a minimum of 1,000 penalty, in some cases may interest and compromise pa. (Example: Nagopen kayo ng business ngayong 2020 and itinigil nyo rin agad, and after 10 years gusto nyo ulit mag negosyo, magugulat kayo na may 100k ka na palang penalty na kailangang isettle before kayo makapagopen ulit ng negosyo)
5.) Still if you have further questions, always consult an accountant or tax practitioners you know.
I know this is an opportunity for our line of business, but rather than becoming an additional cost for online sellers, I’m happier knowing that those people who are doing anything to survive would have less burdens on their plates. 😊
P**i share nalang po so we can inform/help more Filipinos amidst this crisis 😊
ccto
