Freelancer Guide: How to Register with the BIR

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Freelancing has become an attractive option for those who refuse to be called back to the office and want to continue working from home.

Being your own boss means you will do the work of corporate HR, including paying your taxes. That's why you need to register with the BIR. There are a lot of steps involved, but doing so builds credibility, gets your taxes in order, and expands your client base.

Registering with the BIR addresses one major pain point in freelancing -- issuing receipts.

Here's how to register as an online freelancer:

Requirements for freelancers

  • Tax Identification Number (TIN)
  • Occupational Tax Receipt (for non-licensed professionals)
  • Professional Tax Receipt (for licensed professionals)
  • Government-issued IDs with full name, address, and birth date
  • Birth Certificate

The Revenue District Office (RDO) might ask for additional requirements such as a copy of a contract with a client or Barangay Clearance.

ALSO READ: First-Time Job Applicants: How to Get Gov't Certificates, Clearances

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Take note of your TIN

If you’re starting out as a freelancer with no prior work experience, you need to get a TIN from the Bureau of Internal Revenue. Fill out and submit 2 copies of BIR Form 1901 to your nearest BIR branch.

Transfer Revenue District Office

If you’ve previously worked and already have a TIN, take note of the number as you’ll still need it when filling out the BIR Form 1901 and declare that you will now be self-employed. Form 1901 will be submitted to the BIR.

Let’s say your previous company was in Mandaluyong but you live in Pasay with the intention of working at home full time. You’ll have to change your Revenue District Office from Mandaluyong to Pasay, as that is the city where you will be conducting business.

If you work and live in the same city, if it’s in a different village or street, you still have to update it.

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To transfer your TIN registration to your current RDO, you have to fill out BIR Form 1905. The 1905 form will be submitted to the new RDO, for filing with the old RDO.

Find your RDO here.

Certificate of Registration

The Certificate of Registration (COR) Fee is P500. Fill out BIR Form 0605 and pay the fee to any authorized agent bank of your RDO. Form 0605 is for printing receipts for clients and serves proof of payment of annual registration fee. Keep the receipt and copy of the form.

This must be paid in January of every year, along with the submission of BIR Form 1901, and BIR Form 1905 upon payment.

Secure an OTR or PTR

Online freelancers are not required to submit a DTI permit and can fall under the OTR category, or Occupational Tax Receipt for non-licensed professionals. Any services rendered that requires a license falls under Professional Tax Receipt or PTR.

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Each city has a different set of requirements for OTR issuance. Most city halls will issue an OTR after you present a copy of a contract from an existing project or client.

If your city does not issue an OTR, head for your RDO and ask for additional information on how to get one instead.

If your city issues OTRs, prepare a copy for submission later.

Submission

After you’ve gathered the requirements, it’s time to submit them to your RDO. Documents will be taken so you have to provide photocopies of each one, along with the original

  • Tax Identification Number (TIN)
  • Occupational Tax Receipt (for non-licensed professionals)
  • Government-issued IDs with full name, address, and birth date
  • Birth Certificate
  • Accomplished BIR Form 1901 (three copies)
  • Accomplished BIR Form 1905 (three copies)
  • Accomplished BIR Form 0605 (three copies)
  • Receipt of payment of Certificate of Registration Fee (three copies)

Claiming

Usually a day after submission, the RDO will issue you the Certificate of Registration or COR or BIR Form 2303 together with the “Ask for Receipt” notice and Authority to Print (ATP).

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Once everything has been submitted, you can claim your COR. Seminars for filing taxes are often required so you never miss on contributions and incur penalties. After paying your registration fee, be sure to ask so you don’t miss this requirement.

Upon claiming your COR, you will be given the “Ask for Receipt” sign which you usually see in establishments. 

Authority to print receipts

As a registered freelancer, you are legally mandated to issue receipts to customers. The BIR requires businesses to have Authority to Print receipts if you’re offering services or commercial invoices if you’re selling goods.

To get the the ATP, you need the following:

Accomplish and submit 3 copies of BIR Form 1906 at the RDO, together with a sample of principal or supplementary invoices and a copy of your COR. It would usually take a week before you can get your ATP.

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After acquiring an ATP, go to an accredited BIR printer.Starting July 16, 2022, receipts and invoices have no more validity period and may still be issued until fully exhausted. Release of receipts can take up to two weeks.

Register your books of account

More paperwork awaits you even after registration. To update the BIR of every transaction, you need to purchase and register your books of account. It’s where you keep the original record of all business transactions.

There are three types of accounts, but online freelancers are only required to submit two to their RDO.

Manual Books of Account includes journals, ledgers, or columnar books where you manually handwrite your business transactions.

Loose-leaf Books of Account are also journals and ledgers but are printed instead of handwritten. Tracking through Microsoft Excel or the use of digital spreadsheets counts. 

If you’re next level, you can also choose to submit Computerized Books of Account, where a program or software automatically inputs transactions. This is usually reserved for businesses with large and complex operations that handle a chunk of transactions at a time.

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