Law Summary
Definition of Terms
- Primary Registration: Process to register any person/entity with the BIR and obtain a Taxpayer Identification Number (TIN)
- Updates: Changes to information supplied during registration
- Cancellation: Tagging registration as cancelled but retained in BIR database
- TIN: Unique non-transferable number identifying taxpayers
- Commencement of Business: Defined from first sale or issuance of Mayor's Permit
- Head Office: Principal place of business or residence for mobile vendors
- Branch: Separate place of business conducting sales independently, requiring registration and fees
- Separate or Distinct Establishment: Business units under different business names treated as branches
- Facility: Production sites, warehouses, bus terminals, etc., needing registration but no fee
- Administrative Office: Office maintaining records and cashier functions, may convert facility to branch
- Mixed Income Earner: Person who earns compensation and engages in business or profession
- Marginal Income Earner: Individuals with sales not exceeding P100,000 annually
Initial Stage of Primary Registration: TIN Application and Issuance
- One TIN per taxpayer, non-transferable and permanent for natural persons
- TIN cancelled for dissolved juridical persons or deceased individuals
- TIN card issued free of charge on first issuance, P100 fee for replacement
- Persons required to secure TIN include taxpayers of all internal revenue taxes, persons withholding taxes, and those required to indicate TIN on specific documents
- Application via prescribed BIR forms supported by appropriate identification and documentary requirements
- TIN may also be secured through BIR e-facilities, SEC, or authorized agencies
- Venue for application depends on residence, head office, or nature of business
Second Stage of Primary Registration: Business, Employment, and Undertaking Registration
- Required for employees, self-employed, juridical persons, government agencies and their branches
- Completion includes payment of registration fee, securing of Certificate of Registration (COR), obtaining receipts, and attendance at taxpayer briefing
Timeline for Proceeding to Second Stage
- Employees must register within 10 days of employment
- Self-employed and business owners must register before business commencement or within 30 days of Mayor's Permit
- Corporations must register before payment of applicable taxes like Documentary Stamp Tax
- Partnerships, cooperatives, and similar entities before filing applicable returns
Venue for Filing Registration Forms
- Registers in Revenue District Office (RDO) where business or branch is located
- Transfers allowed upon request with procedures in place
Documentary and Form Requirements
- Different documents required depending on taxpayer type (individual, juridical persons, trust, estate, etc.)
- Business permits, registrations, lease contracts, franchise agreements among common documentary supports
Certificate of Registration (COR)
- Issued only to business/practice entities, not employees or one-time taxpayers
- Contains vital registration data including TIN, business name, address, tax types, incentive info
- Must be posted publicly in business premises
Grounds for Denial of Registration
- Material misrepresentation or omission
- Non-submission of required documents
- Duplicate TIN application
Annual Registration Fee
- Fee of P500 imposed annually per establishment
- Exemptions for cooperatives, employees, marginal income earners, government agencies in non-profit activities, etc.
- Fee payable at Authorized Agent Banks or with collection officers
Registration of Tax Types
- Must register all applicable internal revenue taxes based on business activity
- VAT registration required for entities exceeding P1.5 million revenue or intended voluntary registration
- Separate rules on registration of VAT, percentage tax, withholding taxes, excise tax, documentary stamp tax, and annual registration fees
- Branch tax registration options exist except for large taxpayers where centralized filing required
Transfer of Registration
- Taxpayers must notify and file updates when moving head office or branches
- Old and new RDOs coordinate transfer of records
- Interim filing may continue at old RDO to avoid collection distortion
- Employee registrations transfer along with employer registration
Update of Registration Information
- Mandatory updates for changes in business nature, exemption status, tax types, and other critical information
- Optional cancellation of VAT registration after certain conditions
Cancellation of Registration
- TIN cancellation occurs upon death, dissolution, multiple TIN discovery, or estate tax payment
- Business registration cancellation requires filing closure notices, inventories, surrender of permits, and return of unused documents
- Rules for destruction of unused invoices and coordination in mergers/consolidations detailed
- Immediate audit investigations follow cancellations except for branch closure
Certification Fee
- Fee of up to P100 per document for certification requests
- Separate fees for multiple documents requested simultaneously
Taxpayer Briefings
- Mandatory tax briefings for new registrants
- Distribution of informational flyers
Forms and Maintenance of Records
- Existing registration forms to be simplified and standardized
- RDOs responsible for maintaining registration documents accessible for verification
Single Database System
- Emphasis on consolidating all registration data into a single clean and accurate database
Penalties
- Failure to register: penalties under applicable revenue laws
- Late registration: P1,000 compromise plus unpaid fees and penalties
- Late payment of registration fee: surcharge, interest, and P200 penalty
- Failure to register branch/facility: P1,000 per unit
- Multiple TIN acquisition: P1,000 penalty per extra TIN plus criminal liability
- Erroneous or incomplete information: P1,000 per error, max P25,000
- RDO personnel errors subject to P1,000 penalty each
Repealing and Transitory Provisions
- Modification or repeal of inconsistent regulations
- Immediate compliance with implementable provisions
- Transitory guidelines to be issued for system enhancement-dependent provisions
Effectivity
- Takes effect fifteen days after full publication in a newspaper of general circulation.