The penalty for late business permit renewal varies per city, but the consequences are the same – non-complying businesses are subject to monthly surcharge and interest fees that that can snowball pretty quickly. These include:
Moreover, failing to renew your permit or register your business results in a fine ranging from P5,000 to P20,000, and in extreme cases – confiscation of assets and business closure.
So how do you avoid late renewal fees? This article discusses the requirements and processes needed to renew your business permit each year.
Getting ready to renew your permit
When renewing your business permit and Bureau of Internal Revenue (BIR) registration, you’ll go through no less than three government institutions, including the barangay, City Hall, and BIR.
The entire process, from gathering the necessary documents to visiting the aforementioned institutions, can take up to several days.
So don’t wait until the last minute to renew your permit. In order to renew your permit on time, you need to be aware of any deadlines so that you can plan accordingly.
The deadline for renewing business permits is January 20 each year. For this, you must pay a visit to local government units (LGUs), such as the concerned barangay and City Hall.
In addition to renewing you business permit, you’ll also have to renew your business registration with the BIR. The deadline for this is January 31 each year.
Prepare all the necessary documents in advance to minimize the risk of likelihood renewal due to incomplete documentation and long lines at the offices.
Barangay permit renewal
Mayor’s/business permit renewal
It usually takes the City Hall up to several weeks to release new business permits.
BIR registration renewal
Don’t use fixers to renew your permits
Beware of fixers when renewing permits. There have been instances of fixers offering to expedite the renewal process, only to run off with the money intended for the fees and payments.
In some cases, there are fixers who present themselves as accountants and promise to speed up the process, but don’t really function as accountants by helping you pay the right amount in taxes. Instead, they use their connections to hasten the process and secure a discount by underdeclaring sales and gross receipts.
And while this may seem tempting to business owners who don’t have time to process permits on their own, or would like to pay less in taxes, keep in mind that this arrangement puts you at risk for tax evasion, subject to corresponding penalties.