After getting your business off the ground, it’s time to focus on maintaining and running it effectively. This includes keeping your permits up-to-date. A business permit is one of the major requirements for operating a business in the Philippines. Also known as a Mayor’s Permit, this document must be renewed by registered businesses or enterprises every year.
Steps to renewing your business permit
- Prepare the necessary documents
The requirements and fees for renewing your business permit differs per city or municipality. The nature of your business may also be a factor in the kind of documents required. Here’s a list of the documents that you may need:
- Barangay Clearance – One of the most important documents for renewing your business permit, Barangay Clearance shows that you have complied with the requirements of the local government. Given by your local barangay or smallest government unit, this document is also required when changing your business location or name.
- Latest business permit – When renewing your business permit, you will be required to provide the original and a copy of your previous (last year’s) business permit. Include the official receipt of payment for this permit as well.
- Barangay Certificate – Often confused with Barangay Clearance, a Barangay Certificate is proof of residency in your barangay. This document is only issued to residents who have been living there for at least 6 months.
- Quarterly and Monthly VAT Returns – The Monthly and Quarterly VAT Returns is a declaration of the indirect tax received from the sale of your goods or services. Other than the VAT Returns, you will also be asked to provide your income statement from the previous year.
- Community tax certificate – Also known as a Cedula, this document is issued to individuals and businesses that have paid for community tax.
- Submit documents to your Barangay Hall
Go to the Barangay Hall of your business’s location to renew your Barangay Clearance. Once you have submitted all the necessary documents, pay the processing fee and wait for the Official Receipt.
- Proceed to your local City Hall or Municipal Hall
With your new Barangay Clearance, head to the Business Processing and Licensing Office in your city hall. Accomplish and submit the assessment application form, along with the documents required. Aside from the business permit renewal fee, you may need to pay for Business Tax, Community Tax Certificate, and Real Property Tax as well.
- Renew your BIR Registration
In addition to renewing your business permit, you also need to renew your BIR Certificate of Registration. The deadline for renewal is typically the 30th of January for each year.
There are two ways to renew your BIR registration: by visiting the Revenue District Office (RDO) that has jurisdiction over your location or through the BIR’s online facility. If you plan on renewing your BIR registration online, you can download and install the eBIRForms Package here.
Whether you’re having it manually filed or online, the document that you need to fill out is Form 0605. After filing, pay the annual registration fee of P500 to an Authorized Agent Bank. The BIR also offers other payment options for renewal payment.
Common questions about business permit renewals
- When do I renew my business permit?
Renewing your business permit must be done between January 1 and January 20 of every year. A business permit in the Philippines usually expires on December 31st of each year. Since the entire process of renewing your business permit may take several days, it’s best to start as early as possible.
- What happens if I don’t renew my business permit on time?
Late business permit renewal can be subject to monthly surcharge and interest fees, including a 25% surcharge on unpaid taxes, charges, and fees, and a 2% monthly interest on other unsettled fees. In some cases, it may even lead to closure of the business and the company’s assets being seized. That’s why it’s crucial to take note of the important dates and make sure that you prepare all the needed documents ahead of time.
- Will using fixers speed up the process?
While it may seem tempting to have a fixer renew your permits to help speed up the process, it’s best to steer clear of these individuals. When you hire a fixer, this puts you at risk of tax evasion. Fixers usually declare sales and gross receipts to gain a discount. Some may also take the money for the business permit renewal fees instead.
Run your business smoothly and efficiently with FilePino, your go-to team for navigating the Philippine business landscape. We offer business permit processing assistance, BPO consulting, and more. Reach out to us today at +1.806.553.6552 or contact us here to learn more on how to set up a business in the Philippines.