Guide to BIR registration for online businesses

Guide to BIR registration for online businesses

Online shopping is the rage these days. And with social media and the increasingly digital new normal, many Filipino entrepreneurs have already started their own online business to supplement their income.
The surge of online shopping and online business transactions has prompted the government to make sure online sellers are aware of their tax obligations.
According to a memorandum issued by the Bureau of Internal Revenue (BIR), “persons conducting business through any forms of electronic media” must register their online business. However, this BIR memo only applies to those who are earning from their online business regularly.

Benefits of registering your online business


  • It legitimizes your business
    An online business that is registered with the BIR is often considered a legitimate and trustworthy enterprise. Potential customers are more likely to trust sellers that are registered. Many e-commerce platforms also require sellers to provide business registration documents.

  • It makes you confident in promoting your business
    With your online business registered, you can increase your business’ visibility without ever having to worry about getting charged for operating an unlicensed business.

  • It opens more business opportunities
    Being a registered online business allows you to land more projects with larger companies and other businesses. Additionally, your online business can also qualify for loans, subsidies, and tax breaks from various government agencies. Banks, for example, require entrepreneurs and self-employed individuals to provide a BIR Certificate of Registration, DTI certification, and income tax returns.


How to register your online business

Once you’ve registered your online business with the Department of Trade of Industry (DTI) or the Securities Exchange Commission (SEC), take the next steps:

  1. Find the right BIR Revenue District Office (RDO)
    The Revenue District Office is a sector of the BIR that keeps record of all its registered taxpayers. It’s assigned a three-digit numeros or alphanumeric code.
    There are over 100 RDOs in the Philippines, but you can only have one. Your RDO can either be the one that holds jurisdiction over your place of residence or where your business is located.
    Knowing your RDO is important since the BIR has no online registration system and you’ll need to personally visit your RDO.

  3. Fill up BIR Form 1901 and 1906
    Online business owners can be classified as single proprietors, professionals, or mixed-income earners.
    You’ll need to fill out two forms: the BIR Form 1901, which is the Application for Self-Employed (Single Proprietor/Professional).
    Mixed-Income Individuals, Non-Resident Alien Engaged in Trade/Business, Estate and Trust; and the BIR Form 1906, which is the Application for Authority to Print Receipts (ATP) and Invoices.

  5. Apply for a taxpayer identification number (TIN)
    One of the most important requirements when registering a business is your TIN. Issued by the BIR, this unique nine-digit number is required of anyone who earns income in the Philippines.
    If you’re applying for a TIN ID, all you need is a fully accomplished BIR Form 1901, a valid government ID, a copy of your birth certificate, and community tax certificate.

  7. Complete all the necessary documents and requirements
    Aside from BIR Form 1901 and 1906, the other documents you’ll need for registering your online business are:

    • A valid government-issued ID (Driver’s license, passport, birth certificate)
    • Birth certificate
    • Barangay clearance
    • Certificate of Registration (for single proprietors who registered with DTI)

  9. Pay for your Annual Registration Fee
    Pay the annual registration fee (Php 500), the loose DST (Php 50), and the Documentary Stamp Tax (Php 15) at the authorized agent bank of your RDO. Make copies of your BIR payment forms and other relevant documents.
    After receiving the proof of payment, head back to your RDO to present it. You’ll be given your BIR registration documents like your Certificate of Registration (COR) and Authority to Print.

  11. Buy and register your books of account
    There are three types of books where you can keep all of your business transactions: manual, which includes ledgers and columnar books; loose-leaf, which are printed records that can be on journals or Microsoft Excel spreadsheets and; computerized, where you use a program or software for bookkeeping.
    Once you’ve purchased your books of account, you need to register these by filling up BIR Form 1905 or Application for Registration Information Update/Correction/Cancellation. Submit this to your RDO.

Registering your online business can be intimidating especially if you’re new to the process. Let FilePino help you with and all the aspects of company registration in the Philippines. Give us a call today at +63.917.892.2337 or contact us here.