BIR REQUIREMENTS ON HOW TO REGISTER AS A FREELANCER OR PROFESSIONAL

I've always believed that blogging is sharing helpful information among friends (both real and virtual) and so I have prepared a write up about my experience on how to register as a freelancer or professional.

There are many reasons why we need to pay taxes amidst all the corruption issues going all over the country, but I'll leave that decision with you.

Obviously, this post is for those who are decided to register themselves as a freelancer or professional. This is based on my personal experience. 

FREELANCER/PROFESSIONAL WHO?

This represents you if you are not working for any specific company. Otherwise, your employer will file your taxes for you. These terms are often used interchangeably. Professional, freelancer, self employed. Bottom line is you are an individual practicing a craft or profession (on your own).

LET THE (REGISTRATION) PROCESS BEGIN:

UPDATE YOUR RDO, AS NECESSARY.

RDO means Revenue District Office. If you are working in Place A before, but now will be working in Place B. You need to update BIR with your new RDO. If you want to determine the nearest BIR RDO from your place, visit the complete list from BIR SITE.

Go to your old RDO (ask your previous employer where this is) and accomplish BIR FORM 1905 (Application for Registration Information Update). PDF sample HERE. In my case, I approached RDO Makati and Manong guard gave me 2 copies. I was given a stub and was asked to wait for my turn. After about 20 minutes, the officer stamped both of my forms and gave me one as my copy. ♣ TIP: Since the update might took 5-7 working days, it's best to go to your new RDO after a week.

COMPLETE THE REQUIREMENTS.

Requirements include:

1. BIR Form 1901 (Application for Registration)

Filling up this form is pretty straight forward. You may leave blank the boxes if you are not sure with the answer, once you go to your BIR RDO, you can ask the officer of the day what those boxes meant. You can also call your BIR RDO office. Ask them questions and list all the requirements they mentioned. You may ask for their full name nicely. If any conflicts arise, you can always refer to them and the info they provided.

2. BIR Form 0605 (Payment Form)

This is a bit tricky! I was under the impression that I can pay at the BIR cashier or any of that sort. Well I was wrong! So learn from me ☺I was advised to go back because of this! What is this annual fee? You need to pay Php 500 for an annual registration fee. Easiest way to pay is via Accredited Agent Bank (AAB). So the process is: Fill out Form 0605, then pay to the AAB near you. For a complete  list of AAB, click HERE.

♣ TIP: Before going to AAB, accomplish form 0605 in triplicate. They will stamp the forms and those are what you will present to BIR along with other documents. I've heard that some AAB requires taxpayers to have their TIN validated. If that's the case, you need to go to your BIR RDO and have your TIN validated.

3. PRC License (Photocopy)

If you are a professional registered in Professional Regulation Commission, BIR will ask for a photocopy of your valid license. In my case, I am a Certified Public Accountant (CPA), so I just had my license photocopied back to back.

4. Professional Tax Receipt or PTR (Photocopy)
You need to get this from your Municipal Hall. I paid close to Php 500 for my PTR. This is an annual thing as well. I'd say the process for this one is fast and convenient. They have a cashier this time! Thank you.

♣ TIP: If you are a freelancer with no PRC license, that's okay. Just tell the BIR representative that you are self employed. Hence no need for PRC License and PTR. I suggest you do NOT use the term FREELANCER. Some Most of them don't know what that means and if you're unlucky enough, it may create more needless questions than answers.

5. Books

By books, it meant accounting log books. Basic books include Cash Receipt and Cash Disbursement Journals. You need to log your transactions via journal entries to these books. The record keeping (or bookkeeping) is a bit technical, it's better if you ask your friend whose familiar with accounting for more specific queries.

♣ TIP: You can buy these books from major bookstores. Just tell them Cash Receipt and Cash Disbursement journals. In my case, I opted to buy them from BIR office. Yes - it's available. A bit overpriced though. It retails for Php 40/each. I've been told by my seatmate that it was only Php 25.00 from bookstores. Since time is of the essence, I'd gladly succumb to what's available rather than going back again 0.0

6. Printer

This is another blooper of yours truly! :) I thought printer is a literal printer. Ohhh meyn! For the purpose of this whole thing, ladies and gentlemen, Printer = Taga Print ng Official Receipt. How was I to know?! Imagine my face when I asked the BIR lady about this so called printer. Natatawa pa rin ako everytime I remember :) Well, you live, you learn. #AlanisMorissette

♣ TIP: BIR will ask the following from you: Job Order, Sample of your Official Receipt, Form 1906, Printer Company's Certificate of Registration (COR), Printer Company's Form 0605. For the last 2 requirements, xerox copy will do. ALL OF THESE can be obtained from the printer company.

Now, where to find a printer? You can ask the BIR Representative about this. In my case, my lovely seatmate referred me to another seatmate and thankfully, I now have a printer! I visited them personally and acquired all of the BIR requirements listed on TIP just above this paragraph.

VISIT YOUR BIR RDO - PART 1:

Visit your nearest RDO and present them all these 6 requirements. Best to have back up copies on each one. Once everything is okay, you'll be asked to pay Php 15 for a documentary stamp. After which, you'll be given a claim stub. In my case, I was told to go back after 2 working days.

♣ TIP: Be at BIR as early as possible. Lines pile up so to save yourself from unnecessary inconveniences, show up early. Have some loose change as well. Bring a pen with you and be friendly! :)

VISIT YOUR BIR RDO - PART 2:

You will be asked to attend a tax briefing. Ask questions as much as possible. Remember it would be you who will get penalized if you forgot to pay before deadline, etc. Tax briefing lasted 1 hour. After which, you will be given the following:

a. Certificate of Registration (CoR)

b. Stamped Books (remember the #5 requirement? it has to be BIR-stamped)

c. Authority to Print (AtP) - Before your printer can print your official receipts, they need this ATP.

CONGRATULATIONS! YOU ARE NOW REGISTERED.

Now that you have been registered, be mindful of the tax deadlines. Even if you do not have sale for a given month, you are still required to file appropriate forms. Generally, there are 2 taxes applicable on self-employed individuals. First is business tax, this can be VAT or Percentage Tax. Next is income tax. Make sure that you pay your tax due before the deadline to avoid any untoward hassles.

Lastly, PRAY. You need lots of patience and divine intervention to go through the whole process. I'm not kidding! There are so much to be improved as far as Philippines Tax System is concerned, however, we do what we got to do. Good luck on your journey! -CMK 

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