Today, many Filipinos earn from various income streams. You could have a regular paying job, along with a side hustle like freelancing, selling online, renting out real estate properties, working as a part-time photographer, or even being an influencer. In the Philippines, the tax laws mandate that you must pay the corresponding tax dues for all sources of income with an accumulated amount of more than P250,000 a year.
Bear in mind, under-declaring or not declaring your income at all is a crime punishable by law. It can land you in jail and result in hefty penalties. For this reason, you must register yourself properly if you are self-employed or a mixed income earner, having multiple types of income. If you don’t know what to do, professional tax and accounting services in the Philippines can help you register and file the correct returns for compliance. If you’re curious about the process, here’s how to get a certificate of registration from the BIR for mixed income earners.
What is a Mixed Income Earner?
You fall under this category if you are getting income from different sources such as regular employment, the practice of a profession, business, and/ or doing various side gigs. Regardless of the industry, you work in, you must first register with the BIR to operate legally, avoid risk, and maximize opportunity. As a mixed income earner, you are required to use BIR Form 1901. The following are taxpayers who can use this form:
- Filipino or foreign sole proprietors
- Professionals practicing their professions
- Freelancers
- Employees who are professionals
- Employees and professionals who are also sole proprietors
- Working as an employee, sole proprietor, and professional at the same time
- Persons earning regular income other than payment from an employer including home-based serviced providers to foreign clients and crypto currency traders
- Filipino or foreign estates and trusts
What are the Requirements?
If you’re getting a Certificate of Registration in the BIR as a mixed income earner, you must accomplish the following forms in triplicate. Note that these forms are downloadable from the BIR website:
- BIR Form 1901 or Application for Registration noted above.
- BIR Form 1905 or Application for Registration Information Update. Noteworthy, a person can only have one TIN, and it is illegal to secure more than one.
- BIR Form 0605 or the Payment Form. The annual registration fee is P500.
- BIR Form 2000 or the Documentary Stamp Tax Declaration/ Return (if applicable). You will only use this if you’re renting an office space. Expect to pay P1.00 for every P200 of the rental fee.
- BIR Form 1906 or the Application for Authority to Print Receipts and Invoices
You are also required to present 2-columnar books for stamping, an original certificate of employment, and a photocopy of a valid ID with your updated contact information. Submit all these requirements to the nearest RDO of your place of business or the one near your home if you’re a mobile operator. Then, pay the registration fees and documentary stamps to the applicable Authorized Agent Bank of the RDO. You can also ask professional tax services in Manila to help with BIR Registration on your behalf, by giving them a special power of attorney to facilitate everything.
What Happens Next?
After completing all the necessary documents above, take note of these next crucial steps:
Step 1: Present proof of payment to the BIR RDO.
Step 2: Submit everything needed for the Authority to Print Receipts and Invoices along with registration of your ledger or books.
Step 3: Attend the initial briefing conducted by the RDO for new registrants. This is conducted to inform taxpayers of their rights and obligations. It is a requirement for the issuance of the COR or Certificate of Registration.
Step 4: Once all of these steps are done, the RDO will issue Form 2303 or the COR. You will also be given the notice that says “Ask for Receipt,” along with the approved Authority to Print.
Step 5: Have your receipts and invoices printed, which usually takes a week or two.
If all these sound tedious, getting expert help from tax and auditing services in the Philippines can lighten your load. Many firms offer business registration services.
Other Important Details to Remember
Bear in mind, you must display your COR together with the “Ask for a Receipt” notice in a visible area in your place of business. You are also required to issue official receipts or invoices for every payment received that’s more than P100. on top of that, the BIR mandates that you keep books of account and submit them when you file your taxes. If your gross annual sales are higher than P3 million, your books must be audited by a Certified Public Accountant. If you have any issues, call our tax and accounting services in Pasig.
