It’s important to properly and legally apply for closure of business with the BIR (Bureau of Internal Revenue) and other government agencies if you decide to close your business in the Philippines.
This ensures that you don’t incur fines and other additional liabilities now that your business is no longer earning and in operation.
Here’s the guide to applying for BIR closure as long as you don’t have any tax liabilities.
Where to Apply
Go to the RDO (Regional/District Office) where your business has been registered.
Be sure to secure the following important documents:
- BIR Form No. 1905 (2 originals must be filled out); the forms are provided at the BIR office but you can also download them from the BIR website (www.bir.gov.ph)
- Original copy of the Certificate Of Registration (COR)
- Original copy of business Notices and Permits issued to taxpayer (e.g. ATP, NIRI, Accreditation Certificate, and Permit To Use – for CRM/POS; etc.)
- List (1 original copy) of ending inventory: goods (includes capital goods) and supplies
- Inventory of unused SIs (sales invoices), ORs (official receipts), and CI/CR (commercial receipts/invoices)
- All other unutilized accounting forms (e.g., debit/credit memos, vouchers, purchase orders, delivery receipts, etc.)
You need to prepare the following, depending on what’s applicable:
- Valid IDs
If you’re transacting through or as a representative, you also need to secure the following:
For individual business owners:
- SPA (Special Power of Attorney) executed by the taxpayer-applicant (1 original)
- Any government-issued ID (both the taxpayer and the authorized representative) (1 photocopy).
IMPORTANT: IDs must be readable, untampered, and contain information that are consistent with the documents presented upon application.
For corporations or non-individual business owners:
- Board Resolution indicating the purpose and the name of the authorized representative (1 original) or the Secretary’s Certificate (1 original)
- Any government-issued ID of one of the signatories and the authorized representative (1 photocopy)
Steps to Follow
Step 1. At the RDO entrance, get one queue number per business closure application (e.g., get two if you’re processing two closures).
Step 2. Comply with the incomplete requirements, if any, after the BIR Registration Officer’s initial assessment.
Step 3. Wait for the BIR to process your documents. It can take around 2-3 days for the BIR to conduct an audit and check the veracity of your submitted documents.
Step 4. Once the audit is done, you need to comply with the BIR’s findings and pay any deficiency tax, if applicable.
Step 5. You need to wait at least 1 day for the BIR to prepare the business closure report, generate the tax clearance certificate, deregister your business from the BIR list, and issue the BIR tax clearance.
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