How to Register as Individual Online Seller in BIR?

Any person that earns by selling goods or services, in any mode, whether online or physical store, must register in the Bureau of Internal Revenue (BIR), file and pay taxes, including submission of any required attachments.

Not registering and later discovered by the BIR may result in paying penalties and possible criminal case of tax evasion.

This tax law exists and is clear ever since, and since the rise of online transactions in late 2000s, there have been a couple of BIR revenue rulings issued to clarify the registration and tax compliance requirements of those engaged in online transactions.

Such us in 2013, the BIR released Revenue Memorandum Circular (RMC) No. 55-2013, to address and clarify online seller’s registration and tax compliance obligations.

Since MPM started in 2011, we have been publishing articles to guide individuals who are engaged in business or self-employment how to register in the BIR such as this article written in 2013, How to Register a Sole Proprietor Business in the Philippines?

This article will be an updated guide with emphasis on Online Sellers and the Bureau of Internal Revenue (BIR).

Recently, in December 2023, the BIR released Revenue Regulation (RR) No. 16-2023, to emphasize again and push online sellers to register. This time by requiring online platforms, such as Lazada, Shopee, etc., and digital financial service providers (DFSP), such as Maya, GCash, etc., to do withholding of taxes on gross remittances made on platforms and remitted to their users which are the online sellers (merchants).

With RR No. 16-2023, online sellers are now left with no choice but to register in the BIR otherwise they will no longer be able to sell or use these online platforms, if not entirely but will be limited to do so, especially once RR 16-2023 will be in full implementation this July 15, 2024.

On January 15, 2024, the BIR released Revenue Memorandum Circular (RMC) No. 8-2024, to provide more clarifications on how RR 16-2023 will be implemented. It was made clear that online platforms should start withholding tax on gross remittances 90 days after the publication of RR 8-2024, which is estimated to be last April 15, 2024. It also clarified that the digital platform and digital financial service providers (DFSP) must mandate all the online sellers or merchants using their platforms to register in BIR and provide a copy of their BIR Form 2303 – Certificate of Registration (COR).

However, on April 15, 2024, the BIR released RMC 55-2024 to extend the deadline of implementation with additional 90 days or until July 14, 2024. As such, beginning July 15, 2024, digital platforms and DFSP will now strictly implement that only those merchants who submitted proof of registration with the BIR can continue using their online platforms as merchants or online sellers.

If you’re not yet registered until now, this article is for you so you can register on or before July 14, 2024.

Although the title of this article mentions individual online sellers more specifically, the requirements and procedures I’ll mention below also apply to other types of self-employed individuals.

As a guide, based on the recent Revenue Memorandum Circular (RMC) No. 27-2024 CDR Form F1101 – Application for Registrations for Self-Employed, the following are covered in the definition of Self-Employed Individuals:

• Sole Proprietor
• Professionals regulated by PRC such as accountants, doctors, dentists, lawyers, engineers, architects, teachers, real estate agents, nurses, etc.
• Professionals not regulated by PRC such as artists, directors, freelancers.
• Mixed Income Earners which are employed but also engaged in business and self-employment on the side.
• Job Order
• Service Contract Agreement
• Online Seller
• Vlogger and Blogger
• Online Streamer
• Social Media Influencer
• YouTuber
• Content creator
• Other Self-Employed

How to Register in BIR as Online Seller and Other Self-Employed Individual?

If you’re ready to register as self-employed individual engaged in online selling or as enumerated above, here are the basic steps in registering in BIR:

1) Prepare the required documents

Before you start submitting and processing your application for registration in the BIR, prepare and complete the required documents.

Based on the latest issuance of the BIR, RMC 27-2024 with Annex CDR Form F1101, the required documents are as follows:

a. Filled-out taxpayer information in BIR Form 1901

If physical application via BIR RDO, print the filled-up BIR Form 1901 in 2 copies.

If an online application via BIR ORUS, encode your information and follow the registration steps in the online platform.

ORUS is BIR’s Online Registration and Update System. It’s a web-based system where you can do primary and secondary registration including any updates with the BIR.

b. Valid Government ID

The ID must show Name, Birthdate, and Address.

If there’s no address in the valid government ID, submit additional proof of address.

c. Prepare documents for Invoice and/or Receipt application

If you print your own invoice and receipt design, prepare the following documents:

• Filled-out BIR Form 1906 – Authority to Print Invoice and Receipt
• Sample printed copy of the invoice and receipt design
• BIR Accredited Printer Documents

Alternatively, you may avail the printing services, or a buy a printed invoice and receipt, from the BIR RDO’s New Business Registration Counter.

I will give more details in applying for invoice and receipt later in this article.

d. Prepare documents for Books of Accounts registration

There are several options in registering books of accounts, but I’m sharing here the easiest one to register, which is the manual books. For ease of registration, you may apply for manual books first and then later shift and apply for the other options, such as loose-leaf and computerized.

To register manual books of accounts, prepare the following:

• Filled-up BIR Form 1905 – Application for Update
• Columnar Books such as journals and ledgers

I will give more details in registering manual books of accounts later in this article.

e. Special Power of Attorney and Valid ID of Authorized Representative, if applicable

If you will ask someone else to physically process your application for registration in the BIR RDO, prepare the following documents:

• Valid ID of the authorized representative
• Notarized Special Power of Attorney (SPA)

f. Additional requirements for those availing special laws or if applicable

For those availing special laws, or if applicable, additional requirements may apply as follows:

• If with business trade name, photocopy of the DTI Certificate
• If you are a foreign national, photocopy of the work visa.
• If under Job Order or Service Contract Agreement, photocopy of the contract.
• If common carriers, photocopy of the franchise documents.
• If Barangay Micro Business Enterprise (BMBE), photocopy of the Certificate of Authority
• If BOI, PEZA, BCDA, TIEZA/TEZA, SBMA etc., photocopy of the proof of registration or permit to operate.

2) Submit your application for registration

Once the required documents are ready and complete, you can now submit your application physically via BIR RDO or via online in BIR’s ORUS platform.

If you submit application physically via BIR RDO, bring printed 2 copies of the required documents mentioned above.

If you submit online, you may need to encode the details and upload scanned copies of the required documents. At the same time, follow the steps in the online platform.

Once you complete this step, and the BIR accepts your submitted application and documents, they will issue you a BIR Form 2303 – Certificate of Registration (COR). This will be your proof of registration in BIR which you need to display in your business premises.

If you are an online seller, you may need to upload and show your COR in your profile in the platform where you are selling like Lazada, Shopee, TikTok, Facebook, Instagram, etc., or display the COR in your website.

3) Register your Invoice and Receipt

Once you got your BIR Form 2303 – COR, the next step is to apply for an Authority to Print (ATP) Invoice and Receipt.

Invoice is a mandatory primary sales document you will issue to your customer as proof of sales. Receipt, on the other hand, is an optional supplementary sales document you will issue to customer or to the online platforms as proof of collection and remittance, in cases of sales on credit or sale via online platforms.

You need to register both invoice and receipt in the BIR. Issuing an invoice and receipt that is not registered in the BIR may result in payment of penalty and possible imprisonment.

To register such invoice and receipt, you can submit your Application for Authority to Print Invoice and Receipt (BIR Form 1906) physically via BIR RDO or online via ORUS.

If physical submission via BIR RDO, prepare and submit the following documents in 2 copies:

• Filled-out BIR Form 1906 – Authority to Print Invoice and Receipt
• Sample printed copy of the invoice and receipt design
• Accredited Printer Documents

But as mentioned earlier, there’s available BIR Printed Invoice and Receipt available in the RDO you can buy to forego applying for another ATP Invoice.

If online submission via ORUS, follow the procedure and documents required to be submitted in ORUS. 

For the checklist, you may refer to RMC 27-2024 CDR F1106 click here.

4) Register your Books of Accounts

Another important registration you shouldn’t miss is registering your books of accounts.

The required books of accounts are general journal and general ledger. As an option, you may also register special journals such as cash receipt journal, cash disbursement journal, sales journal and purchase journal.

We recommend registering the following books, especially if you will use our MPM Accounting Software Lite or Basic:

• General Journal
• General Ledger
• Cash Receipt Journal
• Cash Disbursement Journal

If you will use MPM Accounting Software Pro, we recommend registering the following:

• General Journal
• General Ledger
• Cash Receipt Journal
• Cash Disbursement Journal
• Sales Journal
• Purchase Journal

As mentioned earlier, we normally recommend registering first a manual book which you can buy in supplies store since it is the easiest and fastest to register in the BIR. Also, it has no annual reportorial compliance. Later, should you wish to change, you may apply for either Loose-leaf or Computerized.

To register manual books, you can submit application physically via BIR RDO or via online in ORUS.

You may refer to RMC 27-2024 CDR F1105B, click here.

5) Submit a Notarized Sworn Declaration to the BIR and Online Platforms, if applicable

Last but not the least, per RR 16-2023 and RMC 8-2024, online sellers selling in online platforms such as Lazada, Shopee, etc. are now subject to creditable withholding tax on gross remittances on sales made from these online platforms. The exemption will be those whose gross remittances annually do not exceed P500,000.

To be exempted, you must meet the following criteria:

• annual gross remittances is P500,000 and less
• submit a BIR received notarized sworn declaration to the online platforms

Failure to submit a sworn declaration, the online platform will withhold on your gross remittances.

The sworn declaration can be found in RMC 8-2024 Annex A, click here.

That is it! I hope this article is helpful for you in registering with the BIR.

For any questions or clarifications, you may leave it in the comment box.

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Once your business is registered to the BIR, you will then need to file your taxes and update your books. You can automate many of these processes using MPM Accounting Software which you can try for free.