How to Register as an Online Seller in the Philippines with the BIR

If you're earning income through selling goods or services online or in a physical store, it's mandatory to register with the Bureau of Internal Revenue (BIR). Failure to comply may lead to penalties and even criminal charges for tax evasion. The BIR has been clear about these tax obligations since the rise of online transactions in the late 2000s, with several revenue rulings issued over the years to guide online sellers on their tax compliance requirements.

Key BIR Regulations for Online Sellers

1. Revenue Memorandum Circular (RMC) No. 55-2013 clarified the tax obligations of online sellers.
2. Revenue Regulation (RR) No. 16-2023, issued in December 2023, emphasized the need for online sellers to register with the BIR, requiring online platforms (like Lazada, Shopee) and digital financial service providers (DFSPs) like GCash and Maya to withhold taxes on gross remittances to their users.
3. RMC No. 8-2024, released in January 2024, provided additional clarifications on the implementation of RR 16-2023, mandating online platforms to start withholding taxes within 90 days of its publication.
4. RMC No. 55-2024, published in April 2024, extended the implementation of the withholding tax requirement to July 14, 2024.

Starting July 15, 2024, online platforms and DFSPs will strictly enforce this regulation, allowing only registered sellers to continue using their services. If you haven't registered yet, here's how you can do it:

Steps to Register as an Online Seller with the BIR

1. Prepare the Required Documents

Before you start your registration process, gather the following documents as outlined in the latest BIR issuance, RMC No. 27-2024:

• BIR Form 1901: Fill out the taxpayer information. If submitting physically, prepare two printed copies. For online submissions, use the BIR's Online Registration and Update System (ORUS).
• Valid Government ID: The ID should display your name, birthdate, and address. If your ID lacks an address, include proof of address (e.g., utility bills).
• Invoice and Receipt Documents:
  • BIR Form 1906 (for Authority to Print Invoices and Receipts)
  • Sample copy of your invoice/receipt design
  • Documents from a BIR-accredited printer (if applicable)
• Books of Accounts:
  • BIR Form 1905 (for registering books of accounts)
  • General journal and ledger books (if starting with manual books)
• Special Power of Attorney (SPA) and ID of an authorized representative, if someone else is processing the registration on your behalf.
• Additional Requirements:
  • DTI Certificate (if using a business trade name)
  • Work visa (if you’re a foreign national)
  • Special permits for certain types of businesses (e.g., BMBE, PEZA)

2. Submit Your Registration Application

You can register either physically at the BIR Revenue District Office (RDO) or online via ORUS:

• For Physical Submissions: Bring two printed copies of all required documents.
• For Online Submissions: Follow the steps on the ORUS platform, encoding your details and uploading scanned copies of the documents.

Once approved, the BIR will issue you a BIR Form 2303 – Certificate of Registration (COR), which must be displayed on your business premises or uploaded to your online selling platform profiles (e.g., Lazada, Shopee).

3. Apply for Authority to Print (ATP) Invoices and Receipts

After obtaining your COR, you’ll need to apply for the authority to print sales invoices and receipts using BIR Form 1906:

• Physical Submission: Prepare two printed copies of the required documents.
• Online Submission: Complete the steps in the ORUS platform.

Alternatively, you can purchase pre-printed invoices and receipts from your BIR RDO.

4. Register Your Books of Accounts

Registering your books of accounts is essential. For manual books, prepare columnar books (like general journal and ledger) which you can buy at office supply stores:

• Start with manual books for simplicity, then consider upgrading to loose-leaf or computerized books later.
• Submit applications either physically or online through ORUS.

5. Submit a Notarized Sworn Declaration (if applicable)

According to RR No. 16-2023 and RMC No. 8-2024, online sellers on platforms like Lazada and Shopee are now subject to withholding tax on gross remittances unless their annual income is below ₱500,000. To be exempted, submit a notarized sworn declaration to both the BIR and the platforms.

Important Notes

• Ensure compliance to avoid penalties. With the upcoming enforcement of these regulations, platforms may limit or deny access to unregistered sellers starting July 15, 2024.
• If your business earns less than ₱500,000 annually, make sure to file a sworn declaration to claim your exemption.
• Registering with the BIR not only keeps you compliant but also builds trust with customers and partners.

By following these steps, you'll be well-prepared to meet the BIR’s requirements as an online seller, allowing you to focus on growing your business without worrying about tax compliance issues.

For further assistance, you may contact the BIR or consult with a tax professional.