As freelancers, it’s important for us to pay our taxes. Why? VISA Application, Credit Card application, HMO Application, Loans, etc. will all ask for your Tax Forms (1701Q or 1701). Plus it makes it easier for us to give receipts to clients that could help us bag potentially bigger ones in the future.
How do you apply for it? Granted it may be confusing and overwhelming at first, this is the easiest way we found you could apply.
For Professionals (Freelancers)
These can be Blog writers, Virtual assistants, Graphics designers, Photographers, etc.
Step 1: Secure a Tax Identification Number (TIN)
Important! You are only legally allowed to own one TIN number. If you have a previous job, your company should have secured one for you. This is the same number you should be using all throughout. If you don’t have a TIN number yet, you can secure one by applying for it. All you will need is form 1901.
Step 2: Prepare the necessary requirements
NSO Birth Certificate
Professional Tax Receipt (PTR – for licensed professions under the Philippine Regulatory Commission) or Occupational Tax Receipt (OTR – for professions where PTR is not required.) from the Barangay
DTI certificate of the business name (optional but not required)
Step 3: Obtain BIR form 1901 and submit it with the other requirements above.
Step 4: Pay the annual fee of P500.00 through partner banks
Step 5: Submit the documents and they will ask you to pay a total of P30 for the certification fee and documentary stamp tax
Step 6: Attend the taxpayer’s briefing for new registrants to be conducted by the RDO
Step 7: After the talk, you will be given Form 2303 and the “Ask for Receipt” notice. Also an Authority to Print (ATP), and Books of Accounts which you will need in order to print out your Official Receipt booklets.
Step 8: Once you have your official receipts printed you would need to have them stamped by the BIR.
Form downloadable at bir.gov.ph
The difference between a sole proprietor and a freelancer is the sole proprietor offers goods while the freelancer/professional offers services. If you’re a sole proprietor you will need to do the ff steps:
Step 1: Register your business name with DTI
Step 2: Get a barangay clearance in the barangay your business is located in.
Step 3: Go to the Municipal Hall / City Hall (LGU) and fill up an application form and submit it together with your DTI Certificate, Barangay Business Clearance two valid IDs, and proof of address such as Contract of Lease or Certificate of Land Title.
Step 4: Here, you also have to secure licenses and permits from the Municipal Health Office, Bureau of Fire and Protection, Municipal Planning & Development Coordinator, and Office of the Municipal Engineer.
Step 5: Head to BIR and register your business. Fill up the BIR Form 1901 and pay the 500 annual registration fee to authorized agent bank using BIR Form 0605.
Step 6: You will now have your BIR Certificate of Registration (BIR Form 2303), Notice to the Public “Ask for Receipt” signage, and Stamped annual registration fee for the current year (BIR Form 0605).
Step 7: Then it’s time to print out your official receipts and have them stamped by the BIR.
Some Important Notes
Your TIN should be registered in the RDO nearest to your place of business. If it’s at your home (being a freelancer) then change the address to your home address. To do this simply fill out form 1905 and submit it to BIR. They can change it right away once you submit this form.
For freelancers, they may also ask for a COE (Client Contract of Certificate of Employment). If you’re working with websites like Upwork, they can provide this to you once you request it. Alternatively, if you already have an existing client, they can also provide this for you.