This is how I went about my BIR-related concerns. Since RareJob notified us through email last November 2012 on the change of the rate of our withholding tax from 2% to 10%, as evaluated by the BIR, I tried to do some inquiries myself by seeking assistance from RareJob Tutor Fee Group, Tacloban City Hall and Bureau of Internal Revenue. It has come to my knowledge that we need to comply with the following:
1) Secure Occupational Permit from the City Hall
2) Register with the BIR as Taxpayer
Pay Annual Registration Fee to the BIR
3) File and pay monthly percentage tax
4) File and pay quarterly income tax
5) File and pay annual income tax
I have read various comments on our Facebook page regarding the filing of our Annual Income Tax Return (Annual ITR). I already filed mine for the year 2013, last April 13, 2014. The due date every year is April 15. If you inquire at BIR on how to file Annual ITR, they will tell you the same thing that you cannot file your Annual ITR unless you are as self-employed. Some of you might think that you are already registered because you already obtained your BIR TIN. Of course, you do not stop there. For clarification, application for BIR TIN should not be confused with registration as taxpayer.
Feel free to read on the steps I went through. I included photos of my documents for your easy reference. They may consume much of your time once you do the same but it will all be worth in the end.
Step 1: Secure Occupational Permit from your Municipal or City Hall. It is supposed to look like this.
OCCUPATIONAL PERMIT 2014
(Once you renew your occupational permit with the City Hall, they will issue you a new one.)
(Once you renew your occupational permit with the City Hall, they will issue you a new one.)
For cross-reference, I quoted RareJob Tutor Fee's email to me last February 15, 2013 as to my inquiries:
"Being a Professional, obtain your PTR (Professional Tax Receipt) or OPR (Operation Permit Receipt) at the Municipal or City Hall.
This is in lieu of DTI Permit.
PTR is for persons who are PRC licensed like Teachers, Criminologist, e.g and OPR for persons practicing a profession not PRC licensed like tutoring and other services."
As you can see in the photo, this looks like a Mayor's Business Permit. BIR may ask you to secure DTI permit and Mayor's Business Permit, which is more taxing to obtain. Please let them understand that you are 'doing business in the exercise of profession' and what you need is Occupational Permit hence, the Mayor's Business Permit and DTI Permit can be dispensed with.
Your municipal or city hall may require you to obtain the following before you secure your occupational permit:
1) barangay clearance2) police clearance
3) health card
4) Real Property Tax Clearance
5) birth certificate (certified by the NSO)
6) community tax certificate (cedula)
7) filled-up application for occupational permit
8) 2x2 ID pictures
In some jurisdiction, they do not require real property tax clearance.
The list of requirements looks similar to this:
I also attached my application for occupational permit, health card, and RPT clearance.
I did not anymore include barangay clearance, police clearance, cedula, and birth certificate because you already know what they look like.
As to the fees, I paid for the following:
Barangay Clearance P 30.00
Documentary Stamp 15.00
Police Clearance 50.00
Documentary Stamp 15.00
Health Certificate 50.00
Documentary Stamp 15.00
Occupational Permit with
Documentary Stamp 315.00
NSO Birth Certificate 140.00
NSO Birth Certificate
of dependent 140.00
Community Tax Certificate -> I actually forgot how much I paid last 2013. I paid P101 for renewal this year 2014. The amount will be based on your income last year.
The fees and requirements in your municipal and city hall may be different from our city hall because they follow their local ordinance. However the fees and requirements in every BIR RDO are the same because they base the rates of taxes on the National Internal Revenue Code.
Step 2: After obtaining your occupational permit, you are now ready to register as professional with the BIR. The BIR will normally refer you their officer of the day for assessment.
CAVEAT: I wish to warn you to be patient because some of the BIR employees are unfriendly.
In my case, the one who assessed me was a former RareJob Tutor, that is why I was lucky because I did not need to explain anymore the nature of our job. The very accommodating officer of the day assisted me in filling up the following forms:
1) BIR 1901 - Application for Registration
2) BIR 0605 - Payment Form for Annual Registration
Please refer to the following attachments as to how I filled-up BIR 1901 which consists of 2 pages. As you can see, she suggested Simplified Set of Bookkeeping Records as the type of book to be registered because the nature of our job do not require much accounting.
As you can see in page 1 of BIR 1901, we will also be required to file and pay the following taxes:
a) monthly percentage tax (BIR Form 2551M)
b) quarterly income tax (BIR Form 1701Q)
c) annual income tax (BIR Form 1701)
In page 2, I also included my daughter as my dependent for purposes of claiming tax exemption when I file my annual income tax return. The Tax Code provides that the taxpayer is entitled to an exemption of P25,000 for each qualified dependent.
This is how I filled up BIR Form 0605 which is the payment form. (As you can see, the date is January 2014, the one for renewal. I was not able to scan the one I filled-up last year because it is difficult to detach it from the wall. Anyway, you will be filling-up the same form every year, in the same manner.)
Step 3: To obtain your Certificate of Registration, BIR will ask you to submit the following:
1) Filled-up Application for Registration (BIR 1901)
2) Certification Fee of P115
3) NSO Birth Certificate
4) NSO Birth Certificate of dependent - if any
The BIR will schedule you when to claim your Certificate of Registration. It is supposed to look like this.
Step 4: Attend the BIR briefing for taxpayers. In our area, our scheduled briefing is every Thursday. Once you acquire your Certificate of Registration (COR), BIR will also give you this Ask for BIR Receipt poster and they will require you to post this with your COR at your place of establishment. Since we are homebased, BIR will not normally inspect our documents through tax mapping. However, it will be better to comply with the requirements.
Step 5: Register your Book of Accounts. Here is how I filled up my Simplified Set of Bookkeeping Records in the cover page and 1st page.
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This is also how I filled-up my entries. As you can see, the nature of our job do not require much accounting.
Step 6: You will also be required to issue receipts. First, you need to fill-up Authority to Print Receipts and Invoices. It looks like this.
ftp://ftp.bir.gov.ph/webadmin1/pdf/21411906%20mar%202013%20encs.pdf
I am really sorry that I was not able to attach my copy to show you how I filled-up the form. This form is available at the printing press of your choice. I suggest that you look for a printing press that can print very few booklets. I paid P900 for 4 booklets, although I will not be able to consume the booklets good for 5 years since because the nature of our job will require us to issue receipts once a month only.
I am sure that you also wonder how come we are required to issue receipts and to whom do we issue receipts. I know that you ask this question, considering that we teach Japanese students who pay RareJob, hence we presume that RareJob already issued them receipts.
To answer your question: Under the Tax Code, all persons subject to internal revenue tax are required to issue an invoice for each sale of goods and an official receipt (OR) for services rendered valued at P25.00 or more. Even though we earn peanuts, we are required to issue receipts to RareJob Incorp. for the sale of goods (services we render to them). Of course, we earn more than P25.00 for our tutoring services, and we will issue receipt to RareJob, Inc. because RareJob Inc. is the one that pays us. Hence, we do not issue receipt to our Japanese students because they obtain receipt from RareJob, the company which they pay. Here is how I filled-up my receipts.
Step 7: Register with BIR EFPS (E-Filing Payment System). Registering with EFPS is actually optional to the taxpayer, however, it is highly encouraged by the BIR. Once you register with BIR EFPS, they will give a certificate which looks like this:
I believe that some of us are not full-time tutors. Some of us work in the office from 8 to 5 and some of us are full-time students. In my case, I experienced the hassle of going to the bank just to pay my monthly percentage tax. Ever since I registered with EFPS, filing and paying percentage taxes became convenient because it saves me time from travelling to the bank. It also saves me time from filling up the form and computing manually.
So my blog ends in here and I hope that I am able to help you with BIR-registration and other related concerns.
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