Have you registered and file tax as a freelancer? So now you’re a freelancer! You’ve worked with clients, figured out your timings, and set up an entire routine to optimize your workflow better than ever. It’s freeing! It’s great! But do you know how to pay your taxes?
As freeing as freelancing is, paying taxes is an aspect you shouldn’t procrastinate on. That mindset would likely come back to harm you in the future. Filing tax registration is an exhausting process. And if you don’t start early, you’ll probably find yourself confused with all the paperwork and leg work.
But we understand if you haven’t started researching yet. After all, with all the time you’ll spend studying, you’ll probably want to take that time to focus on your business!
That’s why we at FVA Consultancy Corporation and our affiliate GrowApp Philippines are here to make your lives easier.
We’re here to explain to you the process of how to file tax as a freelancer. This is the first of the three series: How to Register and File Tax as a Freelancer.
Now, let’s start at the beginning: Business Registration, or the process of registering as a taxpayer.
But first, why should you register?
Filing for Tax registration as a self-employed individual generally makes your work life easier. Being a taxpayer makes the process of loans and transactions smoother. You can also legitimize your work in many ways, especially when you’ll be able to issue receipts or invoices. If you so desire, you are also able to trademark names for your business. Finally, you can rest easy knowing that you’re doing your due diligence to help your country’s economy by paying your taxes.
Let’s list down those points one by one:
- Easier loans and transactions
- Issue receipts and invoices
- Trademark names
- Contribute to your country’s economy
These reasons are most relevant when your freelancing career is growing. One of which is the ability to issue receipts and invoices to make your clients take you more seriously. Additionally, having hassle-free loans and transactions ensures your job is done faster.
Filing for Tax gives you amenities that you need when doing business in the country. And since our goal as freelancers is to optimize our workflow, registering for Tax only helps us further.
Now that you’re set on registering let’s move on to what documents you need to prepare.
Moving on to the documents
This is the part that can be challenging. Registering for any government-related service usually comes with plenty of paperwork and digging through old files. It can be a confusing, messy, and inconvenient process, especially when you don’t know where to start.
But we’ll keep this simple. You only need nine documents to register for your Tax. We’ll tell you what they are and where you can find them:
1. TIN Number
If you’ve been employed before, chances are you already have a TIN. Otherwise, you can request it from the BIR.
2. Birth Certificate
3. Valid Government ID (2 preferably)
You need two and valid ones. Generally, a passport and driver’s license would be the most convenient.
4. Barangay Certification
This proves that the address that you’re registering yourself in is accurate.
5. PRC ID (if applicable)
For engineers or architects, a PRC ID is needed.
6. Professional or Occupational Receipts
Professional Receipts are for PRC holders. Otherwise, get Occupational Receipts. You can find these from your local treasury office in your local City Hall.
7. BIR 1901 (BIR Application Form)
8. BIR 0605 (BIT Registration Form)
9. BIR 1905 (if changing RDO)
You can find these final three at the BIR. Kindly take note: If you’ve registered at a different RDO in the past. Still, you’re currently located somewhere else, and you have to change your registered RDO to your current location. You need to go to your previous RDO, secure clearances (penalties and fees), sign off, and transfer to your desired RDO. Once you’ve submitted this form, you then wait for 5 to 45 business days.
Roughly, you would be required to spend a minimum of PHP3,000 in total for the registration process. This would cover payments, fees, printing, etc.
Once you’ve submitted it, you’re all done! You’ve collected nine documents, submitted them to your nearest RDO, and then you now have to wait for 5 to 45 business days.
There you have it! Now you know the reasons, requirements, and steps for registering to be a taxpayer. You’re aware that being one makes your freelancing life more convenient. Additionally, you know that in about nine documents, PHP3,000.00, and a waiting period of up to 45 days, you’ll be a registered taxpayer! You would then be free to enjoy your amenities as one.
We’ve learned about registration look forward to our next post in this series: Filing Taxes.
GrowApp PH consists of a team of accounts and consultants who help you with BIR, DTI, and LGU registrations. They offer to do the paperwork and legwork so you can focus on growing your business. Find them at GrowApp.PH or their Facebook page.
For further information, you can find an FB Live video with GrowApp’s very own Giel Nocon talking about this exact subject here.