Posted on | September 13, 2015 | 1 Comment
Two weeks after returning home from my postgraduate studies in Edinburgh, I decided to sort out my various obligations, starting with updating my registration with the Bureau of Internal Revenue (BIR). The challenge with taxing those in my line of work begins with our field’s novelty. It gets more complicated with individuals like me who have ‘complicated’ occupational histories. I wrote this blog to share my own experience, and hopefully to help others similarly situated. Please go easy with the follow-up questions (should you have any), as I can only answer in my very limited capacity and personal context. It is still best to consult your trusted Certified Public Accountant (CPA), and/or to read the reference statutes or administrative issuances that govern.
To get an idea on what I do, you may view my full curriculum vitae here. In brief, I am a licensed Physician who works as an independent public health consultant that specializes in health systems research. I had to explain my situation in detail to the clerk in charge of receiving my application, because the BIR often assumes that a person has to be registered under a line of business or occupation that is typical of his professional license. They took a while to understand what we do in public health. Apparently the keywords are “health research” and “scientist”.
The process is generally known as application for a “Certificate of Registration”, or COR. You will need the following (bring original copies for presentation and then photocopies for submission):
- BIR form no. 1901 (Application for Registration, November 2014 version), available here;
- NSO birth certificate, can be requested from here;
- PRC license (Physician);
- Professional tax receipt (PTR), available from the Treasury Department of the City/Town Hall where you live (show them your PRC license and then pay the fee ranging from P300 to P500, depending on the LGU, but if you haven’t been paying every January there will be fines); and
- A typewritten and signed “Certification” from the owner of your residence that you have been granted rent-free use of a portion of the property for the purpose of office space. In my case since I live with my parents, they signed this certification. If your business address will be different from your residential address, adjust accordingly. If you are renting office space, you will have to provide your Lease Contract. In any case, also provide a location map/sketch with directions from the nearest highway/main road of your city/town all the way to your residence.
BIR form no. 1901 (the Application for Registration, or “1901” in brief) may look complicated, so let’s go through the spaces in order. (If you are reading this blog post to get guidance as you do your own registration, it would help to have a copy of 1901 with you right now so you won’t get lost.) Where the item is self-explanatory, I won’t add some notes anymore.
- Registering Office – [X] Head Office
- BIR Registration Date – leave this blank.
- Taxpayer Identification Number (TIN) – your TIN, if you already have one. Otherwise, leave this blank.
- RDO Code – leave this blank.
- Taxpayer’s Name – fill in the first line only, since you are an individual.
- Date of Birth
- Place of Birth
- Mother’s Maiden Name
- Father’s Name
- Citizenship – this is your citizenship, not your parents’.
- Other Citizenship
- Identification Details – to simplify things, I just used my PRC ID. Type: PRC ID. Number: your license number. Effective date: the “registration date” indicated on the PRC ID. Expiry date. Issuer: PRC. Place/Country of Issue: Manila.
- Preferred Contact Type
- Local Residence Address
- Business Address – this is the same as my local residence address.
- Foreign Address – write “N/A”.
- Municipality Code – leave this blank.
- Purpose of TIN Application – leave this blank if you already have a TIN. Otherwise, write “registration of business”.
- Taxpayer Type – [X] Professional – In General. This will need some explanation to the clerk; be patient but stand your ground. I explained that I do not see individual patients, and that I am a “researcher” that works by submitting documents to entities like universities, NGOs, etc.
- Primary/Secondary Industries – I only filled in the “Primary” line.Trade/Business Name: your name followed by your professional/academic suffixes. Regulatory body: N/A. Business Registration Number: N/A (I explained that in Paranaque City where I live, the Business Permits and Licensing Office did not require me to register my business based on what I do). Business Registration Date: N/A. PSIC*: 72103 (if they use the updated 2009 codes; “K73140” if they are still using the 1994 codes). PSOC*: 2221. Line of Business/Occupation: Health Systems Research (or alternatively, “Public Health Physician”).
- Facility Details – leave this blank.
- Incentives Details – leave this blank.
- Details of Registration/Accreditation – leave this blank.
- Tax Types** – [X] Income Tax, Form Type 1701, ATC II012; [X] Other Percentage Tax under NIRC, specify: “Exempt from VAT (Sec. 116)”, Form Type 2551M, ATC PT010.
- Registration of Books of Accounts – leave this blank.
- Relationship Name – I left this (up to item 33) blank because I chose to do my registration myself.
- Relationship Type
- TIN of Authorized Representative
- Relationship Start Date
- Address Type
- Preferred Contact Type
- Civil Status – make sure to mark your civil status with an [X] as appropriate because this will matter later on especially in claiming deductions from annual income tax. A qualified dependent child means “a legitimate, illegitimate or legally adopted child chiefly dependent upon and living with the taxpayer, not more than 21 years of age, unmarried and not gainfully employed, or regardless of age, is incapable of self-support because of mental or physical defect” (reference: guidance text of item 41).
- Employment Status of Spouse – fill this in (also items 36 to 40) if you are legally married.
- Claims for Additional Exemption/Premium Deduction… – this will only matter if your combined gross family income (or your own income if you’re single) is no more than P250,000 per year.
- Spouse Name
- Spouse TIN
- Employer’s Name of Spouse
- Employer’s TIN of Spouse
- Name of Qualified Dependent Children
- Type of Multiple Employments – not applicable in my case because I’ve never had an employer.
You may ignore items 44 to 53 as those only apply to individuals who have employers. Consultants like us don’t.
*These are the Philippine Standard Industrial Classification (PSIC, links here for 1994 and here for 2009 – accessed 13 Sep. 2015) and Philippine Standard Occupational Classification (PSOC, link here – accessed 13 Sep. 2015) codes. PSIC 72103 corresponds to “Research and experimental development in health sciences”, which “includes: medical sciences (anatomy, dentistry, medicine, nursing, obstetrics, optometry, osteopathy, pharmacy, physiotherapy, public health, etc.)”. PSOC 2221 corresponds to “Physician”, as well as “Physician, public health”.
**According to the 2004 Handbook on Alphanumeric Tax Codes (ATC) of Revenue Sources (link here, accessed 13 September 2015). Note that if your gross sales or receipts will exceed P1,919,500 you will have to mark [X] Value-Added Tax instead of [X] Other Percentage Tax under NIRC.
My Revenue District Office (RDO) is Paranaque (RDO Code 052). This will also be your RDO if, like me, you live in Paranaque City. The pointers I will give as part of this section on the process flow are specific to my RDO, so if you’re not from Paranaque you will have to find out the process in your own RDO (you may look for your RDO in this list).
- BIR RDO 52 (Paranaque City) is marked on this Google Map. There is limited/no parking at the building. Upon entry, sign in with the guard as a visitor. Purpose is “COR”, venue is 2nd floor.
- Go up to the 2nd floor. There will be a big lobby with a long counter. As you enter the door, get a number from the computer queue. Note: the monitor is NOT a touch-screen; there is a mouse underneath. Click on Counter 2 (COR). Get your number, and then wait for it to be called. While waiting, fill in a verification slip (available here) if you already have a TIN from before. Just fill-in the fields “Name of Taxpayer” and “TIN”.
- Once you are called by the COR counter, present all of the requirements discussed earlier, including your filled-in 1901.
- If you already have a TIN from before, the clerk will use the verification slip to check with their system if you have any unpaid taxes or arrears. If you do, you will have to settle these before proceeding with registration. (Sorry, this step is an entire blog post on its own; just ask for guidance from the Officer-of-the-Day or OTD at counter 7 – get a number again.)
- If you have no unpaid taxes or arrears, the clerk will attach a checklist to your 1901 and then staple it together with your documentary requirements. S/he will review them. Be prepared to calmly but firmly answer any questions about the items you wrote, especially item numbers 21 (Primary/Secondary Industries) and 25 (Tax Types). Your answers may be patterned after my explanations above.
- If everything is in order, the clerk will stamp your 1901 as received, and will also stamp a duplicate set (photocopies) for your personal records. Keep this as you will use it to claim your Certificate of Registration (COR) after five working days or so. It will help to ask your RDO for a telephone number that you can call to inquire later on if you can already pick up your COR.
- Using eBIRForms (or alternatively, ask the ‘e-Lounge’ or other designated person for eBIRForms at the RDO for help), generate BIR form no. 0605 (Payment Form) for the purpose of paying ‘RF – yyyy’ (where yyyy is the current year). Photocopy this three times so that you will have four copies. The fee is P500, and you will have to pay this at an authorized agent bank (AAB, list here) within your RDO. The AAB will have its own instructions on how to pay; once done, they will stamp all four copies of your 0605 and then take one or two for their records. Make sure to photocopy the stamped ones that will be given back to you (around 2-3 more copies) as you will need them for later steps.
- At the appointed time (and after checking via phone call first if it’s already ready), pick up your COR.
It does not end there. There are subsequent steps, such as the registration of Books of Account (part 2 of 3) and the printing of Official Receipts (part 3 of 3). (blog entries to be written; please stand by)
[last updated: 22 September 2015]