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How To Register With the BIR As Self Employed Professional, Freelancer, or Consultant

The question that hounds online freelancers, aspiring self-employed professionals (without a PRC license), and consultants is this: "How do I register with the Bureau of Internal Revenue?" or, "How do I pay my taxes". etc.

As an SEO/Online Marketing Consultant for an Australian firm, these same questions disturbed me for WEEKS. It's because I have absolutely NO IDEA how to approach BIR and register myself as an individual taxpayer and be eligible to pay my own taxes.

You're about to find out how I got my Certificate of Registration from the BIR in just 2 hours and 15 minutes!

Before I show you the EXACT process I went through to register, let me credit two important resources on the internet which provided me good information on how to register with the BIR as self employed. The first is this blog post from Three Things Baby and the other one is from Freelancepinoy.com.

The info within the above resources has been very helpful. However, my registration experience with the BIR has been slightly different. HERE IS HOW I DID IT, STEP BY STEP:

FIRST PHASE -- "THE PREPARATION"

Step 1:  Know Your RDO Number/Code

Do not leave this to chance. It's very important! Your RDO (Revenue District Office) is where you are registered as a taxpayer. This doesn't necessarily mean the closest BIR office to your house, but sometimes this is the case.

That's why YOU NEED TO MAKE SURE.

Call 981-8888, which is the BIR Hotline. There is a commercial ad just before the voice prompt. As soon as you hear a live human being on the line, just ask:

"Hi I just want to verify kung saang RDO ako currently registered. My TIN # is__________"

Make sure you ask where you are currently registered. Some people ask "what is the nearest RDO closest to my house.."..etc. This is wrong, as they will simply give you the nearest RDO. You have to know where you are registered exactly.

NOTE: If you don't have an existing TIN, just skip this step. If your RDO is located out of town, I'm sorry...you have to go there, and request to transfer to an RDO that is closer to your location -- by filling up the BIR Form 1905.

Step 2:  Prepare the required forms and documents

Here's what I prepared:

1. BIR Form 1901 - Print at least two (2) original copies. This is the registration form for professionals, sole proprietors, estates and trusts. Make sure you cross out the box "professional" as it is the one that applies more to your online occupation.

2. Existing Contract With A Client - The BIR officer referred to this as a "company certificate". This is any written agreement you have with a client of yours, which states that you are working for them on a consultant/freelancer basis. If you don't have any contract, I guess you need to request this from your client.

3. Birth Certificate and Any Proof of The Nature of Your Work - In the absence of a company certificate, you need to show any other proof of your status as an independent freelancer. Birth certificate would help establish your identity (although I prepared this, my RDO did not request this from me, surprisingly!). As for proof, you can show them any email, online job offer, or written terms of your agreement with a client.

4. Proof of Billing Address - This could be a Meralco bill, credit card bill, or internet post paid bill. Barangay clearance would also be accepted.

5. BIR Form 0605 - This is the payment form. Print three (3) original copies.

SECOND PHASE -- "THE ACTUAL VISIT"

Now that you have your documentary requirements, put on your battle gear and visit your RDO. Attack! Follow these steps:

Step 1: Go to your RDO at 8:30 am or earlier!

Do yourself a big big favor. Avoid going to BIR at noon. Be very early.

Also, avoid dates like the 25th of the month (filing of VAT returns) and 20th (filing of percentage tax returns), as the BIR hall will be very full packed.

Step 2: Go straight to the OFFICER OF THE DAY and show your 1901

Instead of asking the guard, numbering system personnel, and other random BIR staff, go straight to the officer of the day!

The officer of the day is the one that ANSWERS QUESTIONS FOR CONFUSED INDIVIDUALS like us.

The officer is also the one who will assess your application and recommend the proper tax types.

I suggest this: Bring all your requirements, fill out your forms in advance, then approach the officer of the day. Ask something like this:

"Hello magpaparegister po as self-employed professional, form 1901."

Make sure you use the word SELF EMPLOYED PROFESSIONAL. That is the phrase they understand. They don't understand freelancer, home based, online editor, internet marketing, etc.

At this point, they will probably ask: "May business name ka na?"

You have to quickly and constructively DISMISS that notion. I said something like this:

"No I don't have a business name po. I work independently po as a CONSULTANT and yung work ko po is online based (insert your line of work here -- writer, marketing, blogging, etc). Gusto ko po magfile ng taxes kase wala akong employer, client lang."

The keywords are: 1) no business name, 2) independent, 3) consultant, 4) online based 5) walang employer, 6) may CLIENT

This way, they will know what tax category you are in.

Step 3: Request the Officer to check/fill out any boxes in the 1901 and 0605 which you might have missed

The officer of the day is your friend. He/she will correct your form 1901 and 0605, verify your documents, and let you know of the next step:

Step 4: TIN Verification

I was asked to get a number, then go to Counter 1 for "Tin Issuance". Just tell the person behind the counter: "For TIN verification daw sir". Then give your accomplished 1901 form, client contract, and billing statement copy.

"Anong nireregister?"

I said: "Self employed professional / consultant".

*STAMP, click*.

Step 5: Pay the registration fee via Form 0605

Go to an accredited agent bank of the BIR. In my case, I paid the P500 registration at the Landbank branch within the same building of my RDO. If you're not sure where to pay or what to write in the form, ask the officer of the day.

Accomplish the Form 0605 in triplicate. It's just like depositing in a bank.

Step 6: Photocopy your "received" or stamped 1901 and 0605 forms. One copy each. Make it two copies just in case.

Step 7: Return to the guy at TIN Issuance and give your stamped 1901 and 0605, plus your documents/requirements.  If your RDO has a "COR" counter personnel, you can go there instead! He will then compile all your documents, then ask you to buy a documentary stamp tax.

Step 8: Buy documentary stamp (they'll show you where to buy for 15 pesos), then return to the guy/girl at TIN Issuance (or COR counter, if your RDO has it). After stamping and compiling, he will then endorse your application to another staff who will then be in charge of printing your Certificate of Registration (Form 2303).

When you see your application being endorsed for printing, rejoice!!

THIRD PHASE -- ACCOUNTING BOOKS and AUTHORITY TO PRINT

After half an hour of waiting, the Certificate of Registration (COR) will be released (that is, if you have a cool RDO like mine). 

Along with the COR, you will receive an "Ask for Receipt" signboard and a taxpayer's guide. The next steps after receiving the COR are these:

STEP 1: Go to the Counter where they serve "Books of Accounts". Show them your COR. They will then recommend what accounting books do you need based on your tax type. Don't hesitate to BUY their recommendation on the spot. Sure it's somewhat more expensive than the accounting books in the National Bookstore, but it helps you know what type of columnars they require. You are a first timer. So you need to go by the basic rules. :) They will then stamp/sign the books, which means, you are now authorized to use them.

STEP 2: Go to the counter where they serve "Authority to Print (ATP)". Request for BIR Form 1906. This is an application for printing of invoices or receipts. This is easy to fill up because most of the required fields are in the COR anyway. Upon filling out the ATP form, ask the counter personnel if he/she knows a good printer (printer as in, a BIR accredited person or company that prints invoices/receipts). 99.9% of the time, the personnel will say YES and fill out the remaining part of the 1906 for you. They will ask you to write your contact info at the bottom of the form 1906 so they can call you when your receipts are ready.

Mind you, the minimum job order is 10 booklets of receipts, which will cost you around Php 1,000 upon pickup of the receipts. So be prepared for this expense!

That's it! You are now registered!

ADDITIONAL TIPS AND GUIDELINES

1. Avoid asking too many "noob" questions. If you ask too much, BIR will think you have no idea what you're doing, and so they will also think your documents and requirements are NOT complete. Instead, ask questions only to proceed to the next step. For example, instead of asking "What should I write on this Form?", just ask "Please verify if I missed anything on the form". Be sure of yourself. 

2. Know if you are VAT or non-VAT. Generally, if your expected gross yearly income is less than Php 1.9 Million, you are non-VAT. That means, you won't pay 12% VAT but you will only pay 3% percentage tax monthly. Moreover, if your income is in dollars, you are VAT exempt.

That being said, good luck on your BIR application! For any questions about registration as self employed, just put in the comments section.

Why exercising individuality takes courage

We hold this truth to be self evident -- that all men (and to avoid sounding sexist -- women) are created UNIQUE. Yet oftentimes, majority of us fail to exercise this uniqueness, because deep seated in human behavior is the desire to conform to the crowd, be just like everybody else, sulk back in a corner, and just agree with whatever universal opinion or culture exists.

first i am thankful that I belong to a free country, where there is freedom of belief or preference, where people cannot be forced to do whatever stuff is being forced them to do. but the sad thing is that despite this freedom, many free people VOLUNTARILY relinquish (or give up) this freedom. Even Christians voluntarily give up this freedom because of fear and want. ---  
I want to fit in. 
I want to to be liked. 
I fear my officemates or classmates will think less of me if i dont do something which they like.
i might get labeled a weirdo if i get too biblical or say, I'm attending a Bible study session tonight.
i might get embarassed if I refuse to get drunk with liquor.
I might be laughed at if I confess I dont believe in premarital sex.
I dont want to be labeled a killjoy, so I'll laugh at a really stupid joke just because everybody's laughing.

anyway, this blog post is not about religion or rules or regulations -- it's about being an individual. what I'm saying is that there is nothing to fear and to be ashamed of by standing up to your personal preferences and beliefs. Because that's an inalienable right and constitutional. because it is honored in a free country.

when you embrace this uniqueness, this individuality, this open confession of being just YOU, then and only then can you have genuine friendships that last for a lifetime.then and only then can you live with yourself, because finally, you can face the world without a mask.

But it takes a lot of courage.

Motivation and Frustration -- the two sides of the coin

i personally think that there are two primary emotions that cause people to act the way they do. one is motivation, and another is frustration. motivation is the force that allows men and women to achieve great heights. it sets them on fire and propels them to heroic fulfillment. this all-needed motivation stems from various sources, but the strongest kind of it springs from the thought and prospect of achieving the impossible. put the sleepy, timid and wandering soul in front of a seemingly insurmountable task and fire his desire that it can be done (though it has never been done before), and the fire will be ignited, hope will spring eternal, miracles will happen...

on the other hand, there is such a thing as frustration, and this one stems from the realization that the impossible cannot be done by individual human effort alone. the motivated person may be fired up to achieve the impossible, he may be the greatest optimist who has walked this earth, but when the limitation on human ability finally becomes apparent and one realizes it, the acquired strength from strong motivation can turn into an equally strong (or stronger) frustration..

the key, then, is to understand the two sides of the coin. for if you dwell only on the heads side of motivation, you run the risk of being an idealist, not being wary of your own limitations and always setting expectations that defy gravity, analogous to literally believing that people can fly. but if you dwell on the tails side of frustration, you run the risk of becoming the doom and gloom harbinger that good things, great things CANNOT be done under any circumstance. a frustrated man doesn't see the silver lining, that split second moment of opportunity that makes the seemingly impossible possible. and the path, this writer believes, that leads to achievement of set goals and objectives is one that's unencumbered by unreasonable motivation (daydreaming) and premature frustration (giving up too soon when things might be starting to pick off).

so flip the coin, but never dwell on any one side. Even God is a realist who knows how limited we are, yet performs miracles through vessels of clay. ;) 

by: V. Cutar
10/17/2013
6:33 PM

Thoughts On Opportunity -- (how to spot them and grab them)

as a web marketer, i had the lucky privilege of working with a startup company, from the first day of its operations up to its present stage of nationwide growth. when I decided to make the decision to commit myself to a fledgling firm, not a few people began to show concern on whether I was making the right call, simply because the instant thing that comes to mind is the possibility of failure for startup companies. is this concern valid?

i believe the fear of being involved in a startup company arises from man's subtle need to be part of something big. we all despise being "just a face in the crowd" but deep inside we are programmed to follow institutions and well established systems. we are often "wowed" at the sight of huge organizations and our herd mentality instantly identifies with those who are part of something big.

my personal view, however, is that the bigger the organization, the more institutionalized you become. the more institutionalized you become, the less you think for yourself (because the system and structure thinks on your behalf). the more you become a mindless zombie, the less potential you exert and the less fulfillment you feel.

let me assert that fledgling organizations are the cradle of multi-talented people. this is because the people who are part of such enterprises operate on a higher work ethic. they don't work for prestige. they don't work just for money. they don't do things just because the system told them to do so. Instead they operate on initiative because they already understand the rules of the game. their level of business acumen is not too far behind their genius business owner, and they strive to build the business AS IF they are stakeholders of the enterprise. high level employees turned businessmen that come to mind are Michael Dell, the late Steve Jobs, WARREN BUFFETT, the list goes on and on!

furthermore, people who commit themselves to a startup enterprise have the world's greatest quality --  HOPE. In effect they also get to enjoy the world's greatest benefit -- FREEDOM. when they have the freedom to express their individuality in the workplace, they also radiate the world's best attitude - LOYALTY. look at all the succesful people who ever walked this earth, and you'll find that they are the ones with hope, freedom and loyalty.

most people fail to realize a true opportunity when they see it. a real opportunity is something you can grab almost without hesitation, because the potential for success is so great and you have the privilege to be part of that major move when it finally happens. as a trader and investor of stock securities in my off-hours, I learned this valuable lesson of sticking with the not too popular but has the strongest potential for growth. this, in my opinion, is the best kind of opportunity that any man or woman can take.

by: v.cutar
10/10/2013

REPOST: Employment Law About Social Media At Work

There has been a huge upswing in employees' use of networking media such as FaceboOK, LinkedIn, Twitter, Youtube etc.

Some of these sites present marketing opportunities for businesses, but there can be down sides. The production hours lost can be serious. Additionally, employees' use of the media to make disparaging remarks about their employer creating negative perceptions can cause pain and damage. Once posted on the internet, the comments are then in the public domain. And there is the cost of internet bandwidth consumed.

If Employers fail to put a policy in place forbidding such behaviour (in either the employment agreement or an employee handboOK) and bring it to the Employee's attention, there will be weak justification for taking disciplinary action against the employee concerned. Correct procedure may not be enough. We recommend a policy and a sign off as well.

A typical policy would contain at the least the following:

Set the Company's Overall Policy e.g. The Employer's computers/devices for business use only otherwise written approval required and the Employee must comply with all policies and procedures.

The Company's Position on:

Personal use of the Employer's computers, communications or mobile storage devices, email, internet is prohibited, without the Employer's prior written approval.
Connection of non-work devices to network
Statement that usage is monitored.
Software download policy statement
Restrictions on updating computer configurations
Unauthorised and/or inappropriate or illegal email /browsing/other communication /risk of introducing viruses etc
Passwords privacy policy
Unlawful copying, downloading, uploading, or file sharing any licenced or copyright protected software or material

While it is relatively OK for some employers to have their staff checking their social accounts during office hours, there are specific industries wherein this habit can impede overall productivity. For example, if a person is working in the accounting department, it is necessary to stay focused with balancing the calculations on an ongoing basis. Having a divided attention can lead to lots of human errors and compromise the integrity of financial statements. People who are working in the technical support field should also be on the loOKout for new issues and tickets that are forwarded to them, and so they should not be checking any personal social media accounts during work hours. As a general rule, the lunchbreak is a good time to log on to FaceboOK and personal emails just to check for messages, but is never ethical to aggressively use social accounts when in the office.

This article was originally published from:  http://www.employers.co.nz

Exclusive viral photo / movie marathon cut short / jogging plans

Good morning! Finally had a chance to post again here on my long lost blog. I think I've spent more time the past few months writing in other people's websites that I barely have time to write on mine.

Anyway, as I write this it's March 3, 2013, and it's 1:03 in the morning. I'm lying down on my bed, which is spread right on the floor in front of my laptop...I have an ear muff, err...white ear plug..whatever you call it, and it's pretty snug here  if you ask me. If you're finding it hard to visualize me in this state, here's a live photo to illustrate:

I took this photo about 30 seconds ago. Probably got tired at looking at my old blog posts which contains zero pics. Might as well utilise Bluetooth while it's still not obsolete. (Next time, I'll try to post more meanigful pics than this one though. :) ).

So What's Up

It's a weekend now and obviously I'm away from my busy office life, basically just doing nothing. I was scouting for some new Gospel songs earlier to teach to our choir, then I ended up watching some boxing videos, then in an effort to fall asleep, attempted to watch Jango Unchained, but my attention span tonight isn't much to finish a 3 hour film.

So there, I finally resorted to this blog post, and that's how you got stuck here. ;)

Jogging Plans

Earlier today after looking at my chubby face and abs, I finally had an inkling to go jogging again. Plans to dominate the Malacanang jogging space instantly came to mind. I was hoping to begin tomorrow (or technically, later..which is Sunday morning).

This probably came as a direct result of watching the Rocky Balboa movies again. Oh no.

Plans are now set! But reality sinks in...is jogging a joke or a reality? Probably the former, but let's see. ;)

You Fell Into The Trap

So obviously, this post appeared like I was about to say something, but now you can;t escape the fact that I have nothing to say tonight and I'm just bored and I posted that pic to invade your personal life and that this blog post is just an effort to kill time and will probably won't make it viral in cyber space but the thing is I am sleepy now and this blog post served it's purpose well of lulling me to sleep and I hope it did for you too.........

Talk to you again in a few months!!! :)