BIR asks every business for the same basic things: that it is registered, that it records each sale, and that it can show its numbers when asked. Most of the work is a daily habit, not a yearly scramble.
This is a primer, not tax advice. Rules change and depend on how your business is set up, so confirm each point with your accountant or your Revenue District Office (RDO) before you rely on it.
Register before your first sale
Registration comes after your DTI or SEC registration and your mayor's permit, because BIR asks for both.
- The form: Form 1901 for a self-employed individual or sole proprietor, Form 1903 for a corporation or partnership, filed online through ORUS or at your RDO.
- Your Certificate of Registration (Form 2303): it lists the taxes you must file. Display it where you do business.
- Your invoices and books: set both up before the first sale, not after.
Since the Ease of Paying Taxes Act (RA 11976) took effect in 2024, the annual BIR registration fee is gone.
Issue invoices, not official receipts
Under the Ease of Paying Taxes Act, a service business issues an invoice for a sale where it used to issue an official receipt. If you still have unused official receipts, ask your RDO how to use them up or convert them.
- Printed invoices come from a BIR-accredited printer with an authority to print, in serial order.
- Computerized invoices come from a system registered with BIR.
- Each invoice carries your registered name, TIN, and address, the date, what was sold, and the amount. Your printer or system provider knows the full list.
Ask your accountant when an invoice is required for small sales, and what to do when a client pays a deposit now and the balance later.
Keep books of accounts
Books of accounts are your record of money in and out, registered with BIR. They can be manual notebooks, loose-leaf pages, or a computerized system, and your accountant usually keeps them from what you hand over.
What you hand over is what matters. Your accountant can only record what you can show.
Keep the papers behind each number
- Copies of every invoice you issued, in serial order, including any you canceled.
- Supplier invoices for what you buy, such as products, rent, and utilities, issued to your business name and TIN where possible.
- Bank and GCash statements for every business account.
- What you paid your team, including SSS, PhilHealth, and Pag-IBIG contributions.
- A sales list by day and by payment method that agrees with your invoices.
BIR sets how long to keep books and records, and the period changed in 2024. Ask your accountant for the current rule and keep everything at least that long.
Know which returns you file
Your Form 2303 lists the returns you file and how often: usually income tax, and either percentage tax or VAT. An individual whose sales are under the VAT threshold may choose an 8% income tax rate in place of the graduated rates and percentage tax. Whether that suits you depends on your costs, so decide it with your accountant at registration or at the start of the year.
Put every filing deadline in your calendar for the year, with a reminder a week before. A late return costs penalties that a reminder would have saved.
Make the month easy on your accountant
- Record every sale on the day, cash included, with how it was paid.
- Match each day's money against your drawer and your apps. See how to close out the day.
- At month end, match your sales to your statements. See how to reconcile GCash and bank transfer payments.
- Send your accountant the sales list, the statements, the supplier invoices, and your team pay records in one folder.
In Onsuki, every sale is recorded with its payment method and reference, Sales History can send or print a receipt for the client, and End of Day totals each day by method. Reports, such as Sales and Transaction Detail, export as a CSV for your accountant. Onsuki's receipts and invoices are records of the sale for you and your client; issue your BIR-registered invoice alongside them as your accountant sets up. See Reports.
