Taxpayer's Obligation to Register with the BIR Arises Upon the Commencement of the Business

April 29, 1991 BIR RULING NO. 075-91 107 237 000 075-91 Gentlemen : This refers to your letter dated July 23, 1990 requesting a clarification if there is any particular provision in the Tax Code and/or BIR rulings indicating the imposition of fines for failure to register with the BIR upon the issuance of the certificate of registration of business name with the Department of Trade & Industry. In reply, please be informed that under Section 107 of the Tax Code, any person subject to value-added tax under Section 100 And 102 of the Tax Code are required to register with the appropriate Revenue District Office. (Sec. 18, Rev. Reg. 5-87) Those not subject to VAT are likewise required to register as non-VAT taxpayers pursuant to Section 237 of the Tax Code as implemented by Revenue Regulations No. 6-88 as amended by Revenue Regulations No. 2-89. The taxpayer's obligation to register shall arise upon the commencement of business, which means conducting commercial activity habitually and with the intention of making profits. Preparatory acts by the taxpayer i.e. registering a business name or style with the Department of Trade & Industry, without actually conducting or starting any business activity will not give rise to any obligation by the taxpayer to register with the Bureau of Internal Revenue. Such being the case, no penalty shall be imposed on the taxpayer who merely register a business name or style without actually starting the business. aisadc Very truly yours, (SGD.) JOSE U. ONG Commissioner