Business registration regulations

October 31, 1985 REVENUE REGULATIONS NO. 11-85 SUBJECT : Business Registration Regulations TO : All Internal Revenue Officers and Others Concerned SECTION 1 . Scope . Pursuant to the provisions of Section 326 o f the National Internal Revenue Code, in regulation to Section 9 of Presidential Decree No. 1991, the following regulations are hereby promulgated to prescribe the issuance of Taxpayer's Business Registration Certificate. SECTION 2 . Who shall register . Every person desiring to engage in business as an importer, manufacturer, producer, wholesaler, retailer or conduct such other related business activities, shall first register his business before actually engaging therein. Those already engaged in the aforesaid business undertakings shall likewise register. SECTION 3 . When and where to register . (a) When to register . Persons who are just starting their business shall, within thirty days after the payment of the appropriate privilege tax, and before actually engaging therein, file an application for registration of their new business. Persons already engaged in business shall file their application not later than November 30, 1985. cd Upon approval of their application for registration and the issuance of a Business Registration Certificate, the applicant shall no longer be required to re-register the same business covered by the same registration. However, if at any time thereafter, additional line or lines of business shall be undertaken, an amended application shall be filed stating the additional line or lines of business and the form and manner of business. A person who transfers his place of business or any branch from the geographical jurisdiction of one Revenue District office to that of another shall re-register with the Revenue District Officer of the place where he has transferred his place of business (b) Where to file . The application for registration shall be filed with the Revenue District Officer of the place where the business is located. Where a person operates separate and distinct businesses in different Revenue Districts or maintains a head office in one district and a branch or maintains a head office in one district and a branch or agency or sales outlet in another, he shall register each business with the proper Revenue District Office. If the applicant has several business establishments located in the same Revenue District, a consolidated application for registration covering all the said businesses shall be filed with the Revenue District Officer. In meritorious cases, the Commissioner of Internal Revenue may allow a consolidated registration by taxpayers having different branches, agencies or sales outlets situated in different Revenue Districts. In such cases, the application shall be filed with the Revenue District Officer of the district where the head office is located. SECTION 4 . Forms to be used . The application for registration shall be made in BIR Form No. 2529D-2. cdt To facilitate the issuance of a Business Registration Certificate (BIR Form No. 2529D-3) and the establishment of his Business Tax Account with the Bureau, the applicant shall accomplish the form completely by supplying all the information required therein. SECTION 5 . Manner of processing . Before any application for registration is processed, the applicant-taxpayer or his duly authorized representative shall be required to accomplish properly the Registration and Credit Information Sheet (BIR Form No. 2529D-1). The said form shall serve as a guide for determining the amount of security to be posted and the reporting basis to be assigned to the applicant-taxpayer. In all cases, any information supplied by the applicant shall be treated as strictly confidential and the same shall be used for internal revenue tax purposes only. SECTION 6 . Business Registration Certificate . Once the application for registration of business is found to be in order, the Revenue District Officer shall cause the preparation and issuance of the Business Registration Certificate. SECTION 7 . Posting of security . When warranted by circumstances as can be gleaned from the application, the Commissioner of Internal Revenue or his duly authorized representative may require the applicant, as a condition precedent to registration to post a security to ensure the payment of his future sales tax liabilities. The amount of security to be posted shall in no case exceed the tax liability for three months or be less than the tax liability for one month based on the taxpayer's projected or estimated taxable sales as declared in his Registration and Credit Information sheet. To illustrate: Projected or estimated quarterly sales P150,000 Situation A Taxpayer is subject to tax on second sale: Monthly tax due (150,000 3 x 3%) P1,500 3 months tax due (1,500 x 3) P4,500 Situation B Taxpayer is liable to tax on a quarterly basis such as manufacturer: Quarterly tax due (P150,000 x 20%) P30,000 Less Estimated tax credits (30,000 x 70%) P21,000 Quarterly tax due P9,000 Monthly tax due (P9,000/3) P3,000 In situation A the amount to be posted shall not be less than P1,500 but not more than P4,500. In the case of the manufacturer in Situation B, the amount to be posted shall not be less than P3,000 nor more than P9,000. In all cases, the security to be posted either in the form of Certificate of Deposit or Treasury Bond shall be held in trust and maintained in a separate account by the Bureau of Internal Revenue. Any income that may be earned by said security shall accrue to the account of the registrant. The terms and conditions for the posting of security are embodied in the Certificate of Security Posted (BIR Form No. _____) to be issued in acknowledging the deposits. Periodically, the amount of security posted shall be renewed and, based on the business conditions and record of past payments of the taxpayer, may either be increased or reduced or returned to the applicant. In meritorious cases, the Commissioner may allow, in lieu of the postings of security another person in the community with sufficient assets to guarantee the payment of the taxpayer's future sales tax liability under terms and conditions acceptable to the Commissioner. SECTION 8 . Declaration under penalties of perjury . The application forms and the Registration and Credit Information Statement required under these regulations shall contain written declarations that the same have been made under the penalties of perjury. Any person who willfully files a statement containing information which is not true and correct shall, upon conviction, be subject to the penalties prescribed for perjury under the Revised Penal Code. SECTION 9 . Effectivity . These regulations shall take effect on November 1, 1985. (SGD.) CESAR E.A. VIRATA Minister of Finance Recommending Approval: (SGD.) RUBEN B. SANCHEZ Acting Commissioner ATTACHMENT BIR Form No. 2529 D - Monthly Return of Sales Tax on Second Sale BIR Form No. 2529 D1 - Taxpayer Registration and Credit Information Sheet BIR Form No. 2529 D2 - Application for Registration of Business BIR Form No. 2529 D3 - Business Registration Certificate