The BIR RMC 57-2020: Streamlining of Business Registration Requirements and Revised Checklist of Documentary Requirements has caused a lot of uproar and confusion in the business community.
It’s one of the BIR Revenue Memorandum Circulars (RMC) that is supposed to clarify certain laws and policies, but is often taken out of context and misunderstood by other people.
What is the RMC 57-2020 all about?
According to the BIR website, RMC 57-2020 “prescribes the updated policy and revised checklist of documentary requirements on business registration and other types of application.”
In summary, RMC 57-2020 removes the requirement of the mayor’s permit/business permit in the registration with the BIR.
BUT it does not say anything that you can skip it at all.
It just means that you can process the BIR and get your receipts ALONGSIDE the business permit.
Why it matters?
Before, business registration is done sequentially like this:
- SEC/DTI
- Barangay
- City Hall — this is where you get the mayor’s permit/business permit
- BIR
Requirements for the next step includes the documents you got from the previous one. That is why you do them in a specific order and cannot proceed to the next step without finishing the previous one. For example:
- In order to apply for your barangay permit, you need your SEC certificate or DTI certificate.
- To apply for a business/mayor’s permit, you need your barangay certificate.
- To register for the BIR, you need your business permit.
RMC 57-2020 removes the mayor’s permit requirement to register with them.
This change is welcomed by people in the industry because there’s a little known policy within the BIR that you should complete your BIR registration within 30 days of your business registration. But because the mayor’s permit often take weeks to process, when you reach the BIR stage, you’d have no choice but to pay the penalty for late registration.
Now, after getting your SEC certificate or DTI registration, you can simultaneously proceed with the BIR registration alongside your barangay permit or business permit.
You can find more information by downloading the annexes provided by the BIR to see which one applies to your business specifically.
Where can I learn more?
You can learn more about the RMC 57-2020 from the BIR website. Here are some important links:
2 thoughts on “What Is the BIR RMC 57-2020? Business Registration Requirements Clarified Once and for All”
Thank you Ariel for articles like this one. Yes, I experienced that problem with stupid BIR policies (how can they have policies that have fines involved and not publish them? are those legally enforceble policies?) before, and had to pay a fine even though it was another government office’s delay (Mayor’s office) that caused the submission of application beyond 30 days. It was quite an amount of money. This, and other experiences with BIR and other agencies that a small business has to deal with, was the reason that I terminated my incorporated business last year, instead of trying a different business approach. If BIR has really streamlined their process, then it would be good for the economy.
Thanks for sharing your thoughts. Yeah, i generally agree with what you said. Looking at it from a different perspective, it really is a systemic issue that needs to be addressed appropriately. The problem just gets aggravated because there seems to be little to no improvements. Occasionally you’ll hear about this startup bill or one that helps small businesses, but nothing after it. Nonetheless, it’s up to us to make that change. Every small step towards the right direction helps.