Freelancer Business Registration Guide: How to Register Your Freelancing Business with the BIR

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The gig economy is a growing alternative a lot of Filipinos are taking advantage of right now. And with the pandemic forcing a lot of people out of their jobs, most people turn to freelancing as their main source of income.

But because freelancing isn’t widely accepted (yet), there exist few resources about it. So if you’re looking for an updated guide on how you can register your freelance business, this guide is for you.

Under the eyes of the Philippine government, any income you earn is taxable. That includes income coming from freelancing projects. That’s why it’s essential you register your freelancing business early on in order to avoid unnecessary headaches later.

Why register your freelancing business

Aside from the legal consequences, there are a lot of benefits of registering your freelancing business:

  1. Show credibility—when you register your business, you will have a document called the Certificate of Registration (also known as BIR Form 2303) that serves as proof that you are a legitimate business
  2. Ability to issue receipts—most companies here or abroad require official receipts as proof of their expense. Without it, they cannot legally use it in their business, that’s why they are looking for this.
  3. Updated tax records—while you may not think about it now, but you may need a bank loan or get a travel visa in the future. One of the requirements for these things is always an income tax return (ITR) for at least the previous year. If you are not registered, you will not have an ITR to produce.

Registering your freelancing business with the BIR solves these and other potential headaches later on.

Do you have any questions? Or did you notice any discrepancies from your experience? Let me know in the comments so I can update the article. Today, there is no single and reliable source of information for everything related to the government agencies. With your help, we can transform this website to help others like you overcome the same challenges you’ve faced before. 

Other information you need to know about being a freelancer

A freelancer is a self-employed, skilled professional who offers their services or specialized craft for a fee and it could be a part-time or full-time working relationship. There is no expectation of a permanent single client unlike in the field of regular employment or corporate jobs.

Freelancers get paid either per hour, per project, per contract, or depending on the agreement between the employer and freelancer. Being the most rapidly growing business market in the world, it is no wonder that many people jump the fence to carve their own career paths.

In the Philippines, freelancers fall under what the government calls self-employed individuals. They are defined as:

  • Persons engaged in business and derive their personal income from such business;
  • Professionals such as (1) “persons who derive their income practicing their profession” like lawyers, and those registered with the Professional Regulation Commission (PRC) such as doctors, dentists, certified public accountants, and others; and (2) those “who pursue an art and make their living therefrom,” including writers, athletes, and others.

These include popular freelancing jobs like virtual assistants, graphic artists, content writers. Bloggers, vloggers, and podcasters all fall under this category too.

Freelancer registration requirements

There are a couple of requirements and documents that you need to prepare beforehand.

Below is a high-level overview of the documents and information you need to have/know. In the next section, you’ll see how they all work together. And as with most requirements, you need the original and photocopies of them throughout the entire process.

  1. Tax Identification Number (TIN) – You normally get your TIN from your first employer. If you don’t have any yet, BIR has made an easier and faster way using BIR eReg and you may follow these steps on this website.
  2. Revenue District Office (RDO) – If you are a freelancer then you need to make sure that your TIN is in your current RDO that also covers your current home address. Generally speaking, your current RDO is where you last worked. You can ask your previous employer about this. If it is different from the address that you will use in your registration, you will need to transfer your RDO using BIR form 1905 first.
  3. Birth Certificate – If you don’t have any, you may request from the nearest Philippine Statistics (PSA) office or order it online. Make sure that you have a photocopy of your birth certificate as BIR will not get the original copy.
  4. Any government-issued ID that has your name, address, and birth date.
  5. Barangay Certificate stating you are working as an online freelancer and need to be registered as a self-employed professional
  6. PRC ID (if applicable)
  7. Occupational Tax Receipt (OTR) or Professional Tax Receipt (PTR**) – for licensed professions under the Philippine Regulatory Commission or OTR for professions where PTR is not required. You can get this in the city hall in which city you are planning to register (usually home address).
  8. BIR Form 1901 (Application of Registration) – 2 original copies
  9. BIR Form 0605 (Payment for Application of Registration) – 3 original copies
  10. BIR Form 1905 (for RDO change if applicable) – 2 original copies
  11. Books of Accounts***

*Barangay Certificate is different from Barangay Clearance and you need to bring your COE with you when applying for this

**Since online freelancers don’t need DTI Registration and Mayor’s Permit, BIR will require you to get PTR or OTR from your city hall or municipal hall. Just a bit of advice, because you don’t have a license then it is better to get an OTR and is relatively cheaper than PTR.

***For online freelancers, you only need two books of accounts: Journal and Ledger

Step-by-Step Process to Register Your Freelancing Business with the BIR

Please take note that this registration process is for individuals or freelancers only and doesn’t apply to non-individual or companies or firms.

However, if you register a business to offer these said services, for example setting up your photography studio or a graphic design agency, then you might want to register a company (like an OPC) instead of yourself.

1. Update your TIN through BIR Form 1905

If you have your TIN as an employee from your first employer, you need to update it and fill out a different form and you can download it here: BIR Application for Registration Update Form 1905.

You can either register your TIN online or go to the nearest BIR office.

Here are the two different scenarios you will most likely encounter:

  1. If you have an existing TIN under an employer and will be transitioning to a full-time freelancing career, you need to change your status from employed to self-employed.
  2. If you are still in a corporate world and freelancing at the same time, you can declare yourself as a mixed-income earner, indicating you earn from both being employed and self-employed means.

2. Update your personal information and RDO through BIR Form 1905

When filling out the form from Step 1, make sure that you have also updated your other personal information such as your registered address and Regional District Office (RDO), if applicable. That form is also for information update, correction, or cancellation.

Your RDO should have jurisdiction over your place of business (if with establishment) or residence. If not, you need to request a transfer of RDO in BIR.

For example, if you previously worked in Makati but you live in QC (and this is the address you plan on using), you need to also transfer your RDO.

This also applies even if it’s within the same city. Let’s use Makati again as an example. If your company is in Legaspi Village (RDO 47), but your home is in Salcedo Village (RDO 50), you will need to transfer your RDO.

There are two ways to do this: Either go to your old RDO and personally request from there or go to the new office where you want your RDO to be, fill out a BIR Application for Registration Update Form 1905, and request them to fax it to your old RDO.

Here’s a list of RDOs on the BIR website and has a detailed list of areas and information within the RDO’s jurisdiction.

3. Accomplish BIR Form 1901

Fill out a BIR Application for Registration Form 1901 and print it out in two copies.

4. Accomplish BIR Form 0605 and pay the annual registration fee

This form is for printing receipts, invoices, and proof of payment of annual registration fee.

Fill out BIR Payment Form 0605, print it out, have three copies, and pay the annual registration fee of Php 500 at the BIR’s cashier or any accredited bank within your district.

This will be paid every January of every year. You will need to show BIR Form 1901, BIR Form 1905, and the Barangay Certificate upon payment.

Here’s a list of Authorized Agent Banks (AAB) that can also accept the payment. Don’t forget to photocopy the payment form and receipt from the bank and have it in 3 copies.

5. Pay other fees

Pay for the Php 15 certification fee and the Php 15 documentary stamp tax.

Payment receipt and taxpayer’s verification slip will be given to you together with forms 1901 and 0605 after.

Keep all of these as you need to attach to the Certificate of Registration later on.

6. Submit requirements together with BIR Forms

Collate all BIR Forms 1901, 1905, and 0605 and submit these together with the required documents above* to your RDO. Head to the New Business Registrant Counter. Don’t forget to also present your receipt from the bank, both original and photocopy.

*see requirements for BIR Certificate of Registration

7. Attend the required seminar

Attend the taxpayer’s seminar and initial briefing which will be conducted at and by the RDO for new registrants. It is free and you need to know your rights and responsibilities as a taxpayer.

This will also guide you on how to file your income taxes properly. If you are unable to attend the seminar, an officer-in-charge is present daily at your RDO to assist you with your concerns and clarifications.

8. Claim BIR Certificate of Registration Form 2303

Usually a day after, the RDO will issue you the Certificate of Registration or BIR Form 2303 together with the “Ask for Receipt” notice and Authority to Print (ATP).

9. Apply for invoices or official receipts using the BIR Form 1906

You are also required to issue an official receipt for client earnings whether you are earning locally or internationally. You need to have an official receipt printed by a BIR-accredited printing press facility.

This Official Receipt (OR) is what makes you a legitimate professional. Along with your COR, these government-issued documents are needed to be issued to your clients in the future when you receive compensation for services rendered.

Fill out the BIR Form 1906 by downloading the form here: BIR Authority to Print Form 1906. You need to following requirements to for BIR Official Receipts:

  • BIR Form 1906
  • Barangay Certificate
  • One government-issued valid ID
  • Photocopy of your BIR Form 0605 with receipt from the bank
  • Photocopy of COR and payment receipt
  • Money to be used as payment for your OR orders

This may take weeks before you can claim your official receipt booklets. The receipts are valid for 5 years and price varies depending on your chosen printing press.

10. Register Books of Accounts

Once you have your OR and COR, you need to learn how to manage your books. As an online freelancer, you’ll be given a Journal or a Ledger. Subsidiary Professional Income Book, Subsidiary Purchases, or Expenses Books will do as well.

Register your Books of Accounts and have it signed and stamped by the same RDO where you are registered at.

What to do after completing the registration process

After receiving your BIR form 2303 and your receipts/invoices, take note of these reminders:

  • Issuance of registered Sales Invoice or Official Receipt for every sale of goods or services to clients/customers/buyers;
  • Keeping of registered Books of Accounts and other accounting records of business transactions;
  • Withholding of taxes, as applicable;
  • Filing of required tax returns; and
  • Payment of correct taxes due on time.

If you are unfamiliar with the different taxes, when you should file, or how to fill-out your receipts, check these out. Of course, nothing beats talking to a qualified accountant who has helped other freelancers before.

Do you have any questions? Or did you notice any discrepancies from your experience? Let me know in the comments so I can update the article. Today, there is no single and reliable source of information for everything related to the government agencies. With your help, we can transform this website to help others like you overcome the same challenges you’ve faced before. 

Frequently asked questions

What are the benefits of registering my freelancing business?

When you register your freelance business, you have the ability to issue receipts that most companies are looking for. You also demonstrate your credibility and trustworthiness. After all, if you register with the BIR, you are showing that you are a legitimate business. Lastly, by registering, you’ll also be able to obtain income tax returns (ITRs) which can be used later for loans or visa applications.

What’s the difference between OTR and PTR?

Occupational Tax Receipt (OTR) and Professional Tax Receipt (PTR) is a receipt you pay to the city hall you plan on registering with, which is usually where your home (or office) address is. Their function is the same except the main difference is PTR is used for professionals covered by the Professional Regulation Commission (PRC). Think nurses, lawyers, and the like. If you’re not covered by the PRC, you’ll use OTR.

Is a freelancer the same as a sole proprietor?

In some cases, yes. But from a legal standpoint, a sole proprietor is the owner of a company, while a freelancer is an individual. There are different laws and policies that apply to a company and an individual. For example, a sole proprietor can have an employer-employee relationship (hire people) but a freelancer can’t.

When should I file my taxes

You must file your income tax on time to avoid penalties. Here are some important dates to remember:

  • January 30 of every year – Payment of annual registration fee
  • April 15 – Annual income tax of the previous year
  • May 15 – 1st quarter income tax
  • August 15 – 2nd quarter income tax
  • November 15 – 3rd quarter income tax

Not only it is essential to register yourself as a self-employed professional, but it is also ethical to file your taxes. Taxes are an integral part of the development of the economy and also the lifeblood of many government employees and public school teachers.

Conclusion

With this sought after laptop-lifestyle, a freelancing career empowers individuals to take pride in what they do and offers them the freedom and flexibility that they have been dreaming of.

It comes with immense privilege and independence to work anytime, from anywhere in the world as long as the freelancer delivers quality work on time.

But learning the ropes of being a bonafide freelancer or skilled professional is not easy. With great freedom comes with even greater responsibilities and legal obligations.

Two of those duties are registering as a self-employed professional and keeping a good record of your income taxes.

When registered with BIR in the Philippines, you will receive an annual income tax return which is also proof of your earnings. This can prove helpful for other transactions that will need authentication of your income such as bank loans, travel visas, and credit cards. Being registered also establishes a better reputation and trust among your clientele because you are a legitimate business entity already.

If taking full ownership over your own success is interesting to you, then this new lease of life will also open many opportunities, connections, even failures to learn from, and eventually, a self-made success.

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Ariel Lim

Ariel Lim

Marketer, freelancer, husband. I help SMBs make their competition irrelevant by providing more value to their customers. Learn more about my work at ariel-lim.com. When not working, you can find me traveling around the world or playing with my dogs. At home, I'm constantly trying to improve my home brewing skills.

4 thoughts on “Freelancer Business Registration Guide: How to Register Your Freelancing Business with the BIR”

  1. Hi. I would like to register as a freelancer. I also have a day job so I’ll be a mixed-income taxpayer then. Are these instructions still updated? I would like to visit my nearest RDO but as we all know, sometimes they are not approachable as they should be. I’m thinking if I should do all of these but worried if these are all still applicable and updated so it will save some time.

    Hoping for your response.

    Reply
    • Thanks for commenting. Yes it’s still updated. But note that because there is NO standard process (or more specifically it doesn’t get implemented), each RDO will have its own set of nuances. Some would be strict and require more documents, while some won’t. The advice we often say is to go early in the morning. That way, heads are cooler.

      Reply
  2. What if you are currently employed at a private company and also doing freelancing at the same time? Does registering your freelancing business in BIR cause conflict in how your employer remits your tax? For example, your employer has a different RDO code?

    Reply
    • Does registering your freelancing business in BIR cause conflict in how your employer remits your tax

      – No. But mixed income means you COMBINE your employee earnings (form 1700) with your freelance earnings using form 1901. It might be best to seek advice from a tax professional for how to do this exactly so you avoid issues later on.

      Reply

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