Here's How You Can Officially Register As a Freelancer

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Freelancing has become an attractive option for those who refuse to be called back to the office and want to continue working from home.

Being your own boss means you will do the work of corporate HR, including paying your taxes. Hence, the need to register with the Bureau of Internal Revenue. Of course, many steps are involved, but doing so builds credibility, gets your taxes in order, and expands your client base. Registering with the Bureau of Internal Revenue (BIR) addresses one major pain point in freelancing: issuing receipts.

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Here's how to register as an online freelancer:

Requirements for freelancers

  • Tax Identification Number (TIN)
  • Occupational Tax Receipt (for non-licensed professionals)
  • Professional Tax Receipt (for licensed professionals)
  • Government-issued IDs with full name, address, and birth date
  • Birth Certificate

The Revenue District Office might ask for additional requirements, such as a copy of a contract with a client or Barangay Clearance, so best to have those ready as well.

Take note of your TIN

If you're starting as a freelancer with no prior work experience, you need to get a TIN from the BIR. Then, complete and submit two copies of BIR Form 1901 to your nearest BIR branch.

If you've previously worked and already have a TIN, take note of the number as you'll still need it when filling out the BIR Form 1901, and declare that you will now be self-employed. Form 1901 will be submitted to the BIR.

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Transfer Revenue District Offices

Let's say your previous company was in Mandaluyong, but you live in Pasay, intending to work at home full time. You'll have to change your Revenue District Office (RDO) from Mandaluyong to Pasay, as that is the city where you will be conducting business in.

If you work and live in the same city, if it's in a different village or street, you still have to update it.

To transfer your TIN registration to your current RDO, you must fill out BIR Form 1905. Submit BIR Form 1905 to your new RDO and to your old RDO for filing.

See a list of RDOs online.

Get a Certificate of Registration

The Certificate of Registration Fee is P500. Fill out BIR Form 0605 and pay the fee to any authorized agent or bank of your RDO. Form 0605 is for printing receipts for clients and serves as proof of payment of the annual registration fee. Make sure to keep the receipt and a copy of the form.

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The Certificate of Registration (COR) Fee must be paid in January of every year, along with the submission of BIR Form 1901, and BIR Form 1905 upon payment.

Secure an OTR or PTR

Online freelancers are not required to submit a DTI permit and can fall under the OTR category or Occupational Tax Receipt for non-licensed professionals. However, any services that require a license fall under Professional Tax Receipt or PTR.

Each city has a different set of requirements for OTR issuance. However, most city halls will issue an OTR after you present a copy of a contract from an existing project or client.

If your city does not issue an OTR, your next best bet is to head to your RDO and ask for additional information on how to get one instead.

If your city issues OTRs, prepare a copy for submission later.

Submission

After you've gathered the requirements, it's time to submit them to your RDO. The RDO will take the documents you submit, so you have to provide photocopies of each one, along with the originals.

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  • Tax Identification Number (TIN)
  • Occupational Tax Receipt (for non-licensed professionals)
  • Government-issued IDs with full name, address, and birth date
  • Birth Certificate
  • Accomplished BIR Form 1901 (three copies)
  • Accomplished BIR Form 1905 (three copies)
  • Accomplished BIR Form 0605 (three copies)
  • Receipt of payment of Certificate of Registration Fee (three copies)

Claiming

Usually, a day after submission, the RDO will issue you the COR or BIR Form 2303 together with the "Ask for Receipt" notice and Authority to Print.

You can claim your COR once everything has been submitted. Seminars for filing taxes are often required, so you never miss on contributions and incur penalties. After paying your registration fee, ask, so you don't miss this requirement.

Upon claiming your COR, you will be given the "Ask for Receipt" sign which you usually see in establishments. 

Authority to print receipts

As a registered freelancer, you are legally mandated to issue customer receipts. The BIR requires businesses to have Authority to Print (ATP) receipts if they're offering services or commercial invoices if they sell goods.

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To get the ATP, you need the following:

Accomplish and submit three copies of BIR Form 1906 at the RDO, with a sample of principal or supplementary invoices and a copy of your COR. It would usually take a week before you can get your ATP.

After acquiring an ATP, go to an accredited BIR printer to have your official receipt book printed. Release of receipts from the printers can take up to two weeks. Take note that starting July 16, 2022, receipts and invoices no longer have a validity period and may still be issued until fully exhausted

Register your books of account

More paperwork awaits you even after registration. To update the BIR of every transaction, you must purchase and register your books of account. It's where you keep the original record of all business transactions.

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There are three types of accounts, but online freelancers are only required to submit two to their RDO.

Manual Books of Account include journals, ledgers, or columnar books where you manually handwrite your business transactions.

Loose-leaf Books of Account are journals and ledgers printed instead of handwritten—tracking through Microsoft Excel or using digital spreadsheets counts. 

If you're next level, you can also submit Computerized Books of Account, where a program or software automatically inputs transactions. However, this is usually reserved for businesses with large and complex operations that handle a chunk of transactions at a time.

Sounds like a lot, huh? Don't worry, there are a lot of resources available online to help you in this process. The BIR is also very helpful and can provide information sessions when you need them, just visit or contact your RDO for more information.

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