#AskTheTaxWhiz: When is the deadline to renew my business permit?

I registered my business in December 2014.  Do I still need to renew my business permit? When is the deadline and what are the requirements? What happens if I failed to renew my business permit?

Yes. Per Section 167, Local Government Code, all local taxes, fees, and charges shall be paid on or before January 20.

Among other fees, local business tax is imposed on the annual gross sales or receipts. The rates vary depending on the nature of your business under Section 143 of the Local Government Code.

Requirements and procedures may vary depending on the local government unit (LGU).

For Quezon City, there are only 3 steps:

1. Pay your taxes and fees at the City Treasure’s Cashier, Ground Floor, Annex Building, Taxpayers’ Lounge.

2. Go to the basement of Civic Center, Building A (Business Permits and Licensing Office). Submit the following documents for evaluation per district:

• Original copy of 2013 Business Permit (if not available, bring certified copy):
• Photocopy of machine-validated 2014 official receipt
• Original copy of 2014 barangay clearance
• Other documents that may be required by the evaluator, such as locational clearance, Fire Safety and Inspection Certificate, Health Certificate, etc.

Photocopies of all the above documents will be stamped “original copy presented.”

3. After completing Step 2, a claim stub will be issued with the date of the release of business permit. Present it on the specified date of release to get the renewed business permit, plates and stickers for 2015.

Failure to pay local business tax, fees, and other charges within the prescribed deadline will result in 25% surcharge and 2% interest per month.

I am working in Singapore. Am I required to get a community tax certificate (CTC) or cedula? Who needs to to pay community tax? Where do you pay?

No. It is also called resident’s certificate.

Only individuals, 18 years old and above, who are residents of the Philippines and regularly employed on a wage or salary basis for at 30 consecutive working days during the calendar year are required to pay community tax. Also required are individuals who are either engaged in business or obliged to file an income tax return or who own real property with an aggregate assessed value of P1,000 ($22.69) or more.

Every corporation engaged in or doing business in the Philippines, no matter how it was created or organized and whether domestic or resident foreign, shall pay an annual community tax.

The community tax shall be paid in the place of residence of the individual (barangay or LGU), or in the place where the principal office of the juridical entity is located (LGU only).

Do I need to pay an annual registration fee to the Bureau of Internal Revenue (BIR) even if I have not started operations? Is it a fixed fee or based on annual gross receipts? If I have 10 branches, do I pay annual registration fee (RF) for each branch? What happens if I failed to pay the RF of the branches?

Yes. P500 ($11.34) annual RF regardless of your annual gross receipts.

Yes. RF is per business registration, whether head office or branch.

Failure to pay RF on or before January 31 will result in a compromise penalty of P5,000 ($113.40) to P20,000 ($453.59).

So, better pay now unless you want to pay more!

Got a question about taxes? #AskTheTaxWhiz! Tweet @rapplerdotcom or email us at business@rappler.com. – Rappler.com

Mon Abrea is a former BIR examiner and an advocate of genuine tax reform. He serves as chief strategy officer of the country’s first social consulting enterprise, the Abrea Consulting Group, which offers strategic finance and tax advisory services to businesses and professionals. Mon’s tax handbook, Got a Question About Taxes? Ask the Tax Whiz! is now available in bookstores nationwide. Follow Mon on Twitter: @askthetaxwhiz or visit his group’s Facebook page. You may also email him at consult@acg.ph.


(US$1 = P44.09)