A tax clearance in the Philippines is a recognized official document issued by the Bureau of Internal Revenue. Since the Philippines does not run a credit score system, often, this document is proof of business tax compliance and the good standing of any organization. Therefore, it is usually asked by potential investors to see the transparency and reliability of a business or individual.
If you are looking to apply for a tax clearance, here is a heads up. Before doing so, you must get your BIR documents in order. Have the needed forms, financial statements, papers, and even receipts prepared ahead. It is also to your advantage if you have been compliant and prompt with all past tax deadlines and payments. Produce proof of this if it is possible.
It is also vital that you know where your BIR Regional Office is, as well as the Revenue District Office is in the local government unit where your company is registered under. Take notes of the days these offices are open and their open hours as well. It helps to get the contact number of the office beforehand should you wish to schedule an appointment or make clarifications.
To make this process easier for you, we’ve compiled a list of both the tax requirements and the step-by-step process of how to claim your tax clearance.
Pre-Requisites for Seeking Clearance
Before you can secure your tax clearance, here are the pre-requisites you must comply with:
1. You must first be a registered taxpayer in the BIR Electronic Filing and Payment System. This is an online portal that allows you to pay and file taxes online. To enroll in the electronic filing and payment system, you need to bring a Certificate of Registration and Letter or Request for the Enrollment to your Revenue District Office.
2. You should not have missed any previous tax payments. Bring the tax payment form and the printed BIR acknowledgement email. If there are issues or you have been remiss, you need to settle unpaid taxes and pay incurred penalties.
3. Create a written and formal request for the issuance of tax clearance.
Steps on How to Get Tax Clearance
Take note of the following steps to help you get your tax clearance for whatever purpose it may serve:
Step 1: Bring your written request for tax clearance and other pertinent documents to the Revenue District Office where your business is registered.
Step 2: The RDO staff will double-check everything you bring to see if you have outstanding balances to pay, as well as penalties.
Step 3: If you are found to have complied with the BIR requirements, you will be issued a Clearance of NO Tax Liability. However, if you have overdue payments and other arrears, you must settle them first before BIR releases a no tax liability certificate.
Step 4: Pay for Tax Clearance Certification through electronic filing and payment system. The fee for this is 1000 pesos. Then you must attach the online portal bank payment confirmation receipt to your documents.
Step 5: Bring the following requirements to the BIR Regional Office:
– Certificate of No Tax Liability
– Application Form for Tax Clearance – Downloadable from the BIR Website
– BIR Form 0605 (Payment Form) and eFPS Bank Payment Confirmation Receipt
– Photocopy of Certificate of Registration (COR)
– Tax clearance issued in previous years
– 2 loose documentary stamps (do not affix to any document)
– Written Letter of Request for Tax Clearance
– Latest Tax Returns filed and paid through electronic filing and payment system from the payment for Registration Fee
Step 6: After submitting all the required documents, wait for further instructions as advised by the Regional Officer. Once documents are reviewed and cleared, you will be able to claim your tax clearance.
The Final Wrap Up
With these steps and requirements in place, it will be easy for you to secure your tax clearance from the BIR. Usually, prospective government bidders must show proof of their tax compliance. But for whatever reason you need this certificate, it is vital to always pay your tax dues of you can face the BIR’s Oplan Kandado initiative. If you have any issues or pending tax cases, resolve them right away to avoid stiff penalties. This also means you won’t lose opportunities that allow you to participate in government projects or any other private endeavors.
If you need help with BIR transactions, give our team a call. We can assist you with documentation and processing to ensure the timely release of your tax clearance. As a result, you can conduct business without worries, and you can also competitively bid on different projects with confidence. We also offer assistance in bookkeeping, accounting, and auditing. Touch base with us ASAP for a free 30-minute consultation.