Having a business registered in the Philippines requires you to renew its business permits annually.
It doesn’t matter if the company is a Single Proprietorship, a One Person Corporation, a Partnership, a Corporation, a Branch Office, or a Regional Headquarter (ROHQ). All business establishments, per Philippine law, must renew their permits or face possible closure of their operations as well as a loss of face to their clients.
To help you avoid long lines and heavy monetary penalties, we give you our complete FAQ guide on how to renew your business permit in the Philippines for 2020.
Frequently Asked Questions (FAQs):
What permits do I need to renew? When is the deadline for each?
Business permit renewal season involves coordinating with three different government entities: the barangay, the city or municipality, and the Bureau of Internal Revenue (BIR).
1. Barangay Permit or Clearance (Deadline: January 20)
A barangay permit certifies that a business establishment is compliant with the requirements set by its local government unit (LGU) of operation. It is also a requirement when securing the Mayor’s Permit.
2. Mayor’s Permit or Business License (Deadline: January 20)
Each city or municipality has its own rules to comply with. The Mayor’s Permit certifies that a company is compliant with the ordinances of the city or municipal it operates in.
3. BIR Renewal of Registration (Deadline: January 31)
The BIR issues a Certificate of Registration (COR) to a company when it is first established. To ensure its validity from year to year, a business establishment must pay a renewal fee of PhP 500.00 every January 31.
What are the penalties for non-renewal or late renewal of business permits?
City or Municipality
If filing is not accomplished by January 20 of each year, the LGU concerned will impose a 25 percent surcharge on top of the unpaid taxes, charges, and fees assessed. Also, a negligent company will incur a 2 percent monthly interest on all unsettled fees, including the surcharge, until everything is paid off.
Extremely delinquent businesses, on the other hand, run the risk of closure and/or seizure of its properties and assets.
All these penalties are imposed by the Local Government Code of 1991.
BIR
A company that did not comply to the January 31 deadline will be fined an amount ranging from PhP 5,000.00 to PhP 20,000.00. Its officers also face the risk of imprisonment, with the term ranging from six months to a maximum of two years.
What requirements do you need for business permit renewal with each government office?
Barangay
1. 2019 Barangay Permit (original and photocopy)
2. Official Receipt from last year (original and photocopy)
3. Accomplished application form (2 copies)
4. Renewal fee (varies per barangay)
City / Municipality
1. 2020 Barangay Permit (to be availed first for the current year)
2. 2019 Mayor’s Permit (original copy)
3. 2019 Official Receipt (original copy)
4. 2019 Audited Financial Statement
5. Lease Contract (if changing address)
6. Community Tax Certificate (CTC) or Cedula (to be secured first from City or Municipal Hall)
7. Comprehensive General Liability Policy (CGLP) insurance for 2020
8. Official receipt of CGLP availed
9. Renewal fee (varies per city or municipality)
Depending on the LGU concerned, you may also be asked to provide the following documents:
1. Fire and Safety Inspection Certificate (original copy)
2. Sanitary Permit (original copy)
BIR
1. BIR Payment Form 0605 (Click this link to download from the BIR website)
2. PhP 500.00 annual business registration fee
What are the steps for renewing business permits? How long will the process take?
Barangay
Estimated Time Needed: 1 day
1. Visit the barangay hall in whose district your company operates in. Secure a renewal application form.
2. After filling out the form, submit it along with the original copies of your 2019 Barangay Permit and Official Receipt.
3. The barangay’s permit division will then assess your renewal application and documentary requirements. If everything is in order, you may then pay the necessary renewal fee.
4. You will be given the Official Receipt for your Barangay Permit. You may then claim your new Barangay Permit on the date indicated in the Official Receipt.
City / Municipality
Estimated Time Needed: 1 to 2 weeks
1. Secure a renewal application form from the Business Permits and Licensing Office (BPLO) of the LGU that your company operates in.
2. Fill out the form then submit along with the documentary requirements for evaluation.
3. Based on the submitted documents, the BPLO will issue an assessment notice containing the amount of local business tax, real property tax, and other fees that your company needs to pay for 2020. You can choose to pay the entire annual fee in full or in quarterly installments. You may also contest the amount and request a lower assessment.
4. Bring the assessment notice and pay the required fees at the City Treasurer’s Office. They will provide you the Official Receipt to be presented when you claim the Mayor’s Permit certificate.
5. If your documents are in order, pay the Mayor’s Permit renewal fee at the City Treasurer’s Office. You will be given a receiving copy of your documents.
6. It will take some time for the certificate to be released. In the meantime, the Official Receipt will serve as proof that you renewed your Mayor’s Permit on time if asked.
7. You may then claim your new Business License from the City Treasurer’s Office on the date indicated in the Official Receipt.
BIR
Estimated Time Needed: 1 day
1. Fill up BIR Payment Form 0605 with details of your business establishment.
2. Bring the BIR Payment Form 0605 to your RDO’s Authorized Agent Bank (AAB) and pay the PhP 500.00 annual business registration fee there.
What other tips should I know about business permit renewal?
1. Don’t procrastinate. Preparing the documents required by your LGU at the last minute will land you in long waiting lines and possible payment of penalties. Use the whole month of December if necessary. Remember: the deadline for the whole process of business permit renewal is January 20.
2. Be OC (obsessive-compulsive). Paying attention to small details can save you a lot of time. Organize your documents as soon as you receive or print them. Triple-check what is written in your application form and its attachments. Bring enough cash before you head to the battle lines.
3. Patience is a virtue. No matter how early you start preparing, you will probably still face lines at your barangay hall, city hall, and BIR RDO. Make sure you’re ready to play the waiting game. Bring a fan, towel, bottled water, and even a good book if you’re so inclined.
4. Copies can save you. You never know how many copies of a particular document will be asked of you at the counter. Bring extra copies of your required documents so you don’t have to run out to the nearest photocopier (and lose your spot in the lines).
5. Avoid fixers. Do everything aboveboard. Don’t listen to individuals who promise shortcuts and discounts in the business permit renewal process. Their quick fixes may also quickly land you in hot water for tax evasion.
The best partner for renewing your business permit is someone who tells you the fees and steps needed exactly as it is. At DAYANAN Business Consultancy, we do exactly just that. Having helped over a hundred companies through the process, we know exactly how to save you time and effort. This allows you to focus on your core business functions better.
Let us take care of filling out forms and going to government offices for you. Contact us today!