BIR REGISTRATION REQUIREMENTS FOR A HOME-BASED SCHOOL-SUPPLIES STORE (PHILIPPINES) Comprehensive legal guide, June 2025
1. Statutory & Regulatory Foundations
| Instrument | Key Provisions Relevant to a Home-Based Store |
|---|---|
| National Internal Revenue Code (NIRC), as amended | §§ 236-238 (registration, annual fee, books, invoices); §§ 106-116 (VAT & percentage tax); § 24(A)(2) (8 % income-tax option) |
| Revenue Regulations (RR) | RR 7-2019 (8 % income-tax option); RR 9-2021 (One-Time Taxpayer Registration System); RR 6-2022 (VAT threshold ₱ 3 million) |
| Revenue Memorandum Circulars (RMC) | RMC 60-2020 & 55-2022 (mandatory registration of online/home-based sellers); RMC 75-2010 (Ask-for-Receipt notice) |
| Republic Acts | RA 9178 (BMBE); RA 10644 (Go Negosyo Act); RA 11032 (Ease of Doing Business) |
| Local Government Code, DTI Act | Require barangay clearance, mayor’s permit, and DTI business-name registration as prerequisites to BIR registration |
2. Choose the Legal & Taxpayer Classifications
| Situation | Recommended BIR Form | Notes |
|---|---|---|
| Sole proprietor (most common) | BIR Form 1901 | Register as “Self-Employed” at the RDO having jurisdiction over residence. |
| Partnership or corporation | BIR Form 1903 | Requires SEC registration first. |
| Barangay Micro Business Enterprise (BMBE) | Same form as above plus DTI-issued BMBE Certificate | Income-tax–exempt but still subject to withholding, VAT/percentage tax, and other filing duties. |
Tip: Even if you are home-based, you must register once you intend to earn income, per § 236(NIRC) and RMC 60-2020.
3. Pre-BIR Registration Checklist
DTI Certificate of Business Name (or SEC papers).
Barangay Clearance for business activity at home address.
Mayor’s/Business Permit (some LGUs waive for BMBE).
Proof of Address
- Lease contract & tax declaration or latest utility bill if you own the house.
Valid government IDs of owner/partners.
Email address & mobile number (required for eBIRForms/eTIS).
4. BIR Registration Step-by-Step
| Step | What to File or Pay | Details & Deadlines |
|---|---|---|
| 1. Complete BIR Form 1901/1903 | Personal TIN if none yet. Use eREG for faster processing. | |
| 2. Pay ₱ 500 Annual Registration Fee | BIR Form 0605; payable upon initial registration and every 31 January thereafter. | |
| 3. Pay ₱ 30 Documentary Stamp Tax | On the original Certificate of Registration (COR). | |
| 4. Register Books of Accounts | BIR will stamp either: • Manual ledgers • Loose-leaf (with permit) • Computerized (with permit). | |
| 5. Secure “Certificate of Registration” (Form 2303) | Lists tax types (e.g., Income, Percentage/VAT, Withholding). | |
| 6. Apply for “Authority to Print” (ATP) Receipts/Invoices – Form 1906 | Must print receipts within 30 days from ATP approval; validity: 5 years or upon exhaustion. | |
| 7. Post “Ask for Receipt” Notice & COR at the home store area | Mandatory even for online-only sellers; downloadable e-Notice allowed. |
Processing time: 1 business day under RA 11032, provided documents are complete.
5. Choosing Your Tax Regime
| Criterion | Percentage Tax (Sec. 116) | VAT | 8 % Income Tax Option |
|---|---|---|---|
| Gross sales ≤ ₱ 3 M | 1 %* of gross (2023-2025 CREATE reduction; reverts to 3 % afterward) | N/A | May elect in the first quarterly return or on Form 1901; replaces graduated income tax and percentage tax. |
| Gross sales > ₱ 3 M | N/A | 12 % of gross; may claim input VAT | Not allowed |
| Deadline to opt in | Not applicable | Not applicable | • On initial registration or • First Quarter ITR (BIR Form 1701Q) |
*Rate reverts to 3 % after June 30, 2025 if no further extension is legislated.
6. Post-Registration Compliance Calendar
| Return/Form | Frequency | Normal Deadline |
|---|---|---|
| 2551Q Percentage Tax or 2550Q/2550M VAT | Quarterly (and monthly for VAT) | 25 days after quarter/month end |
| 1701Q / 1701 (Individuals) or 1702 (Corporations) | Q1, Q2, Q3; Annual | Q1 & Q2: 60 days after; Q3: 60 days; Annual: 15 April following year |
| 0619E/F Expanded or Final Withholding | Monthly | 10 th of following month |
| 1601EQ/1601FQ | Quarterly | Last day of month following quarter |
| 0605 Annual Registration Fee | Yearly | 31 January |
| 2316 & 1604C (if with employees) | Annual | 31 January & 31 March |
| Inventory List & Books re-stamping | As required | Submit by 15 January if manual books closed |
Failure to file or pay leads to surcharge (25 % or 50 %), interest (6 % p.a.), and compromise penalties.
7. Special Considerations for Home-Based & Online Sellers
- RMC 60-2020 requires all online and home-based sellers, regardless of size, to register and update their COR.
- Online Platform Disclosure – You may need to report your website or social-media store URL on Form 1905.
- Barangay Zoning & HOA Rules – Ensure your subdivision or condominium by-laws allow retail activity. BIR may deny registration if local zoning is violated.
- Electronic Invoicing/Receipting (EIS) – Mandatory only for taxpayers with ₱ 100 M annual sales; voluntary pilot for MSMEs.
- Cash Register/POS – Not compulsory for manual invoice users, but must be registered (Form 1907) if you buy one.
8. Incentives & Relief
| Program | Benefit | How to Avail |
|---|---|---|
| BMBE (RA 9178) | Income-tax exemption; exemption from minimum wage law for employees; priority to DTI/SME loans | Register with city/municipality DTI BMBE Desk; present BMBE Certificate to BIR for annotation on COR. |
| CREATE Act – Small Business Corporation loans | Low-interest financing for inventory | Separate application with SB Corp. |
| Barangay / LGU Tax Holidays | Up to 2-year business-tax holiday in some cities | Check local ordinance. |
9. Penalties for Non-Registration
| Violation | Statutory Penalty |
|---|---|
| Failure to register, late registration | Fine ₱ 1,000 – ₱ 50,000 plus 6 months–2 years imprisonment (§ 258, NIRC) |
| Operating without receipts | Fine up to ₱ 50,000 and/or 2 years prison (§ 264) |
| Failure to pay annual registration fee | ₱ 1,000 compromise + 25 % surcharge + interest |
| Failure to post “Ask for Receipt” | ₱ 1,000 (first offense); ₱ 2,000 (second); closure order on third |
10. Frequently Asked Issues (FAQs)
| Q | A |
|---|---|
| I sell only during school-opening months—do I still need to register? | Yes. Intention to earn income, even seasonally, triggers registration (RMC 60-2020). You may file “No-operation” tax returns for idle months. |
| Can I use my personal receipts bought at bookstores? | No. Only BIR-authorized printed invoices/receipts bearing your TIN and COR details are valid. |
| What if my sales stay below ₱ 250 k? | You still file returns. The first ₱ 250 k of net taxable income is exempt inside the graduated-rate table, but registration and filing duties remain. |
| May I switch from 8 % to graduated rates mid-year? | No. The choice is irrevocable for the taxable year. You may change next calendar year via Q1 return. |
| Does BMBE status exempt me from VAT or percentage tax? | No. BMBE exemption covers income tax only. Business tax (VAT/percentage) still applies. |
11. One-Page Compliance Checklist
- ☐ DTI/SEC Registration
- ☐ Barangay & Mayor’s Permit (or BMBE Certificate)
- ☐ BIR Form 1901/1903 filed at RDO
- ☐ TIN issued/confirmed
- ☐ Paid ₱ 500 annual fee (Form 0605)
- ☐ Certificate of Registration (Form 2303) received
- ☐ Books of accounts stamped
- ☐ ATP approved & receipts printed
- ☐ Ask-for-Receipt notice displayed
- ☐ Tax types & filing calendar noted (e.g., 2551Q/1701Q)
- ☐ Optional: BMBE incentives annotated on COR
12. Practical Tips & Best Practices
- Use eBIRForms to generate tax returns; it is now mandatory for almost all manual filers.
- Set quarterly reminders for inventory counts—school supplies are prone to slow-moving stock.
- Track the ₱ 3 M VAT threshold—if you approach ₱ 2.7 M, consider switching to voluntary VAT early to credit input VAT on bulk notebook or printer-ink purchases.
- Digitize your receipts (scanned PDF + Excel log) to simplify reconciliation for tax audits.
- Attend BIR taxpayer education seminars offered free by your RDO to keep updated with revenue issuances.
13. Disclaimer
This article is for general informational purposes and does not constitute tax or legal advice. Tax rules evolve (e.g., pending CREATE Amendments after June 30 2025). Consult a Philippine Certified Public Accountant or tax lawyer, and verify any new BIR issuances before implementation.