BIR Registration Requirements for Sari-Sari Stores and Small Businesses (Philippine Context)

This article is a practical legal guide to registration with the Bureau of Internal Revenue (BIR) for sari-sari stores and other small enterprises. It explains who must register, when, where, and how; the documentary requirements; what taxes typically apply; invoicing and bookkeeping rules; post-registration compliance; updates; and common pitfalls. It is general information, not legal advice.

1) Who must register with the BIR

All persons engaged in trade or business in the Philippines must register with the BIR before commencing business, whether the business is a home-based sari-sari store, a market stall, an online seller, or a formal brick-and-mortar shop. This includes:

Sole proprietors (self-employed individuals)
Partnerships and corporations (including one-person corporations)
Cooperatives to the extent required by law (some enjoy tax privileges but still have registration and invoicing obligations)
Professionals (if practicing a profession) even if also running a store

Exceptions are narrow. E.g., an employee with compensation income alone is not a “business,” but once you sell goods or services as a going concern, you must register.

2) Timing and place of registration

When: On or before the start of business operations (e.g., stocking inventory and opening shop).
Where: The Revenue District Office (RDO) that has jurisdiction over your principal place of business (for a sari-sari store, usually your shop or residence if home-based). If you later move addresses or open branches, you must file a registration update.

3) Pre-BIR groundwork (non-BIR but usually required)

While BIR may accept applications in parallel, the typical order is:

Business name registration
- DTI (for sole proprietors) – Business Name Certificate
- SEC (for partnerships/corporations) – Articles and Certificate of Registration
Local government permits
- Barangay Clearance
- Mayor’s/Business Permit (City/Municipality)
Lease Contract or Proof of Address (e.g., utility bill, tax declaration for owned premises)

These are frequently requested by the BIR as supporting documents.

4) BIR registration forms and fees (entity-specific)

A) Sole proprietor / self-employed (typical for sari-sari store)

BIR Form 1901 (Application for Registration for self-employed individuals, estates, and trusts)
One (1) valid government-issued ID
DTI Business Name Certificate
Mayor’s/Business Permit (or proof of application if still being processed)
Proof of Address (lease, title/tax dec, latest utility bill)
Taxpayer Identification Number (TIN) – if you don’t have a TIN yet, it is issued with your registration.

B) Partnership/Corporation/OPC

BIR Form 1903
SEC Certificates and Articles/By-Laws
Mayor’s/Business Permit (or proof of application)
Proof of Address
TINs of officers/partners

Note on the Annual Registration Fee: The formerly common ₱500 Annual Registration Fee has been removed by law. Do not pay it unless the BIR reinstates it by statute in the future. (Penalties for non-payment are therefore inapplicable where the fee no longer exists.)

5) What you receive from the BIR

Upon approval, expect:

BIR Certificate of Registration (COR) – BIR Form 2303 listing your registered tax types (e.g., Income Tax, VAT or Percentage Tax, Withholding Tax if applicable).
“Ask for Receipt” Notice / BIR Notice to the Public – must be displayed conspicuously.
Stamps or acknowledgment of your registered Books of Accounts (see §8).

Keep a clean, visible copy of the COR at your store.

6) Choosing your tax regime: VAT vs. Non-VAT (Percentage Tax) and the 8% option

A) VAT vs. Non-VAT

VAT taxpayer: Generally mandatory if your gross sales/receipts exceed the VAT threshold within the 12-month period (historically ₱3,000,000). You may also opt to register voluntarily as VAT even below the threshold.
Non-VAT taxpayer: If you are below the VAT threshold and do not opt into VAT, you are generally subject to Percentage Tax on gross sales/receipts at the prevailing rate.
- Sari-sari stores typically start as Non-VAT unless they project sales above the threshold or have business reasons to register as VAT (e.g., to claim input VAT on large purchases).

Practical tip: If most of your customers are end-consumers (who cannot claim input VAT), remaining Non-VAT often keeps prices simpler. If you sell to VAT-registered businesses or import a lot of VAT-able inputs, voluntary VAT may make sense.

B) 8% Income Tax option (individuals only)

Sole proprietors under the threshold may choose the 8% income tax on gross sales/receipts minus ₱250,000, in lieu of graduated income tax and percentage tax, subject to statutory conditions.
The election is made upon registration or the first quarter filing for the year; changing mid-year is restricted. Assess carefully because the 8% option removes expense deductions but simplifies compliance.

Rates and thresholds change by law. Always check the current VAT threshold and percentage tax rate before electing.

7) Invoicing/receipting: Authority to Print (ATP) or POS/CAS registration

A) Primary sales document

Philippine tax rules recognize a primary sales document (historically, Invoices for sale of goods and Official Receipts for services). Recent reforms have shifted toward “Invoices” as the principal document even for services. Many small retailers (sari-sari) use Sales Invoices as the required proof of sale.

B) How to comply

You must do one of the following before issuing any sales document:

Apply for an Authority to Print (ATP) and have your Sales Invoices (and other accountable forms) printed by a BIR-accredited printer with your TIN and COR details; or
Register your POS/Accounting System (Computerized Accounting System/CAS or its successor regime) with the BIR, including Permit/Notification to Use.

What your invoice must show, at minimum:

Business name, trade name (if any), business address, TIN, and BIR COR details
Consecutive serial numbers and date of transaction
Description and quantity of goods sold; unit price and amount
For VAT taxpayers: VAT breakdown and “VAT-registered TIN” legend; for Non-VAT: required “NON-VAT REG” legends and percentage tax/VAT-exempt notations as applicable

Never issue unregistered or self-printed receipts/invoices without ATP or system registration. Penalties include compromise penalties, surcharges, and possible temporary closure.

8) Books of accounts

All businesses must keep Books of Accounts and register them with the BIR. Options:

Manual books (e.g., Cash Receipt Journal, Cash Disbursement Journal, General Journal, General Ledger; small retailers often keep at least CRJ, CDJ, and a simple Ledger)
Loose-leaf (printed from spreadsheets/word processors) – requires BIR authorization and periodic submission/printing protocols
Computerized (CAS or equivalent) – registration/permit or notification to use, with back-up and reporting requirements

Timing: Register books upon or shortly after issuance of your COR, before using them. Keep them updated, in English or Filipino, and retain for at least the statutory period (generally 10 years from the close of the taxable year, with electronic storage rules if computerized).

9) Withholding obligations (if you have staff or pay certain payees)

Compensation withholding: If you hire employees, you must register for and withhold Expanded/Final/Compensation Taxes as applicable, file returns, and issue BIR Form 2316 to employees yearly.
Creditable withholding (Expanded): Certain payments to suppliers/service providers require withholding at prescribed rates (e.g., rentals, professional fees) if you are a Top Withholding Agent (TWA) or otherwise required. Many micro-retailers are not TWAs, but confirm your status.
Final withholding: Applies to specific passive income or transactions by law.

If you have no employees and no withholding events, you generally do not register for withholding tax types.

10) Post-registration filings and payments: what a sari-sari store typically files

The exact calendar depends on your tax types as per your COR:

Income Tax (individual – sole proprietor)
- Quarterly income tax return; and
- Annual income tax return, with the chosen regime (graduated rates with optional OSD/Itemized deductions, or the 8% option if validly elected)
Percentage Tax (if Non-VAT) – filed on the statutory schedule for the applicable period at the prevailing rate
VAT (if VAT-registered) – quarterly VAT returns with proper output/input VAT reporting
Withholding Tax (if applicable) – monthly/quarterly returns; annual information returns
Books and invoicing – maintain and preserve; submit Summary Lists and other reports if required by your system/permit category

Compliance calendars have been simplified over time (e.g., more quarterly and fewer monthly forms), but always check your current form numbers and due dates printed or referenced in your COR and the latest revenue issuances.

11) Registration updates, closures, and branch handling

Change of trade name, address, tax types, or books/system → BIR Form 1905 (Registration Update).
Opening a branch (e.g., a second tindahan) → register a branch at the RDO of the branch location; obtain branch COR, ATP/POS registration, and books for that branch.
Temporary closure/cessation → file for cancellation of registration with inventory reconciliation, surrender of unused invoices, final returns, and settlement of taxes.
Transfer of RDO (e.g., moving city) – file 1905 to transfer your tax records.

12) Penalties and enforcement

Common violations and typical consequences include:

Failure to register – compromise penalties, surcharges, and interest
Failure to issue registered invoices – penalties per transaction; repeat offenses risk temporary closure (under enforcement programs like “Oplan Kandado”)
Using unregistered POS or unauthorized receipts – penalties and possible closure
Late filing/payment – surcharge (generally 25% or 50% for willful neglect), 12% per annum interest computed on a daily basis (statutory rate subject to change), plus compromise penalties
Failure to keep books – penalties and jeopardy assessments
VAT/percentage tax misclassification – deficiency assessments and penalties

13) Practical checklists

A) Initial Registration (Sole Proprietor – Sari-Sari Store)

DTI Business Name Certificate
Barangay Clearance and Mayor’s/Business Permit (or proof of application)
Valid government ID
Proof of address (lease; title/tax dec; utility bill)
BIR Form 1901 (TIN issuance if none yet)
Choose tax types: Non-VAT (Percentage Tax) vs VAT; consider 8% option (if eligible)
Register Books of Accounts (manual, loose-leaf, or computerized)
ATP for printed Sales Invoices or register POS/CAS
Display BIR COR and Ask-for-Receipt Notice in store

B) Monthly/Quarterly Routine

Log daily sales; reconcile cash and inventory
Issue registered invoices for all sales upon request (retailers must be ready to issue)
File and pay Percentage Tax or VAT per schedule
File Income Tax quarterly; pay creditable tax, if any
Withhold and remit taxes if you have employees or are required to withhold on certain payments
Keep books updated; back up if computerized

14) Special regimes and incentives

BMBE (Barangay Micro Business Enterprise): May enjoy income tax exemption on income from operations once BMBE Certificate is secured from the DTI/LGU per the BMBE law. Registration with BIR is still required for invoicing, bookkeeping, and other taxes (e.g., percentage tax/VAT, withholding, if applicable).
Cooperatives and social enterprises: Some enjoy tax privileges under special laws, but still must register and comply with invoicing and bookkeeping rules unless expressly exempted.

15) Record-keeping and audit readiness

Retain invoices, books, and supporting documents for the statutory retention period (commonly 10 years).
For computerized systems, keep image copies and audit trails as your permit/notification requires.
Maintain an inventory log (beginning, purchases, ending) to support gross income computations—very useful for sari-sari stores.

16) Frequently asked questions (focused on micro-retail)

Q: I only sell to neighbors; do I still need invoices? A: Yes. You must be ready to issue a registered Sales Invoice for each sale upon demand, and you should issue for sales that meet documentation thresholds or when your customer asks. Keep a bound pad with serial numbers or a registered POS.

Q: I’m below the VAT threshold. Can I still choose VAT? A: Yes, voluntary VAT registration is allowed, but it binds you to VAT compliance for a minimum period (you cannot simply drop VAT mid-year). Choose carefully.

Q: Can I use a simple notebook as a book of accounts? A: Only if it is a registered manual book with proper columns and headings. Plain, unregistered notebooks do not satisfy the law.

Q: Do I still pay the ₱500 annual registration fee? A: No. The Annual Registration Fee has been removed by law. Focus on filing the correct returns on time and maintaining registered invoicing and books.

Q: I sell online and in a small stall. Do I register both? A: Register your principal place of business and add a branch for each additional fixed place. For purely online sales, register the physical place where the business is based.

17) A simple decision path (for sari-sari stores)

Will gross sales exceed the VAT threshold?
- Yes → Register as VAT; use VAT invoices; file quarterly VAT.
- No → Continue to Step 2.
Prefer simplicity with mainly end-consumer buyers?
- Yes → Register as Non-VAT (Percentage Tax); consider the 8% option if individual and eligible.
- No → Consider voluntary VAT (e.g., if suppliers/clients are VAT-registered and you want to claim input VAT).
Choose invoicing route:
- ATP + printed Sales Invoices or BIR-registered POS/CAS.
Register books; keep daily sales and inventory; file returns per schedule.

18) Common pitfalls to avoid

Operating without a COR and registered invoices
Issuing unregistered or self-printed receipts
Failing to register books or to write entries consistently
Misclassifying as Non-VAT when you already exceeded the threshold
Missing the first filing deadlines after registration (even with no sales, many returns require “no-payment” filing or zero returns)
Forgetting to update registration when you change address, open a branch, change business name, or shift tax types

19) Quick compliance calendar snapshot (illustrative)

Exact form numbers and due dates change. Always confirm your current obligations as listed on your COR and the latest BIR issuances.

Percentage Tax (Non-VAT): periodic return on statutory due date
VAT (if VAT-registered): quarterly VAT return
Income Tax (individual): Quarterly and Annual returns
Withholding (if any): monthly/quarterly and annual information returns
Books: continuous; preserve for at least 10 years

20) Final reminders

Register before selling.
Display your COR and Notice and use only registered invoices/POS.
Keep your books and file on time.
Don’t pay an annual registration fee under current law unless the law changes.
When in doubt, document and update. A simple paper trail prevents most penalties.

If you want, tell me your planned setup (projected annual sales, whether you’ll hire staff, and if you’ll mainly sell to end-consumers or businesses). I can draft a tailored checklist and a first-year filing calendar that fits your exact tax types.