BIR Tax Registration Requirements for Sari-Sari Stores in the Philippines A practical legal guide for sari-sari store owners, accountants, and business advisers
1. Why registration matters
A sari-sari store is a business establishment under the National Internal Revenue Code (NIRC). Even if it is a tiny stall attached to your house, the moment you sell goods “in the course of trade or business,” the Bureau of Internal Revenue (BIR) considers you engaged in commerce and therefore subject to:
- Primary registration (Sec. 236, NIRC)
- Bookkeeping and invoicing rules (Secs. 113–116, NIRC; RR No. 7-2012)
- Periodic tax returns (percentage tax and/or VAT, income tax, withholding taxes)
Failure to register exposes the proprietor to closure, penalties of ₱20 000–₱50 000, surcharge/interest on every unfiled return, and—in aggravated cases—criminal prosecution (Secs. 254-256, 258 NIRC).
2. Legal sources you should know
| Instrument | Key points for sari-sari stores |
|---|---|
| NIRC, as amended (Tax Code) | Sec. 236 (registration), Secs. 113-121 (VAT & percentage tax), Sec. 258 (closure) |
| Revenue Regulations (RR) | • RR 7-2012 – consolidated rules on primary registration • RR 11-2018 – invoicing/ATP reform • RR 4-2021 & RMC No. 79-2022 – CREATE Act transitory 1 % percentage tax (July 1 2020 – June 30 2023) |
| Republic Act 9178 (BMBE Law) | Income-tax exemption for Barangay Micro Business Enterprises, but registration with BIR remains mandatory |
| Republic Act 11534 (CREATE) | Lower corporate rates; reverted percentage tax to 3 % after June 30 2023 |
| Local Government Code | Barangay clearance and Mayor’s/Business Permit are pre-requisites to BIR registration |
3. Before you go to the BIR
Register your business name
- Sole proprietors: DTI Business Name Certificate (online via BNRS Next Gen).
- Partnerships/Corporations: SEC Certificate of Registration.
Secure local permits
- Barangay Clearance where the store is situated.
- Mayor’s/Business Permit (city or municipal hall).
Keep at least two photocopies of each document; the BIR keeps one set and stamps the other “received.”
4. Choosing your tax profile
| Threshold | Default tax type | Options |
|---|---|---|
| Gross annual sales ≤ ₱3 000 000 | Non-VAT taxpayer → 3 % Percentage Tax (BIR Form 2551Q) | • May opt to register as VAT if you expect to cross the threshold or if your suppliers are VAT-registered (Sec. 109, NIRC). • May register as BMBE to enjoy income-tax exemption (needs DTI BMBE Certificate and BIR confirmation). |
| Gross > ₱3 000 000 | Must register as VAT taxpayer (12 % VAT, BIR Form 2550Q) | None (VAT is mandatory once the threshold is breached within any 12-month period). |
Tip: Many sari-sari stores remain non-VAT because their margins are low and their customers cannot claim input VAT anyway.
5. Primary registration with the BIR
| Step | Form / Fee | What to bring / do |
|---|---|---|
| 1. Get / update TIN | BIR Form 1901 (single proprietor) | • DTI/SEC papers, barangay & mayor’s permits, valid ID, proof of address (lease, tax declaration, utility bill). |
| 2. Pay the ₱500 Annual Registration Fee (ARF) | BIR Form 0605 + payment to AAB/e-FPS GCash/LandBank | Pay on or before 31 January every year. -First-time registrants pay upon filing Form 1901. |
| 3. Register Books of Accounts | BIR Form 1905 | Choose: (a) One bound ledger + journal; (b) Columnar book; (c) Loose-leaf; (d) Computerized (CAS) if you have a POS. Stamp-receipting is while-you-wait. |
| 4. Apply for Authority to Print (ATP) or adopt POS | BIR Form 1906 | • If you have NO POS: appoint an Accredited Printer and order printed receipts/invoices good for 5 yrs or until exhausted. • If you HAVE a POS/CAS: secure a Permit to Use. |
| 5. Secure Certificate of Registration (COR, BIR Form 2303) | — | Shows your registered tax types (Income Tax, Percentage Tax or VAT, Withholding Tax). Must be conspicuously displayed in the store. |
Deadline: The law requires registration before the start of business or within 30 days from DTI/SEC registration—whichever is earlier (Sec. 236-A, NIRC).
6. Periodic compliance calendar (non-VAT sari-sari store)
| Return | Form | Frequency | Usual due date* |
|---|---|---|---|
| Percentage Tax | 2551Q | Quarterly | 25th day following the close of the quarter |
| Income Tax (graduated rates) | 1701Q (1st & 2nd qtrs.) | Quarterly | 15th May & 15th Aug. |
| 1701-A or 1701 | Annual | 15th April of the following year | |
| Withholding Tax on Compensation (if you have staff) | 1601-C | Monthly | On or before the 10th of the following month (e-FPS filers: 15th) |
| Alphalist (employees) | 1604-C | Annual | 31st January of the following year |
*If the deadline falls on a weekend/holiday, file and pay on the next working day (Sec. 31, Administrative Code).
VAT-registered stores follow the same calendar except they file 2550Q (VAT Return) instead of 2551Q.
7. Books, records, and receipt rules
- Manual books must be bound and stamped before use; no skipping of pages.
- Retention: 10 years from the last entry (Sec. 203 & 222, NIRC; RMC No. 57-2015).
- Receipts ≤ ₱100 may be consolidated in a tape reading, but you must still issue a receipt if the buyer asks.
- Lost receipts/books? File an affidavit of loss within 30 days and apply for re-printing/re-stamping.
8. Barangay Micro Business Enterprise (BMBE) option
If capital (excluding land) ≤ ₱3 million and you register as a BMBE under RA 9178:
- Income tax on operations is exempt—but you must still file a return (with “EXEMPT” written).
- You continue to pay percentage tax or VAT and withhold taxes on wages.
- File BIR Form 1901 (as BMBE) plus the DTI-issued BMBE Certificate.
- Renew your BMBE Certificate with DTI every two years; present the renewal to BIR so your COR will continue to reflect the exemption.
9. Updates, closure, and transfer
| Scenario | Form | Notes |
|---|---|---|
| Change of trade name, address, tax type | 1905 | File within 30 days of change; surrender old COR for re-printing. |
| Cessation / sale of store | 1905 (closure) + inventory list & unused receipts | File final returns, pay all taxes due, and surrender unused invoices for destruction. |
| Exceeding ₱3 million threshold | VAT application via 1905 within 10 days after the month your cumulative sales hit the threshold. |
10. Penalties snapshot
| Violation | Basic penalty | Additional | Legal basis |
|---|---|---|---|
| Failure to register | ₱20 000-₱50 000 plus closure of store | Up to 2 yrs imprisonment (court-imposed) | Sec. 258, NIRC |
| Late return/payment | 25 % surcharge + 12 % interest p.a. + compromise ₱1 000-₱25 000 | N/A | Sec. 248-249, NIRC |
| Failure to issue receipts | ₱1 000 per receipt but not < ₱25 000 total | Criminal liability | Sec. 264, NIRC |
| Failure to keep books | ₱1 000-₱25 000 | — | Sec. 264, NIRC |
11. Practical compliance tips
- Use eBIRForms or the BIR online tax payment channels (GCash, Maya, LandBank Link.Biz) to avoid long queues.
- Maintain a simple cash-receipt journal: date, item sold, amount, receipt number. Auditors love clear, legible books.
- Segregate personal and business funds. Open a separate e-wallet or small deposit account; it simplifies bank reconciliation.
- Track the ₱3 million VAT threshold monthly. Once you plausibly project you’ll exceed it within 12 months, consider voluntary VAT registration to avoid hefty retroactive assessment.
- If you hire even one helper, register with SSS, PhilHealth, Pag-IBIG and withhold/ remit contributions—these are examined together with BIR audits.
- Join the local BIR “Taxpayer Education” webinar. Many RDOs run free orientation sessions every quarter; attendance is noted and softens the impact of minor first-year errors.
12. Frequently-asked questions
| Question | Short answer |
|---|---|
| Can I operate first and register later? | Legally no. Registration must precede the first sale. In practice, inspectors usually give a five-day notice, but penalties start counting from day one of operations. |
| Is the ₱500 Annual Registration Fee waived for micro-businesses? | No. The CREATE Act did not repeal Sec. 236(B) of the NIRC. Everyone except cooperatives pays it. |
| Do I have to print receipts if my sales are mostly sachets and candies? | Yes, but you may apply to use BIR-printed cash register tapes or simplified receipt booklets good for ₱100 or less transactions (RR 11-2018). |
| What if my income is below the personal exemption (₱250 000)? | You still file returns. The graduated income-tax table gives you zero tax due, but filing is mandatory. |
13. Conclusion
Registering with the BIR may feel daunting, but the process for a sari-sari store boils down to five one-time steps (TIN, ARF, books, receipts, COR) and a short quarterly routine (2551Q/2550Q, 1701Q, withholding returns). Once you internalize the calendar and keep tidy books, compliance becomes almost clerical—and it keeps your store free from surprise closures and mounting penalties.
Remember: The simplest mistake—an unregistered receipt or a missed 25th-day filing—can snowball into thousands of pesos. Treat registration not as red tape but as inexpensive insurance that protects your livelihood.
This article reflects laws and BIR issuances in force as of June 9 2025. Tax rules change; consult your Revenue District Office or a licensed tax professional for case-specific advice.