How To Register the BIR as a Freelancer in the Philippines 2023 (Plus Five Tips)

Freelance in the Philippines There has been a significant shift in the number of Filipinos who favor working independently rather than as an...

Freelance in the Philippines

There has been a significant shift in the number of Filipinos who favor working independently rather than as an employer in an office. Since the epidemic, more people are relocating for remote employment, which is typically freelancing. In the Philippine economy, the market for independent contractors will expand by 35% in 2022. demonstrating the rising value of independent contractors.

More Filipinos choose remote employment so they can manage their schedules and spend more time with their family. As independent contractors, they are able to work when it suits them and maintain a healthy work-life balance.

being capable of managing the workload they decide to accept. To avoid overworking yourself, freelancers can take care of their mental health. 63 percent of respondents in the Philippines to a study on mental well-being performed by Rakuten Insight in May 2022 reported feeling more stressed or nervous over the previous 12 months. The same poll also found that Filipinos preferred to increase their sleep quality and engage in regular exercise.

Who is considered a Freelancer?

An independent worker is referred to as a freelancer. They are not bound by a lengthy agreement. They typically work on a per-project basis, which gives them more freedom to manage their time and clientele.

However, you can also find freelancers using an agency to connect with clients looking for their abilities all around the world.

Small company entrepreneurs are similar to freelancers. You must pay freelance taxes whether you have started your own firm or outsourced your expertise. Different categories of freelance work are possible.

The various expert categories of freelancers are as follows:

1. Administrative, moderating, digital marketing, and SEO virtual assistants
2. Writers include bloggers, content creators, screenwriters, editors, and journalists.
3. Developers: front-end, back-end, full-stack, mobile, software engineer
4. Designers, illustrators, models, video producers, event planners, actors, filmmakers, and photo editors are examples of creatives.

While there are those who are what we refer to as solitary or independent

1. The sale of baked goods
2. Selling something that you made yourself
3. Owner of a food cart Fashion designer Printing

The main distinction is that independent contractors are not needed to obtain a mayor's permit or barangay clearance.

Registering your freelance job in the Philippines

Taxes must be paid by all residents and working citizens in the Philippines. Tax evasion is a serious offense that carries a sentence of two to four years in jail. Additionally, there may be penalties, interest, and compromise fees that together would be more than the initial tax obligation.

However, some people are excluded from paying freelancing taxes. For instance, individuals who are regarded as non-resident aliens, i.e., those who do not possess Philippine citizenship or dwell there.

You won't be compelled to pay taxes while you were abroad, regardless of why you left the nation. If your annual income is 250,000 pesos or less, you can also be excluded.

You must pay your taxes if you don't fit into any of these categories.

So how do you register in BIR as a freelancer in the Philippines?

Starting to pay taxes is never too late. Here is a brief starting point guide. The following prerequisites must be met in order for you to register as a freelancer for BIR.

1. The number used to identify a taxpayer.

• This is typically what you have before working 

2. An occupational tax receipt

• This is available from the municipal building. Bring a valid ID along, and depending on the municipality, pay the 200–450 peso cost. If your municipality doesn't offer OTR, just skip the next three. 

3. A valid ID that includes a birthdate and address

• Verify that your current address matches the address on your valid ID.
• You can use your passport, license, national ID, or barangay certificate as examples. Furthermore, you might bring your electricity.

4. Application for Registration: BIR Form 1901

• Form 5 should be printed twice and signed. 

5. BIR Form 0605 - Annual Registration Fee

• The submission of this form will be accompanied by a 500 peso annual charge.

6. Application for Authorization to Print Receipts and Invoices - BIR Form 1906

• Every time receipts and invoices need to be printed, taxpayers must complete this form.

7. For the Registration of Books of Accounts, use BIR Form 1905

• All taxpayers who wish to replace a missing TIN Card or Certificate of Registration or update/change any data or information must fill out this form.
• Whether it comes from the head office or a branch.

8. Intention to use the tax option of 8%

• A letter using this template should be brought in one copy.

9. DTI Business Name Registration Certificate

• DTI is used for optional loan and branding purposes. No one else may use that name; it is yours to use throughout the nation. It is advised that you obtain a DTI Certificate of Registration because some lenders could require one. It can be done online with GCash as payment.
• A PDF of the certificate will be delivered. https://bnrs.dti.gov.ph/registration

10. Hiring a professional to complete all of this may cost more than $3,000 or using DTI could cost more than $5,000.

You are now registered once you have fulfilled all of these requirements and submitted everything to the BIR. Congratulations!

Register in BIR Now

Freelancers enjoy a variety of advantages. Don't pass up this opportunity to earn a good wage working flexible hours. Prepare the aforementioned needs, and you may easily register in no time.

Working for yourself is a tremendously fulfilling experience that allows you to spend more time with your loved ones.

Therefore, you can read about how to begin as a virtual assistant here if you've been considering working as a freelancer online.

In order to share their expertise with clients abroad, Filipino specialists are always in demand at Pineapple. Visit our career page right now; we look forward to working with you!

Here are the five important tips for registering as a freelancer with BIR in the Philippines:

1. Understand your tax obligations

Familiarize yourself with the tax laws and regulations that apply to your freelance work. Know the tax rates, deadlines, and any exemptions or deductions you may qualify for.

2. Gather necessary documents

Prepare the required documents such as your Taxpayer Identification Number (TIN), occupational tax receipt, valid ID, and completed application forms like BIR Form 1901 (Application for Registration).

3. Pay the annual registration fee

Along with your application, submit BIR Form 0605 and pay the annual registration fee of 500 pesos.

4. Register your books of accounts

If you plan to maintain books of accounts for your freelance business, fill out BIR Form 1905 for their registration.

5. Consider professional assistance

While optional, hiring a professional, such as an accountant or tax consultant, can help ensure a smooth and accurate registration process.

Remember to stay updated with any changes in tax regulations and comply with your ongoing tax obligations as a freelancer in the Philippines. Good luck with your registration!