Every year established businesses must renew their mayor’s/business permits if they want to continue operating. This annual business permit renewal is done around the same time as the BIR registration renewal.
Experienced business owners know that it is better to prepare and renew their permits ahead of the deadline. This year, the permit renewal deadline is on January 20.
Failure to comply with BIR registration and Business Permit renewals on or before the deadline will result in these penalties:
- A 25% surcharge (meaning, an additional charge) on renewal fees, taxes, and charges
- An added 2% interest per month of delay
For more serious charges, such as where a business was operating for years without renewing their permits, the Local Government Unit can confiscate the business’ assets and suspend the business until it has settled its outstanding obligations.
How long does the business permit renewal process take?
This actually depends on how busy and efficient your local government units are in processing your documents. Usually, a new mayor’s permit takes about two to three weeks to be released.
To get started, you will have to go to three government offices to obtain the following:
1. Barangay Office – Barangay Permit
Requirements for barangay permit renewal:
- Last year’s barangay permit, original and photocopy
- Last year’s barangay permit official receipt, original and photocopy
- Completely filled out application form
- Documents required on the Barangay Permit application form
You can easily finish this renewal in half a day. The trick is to get the application form in advance, and prepare the required documents listed there.
Once you’ve submitted all the listed documents above, you can just pay for the barangay permit renewal fee. Prepare for a renewal fee of around P500. Wait for the barangay officer assessment, and you should be all set with your new Barangay Permit for 2020.
2. Mayor’s Office – Business Permit
Requirements for business permit renewal:
- Last year’s Mayor’s Permit, original and photocopy
- Last year’s Mayor’s Permit official receipt, original and photocopy
- New Barangay Permit, original and photocopy
- Community Tax Certificate with Gross Receipt/Cedula
- Last Year’s Audited Financial Statement (applicable to Partnerships and Corporations)
- Last Year’s Quarterly VAT Return
- BIR Clearance
- SSS Clearance
- Environmental Compliance Certificate (ECC), or a Certificate of Non-Coverage (CNC) (if applicable)
- Sanitary Permit (if applicable to your business)
Again, if you are serious about speeding up your renewal process, you can visit your local city hall ahead, to ask for the application form, and know the complete document requirements. You can then go on another day to submit the full and complete documents.
You have the option to pay the business permit in full, or in quarterly installments. After the payment, you will be given the official receipt which you have to keep for next year’s renewal requirement.
Note that the business permit fees will be based on your gross revenue from the previous year. this is why you will be required to submit official reports such as a quarterly VAT return. The audited financial statement will also be assessed to see if you have correctly or incorrectly declared your revenue. Depending on the assessment, you will be charged with penalty fees if you have under-declared your revenue.
Your new business permit will be released within two to three weeks, depending on your city hall’s number of applications, and efficiency.
3. Bureau of Internal Revenue (BIR) – BIR Registration
This is the last step, and all you will need to submit is the filled-out BIR form 0605. Download the updated BIR form 0605 here.
No need to wait in line to pay for the renewal because all you need to do is pay the renewal fee in any of BIR’s Authorized Agent Bank (AAB). Once you’ve submitted the BIR Form 0605 (Payment Form), you’re all set with your new business registration permits for 2020.
You can find the list of BIR’s AABs nationwide, here.