Working as a freelancer has some major advantages like being your own employer, a larger share of the profits, and managing your own time. However, it also comes with certain disadvantages such as managing your own taxes, which is often overlooked by non-freelancers who have human resource departments to do this for them.
1. Apply for TIN (Form 1901 if unregistered) / Update Personal Information (Form 1905 if registered)
(If unregistered; Online Method) Register online and personally go to the BIR Office to get the TIN ID
(If unregistered; Manual Method) Manually fill out and submit the forms yourself to the BIR Office
Note: If you work as both employed and self-employed, you can declare yourself as a “mixed-income” earner
(If registered) Update your personal information such as changing your registered address and perhaps change your RDO. (also applicable if you lose your TIN ID)
2. Pay Registration Fee for the Certificate of Registration (Form 0605)
This is an annual Php500 fee paid every January and you can pay via authorized Agent Banks of your RDO. Make sure to keep a copy of the payment form and the receipt and prepare 3 photocopies of each.
3. Get Occupational Tax Receipt
This is required of online freelancers in place of DTI registration and a mayor’s permit, and you can get this from either the municipal or city hall. Claim your OTR and keep it and a photocopy for submission to the BIR (the original stays with you).
If you are a licensed professional you’ll be using a Professional Tax Receipt instead, just note that this will cost more.
4. Buy Books of Accounts
Buy a journal and a ledger from either the BIR Office or any bookstore and have these stamped and signed at the BIR.
5. Submit the Requirements
Head over to the BIR and have the following forms ready:[1901 or 1905], 0605 with its bank receipt (original and photocopy), Occupational Tax Receipt (original and photocopy), Photocopy of NSO Birth Certificate, Photocopy of Marriage Cerificate (if married), your Books of Accounts.
6. Attend the Required Seminar
Attend a required Tax Filing seminar that takes about one to two hours. You can inquire at your RDO on the schedule for the self-employed, and have any burning tax-related questions handy since you’ll get a chance to relay them to a BIR Officer in-charge during the lecture.
7. Get your Certificate of Registration
Either immediately or possibly a few days after the seminar, you’ll get your Certificate of Registration. All that’s left to do at this point is to pay Php15.00 for a documentation stamp from the BIR that will be attached to your COR.
8. Print your receipts (Form 1906)
After accomplishing steps 1-7, you can now have your receipts and invoices printed. However, you’ll need to fill out form 1906 along with a photocopy of form 0605 with the bank receipt and a photocopy of your COR. Submit those to finally have your official receipts printed in BIR Accredited Printers. These receipts will be valid for 5 years and will cost around Php 700-1000 for 10 booklets. Just note that the minimum order quantity for printed booklets may vary depending on the printing press you go to.
After all that, you’re good to go! Paying your taxes is one great way to becoming a legit freelancer/business owner. Do the right thing, and pay your taxes! Indeed a freelancer's life may be daunting, but with ALLCARE's benefits like an HMO plan, Grab promo codes, and more, you won't be completely alone.