Simple Step-by-Step Guide for Online Sellers in the Philippines
(Based on the BIR Taxpayer's Guide for Online Sellers)
This guide explains the 3 main things every online seller must do:
- • Register your business
- • Keep proper records and issue receipts
- • File and pay taxes on time
⚠️ Failing to register or file taxes can lead to fines up to ₱50,000, surcharges, interest, or criminal penalties.
STEP 1 — Register Your Business
Before selling online, you must register with the government.
1.1 Register your business name
Choose one:
This gives your business a legal identity.
1.2 Register with BIR
After DTI or SEC registration, register with the Bureau of Internal Revenue (BIR).
You can do this through:
- BIR ORUS (Online Registration and Update System)
- Your Revenue District Office (RDO)
Steps:
- Create an account in BIR ORUS
- Select New Registration
- Fill out the form:
| Business Type | BIR Form |
|---|---|
| Sole proprietor / freelancer | Form 1901 |
| Corporation / partnership | Form 1903 |
- Upload required documents.
Common documents needed:
- Valid government ID
- Business registration (DTI or SEC)
- Proof of address
- Sample invoice or receipt
- Special Power of Attorney (if representative)
- Pay the ₱30 Documentary Stamp Tax (DST) online.
- After approval, you will receive:
- TIN (Tax Identification Number)
- Certificate of Registration (COR)
- Authority to Print Receipts
STEP 2 — Secure Official Receipts or Invoices
Every sale must have an official receipt or invoice.
Options:
Option 1 — Print your own receipts
Apply for:
- Authority to Print (ATP)
- Submit BIR Form 1906
Option 2 — Buy BIR Printed Invoices (BPI)
Receipts must include:
- Business name
- Address
- TIN
- Receipt number
- Date
- Amount
Issuing receipts is mandatory for every sale.
STEP 3 — Register Books of Accounts
You must keep books where all sales and expenses are recorded.
Examples:
- Cash receipts journal
- Sales journal
- General ledger
- Expenses journal
Options:
- Manual books
- Loose-leaf books
- Computerized accounting system
These must be registered with the BIR.
STEP 4 — Understand Your Taxes
Most small online sellers pay one of these taxes:
| Tax Type | Who Usually Pays |
|---|---|
| 8% Income Tax | Small businesses under ₱3M |
| 3% Percentage Tax | Non-VAT businesses |
| 12% VAT | Businesses earning over ₱3M |
Your COR will show which taxes you must file.
STEP 5 — File Tax Returns
You must file taxes monthly, quarterly, or annually depending on your tax type.
Common forms for online sellers:
| Form | Purpose |
|---|---|
| 2551Q | Percentage tax (quarterly) |
| 2550Q | VAT return |
| 1701 / 1702 | Annual income tax |
| 0619E / 0619F | Withholding tax |
STEP 6 — File Taxes Online
You can file taxes through:
- eBIRForms
- eFPS (Electronic Filing and Payment System)
- Manual filing at authorized banks
The government now encourages electronic filing and payment under the Ease of Paying Taxes Act.
STEP 7 — Pay Your Taxes
Taxes can be paid through:
- Authorized Agent Banks
- GCash
- Maya
- Landbank
- UnionBank
- Other BIR e-payment channels
STEP 8 — Maintain Records
Keep copies of:
- Sales records
- Expense receipts
- Tax returns
- Financial statements
These records must be kept for at least 5 years.
STEP 9 — If You Sell on Platforms (Shopee, Lazada, etc.)
Online marketplaces may withhold taxes from your sales.
Important rule:
If your annual remittance exceeds ₱500,000, platforms may withhold 1% tax on remittances.
To avoid withholding:
Submit a Sworn Declaration stating your sales are below ₱500,000.
Simple Compliance Checklist for Online Sellers
- ✔ Register business (DTI or SEC)
- ✔ Register with BIR
- ✔ Get TIN and COR
- ✔ Print official receipts
- ✔ Register books of accounts
- ✔ Record all sales and expenses
- ✔ File taxes on time
- ✔ Pay taxes through e-payment or bank
✅ Tip for small sellers:
If your sales are small, choose the 8% income tax option to avoid complicated VAT and percentage tax computations.
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