New rules make closing business easier – BIR
MANILA, Philippines — The Bureau of Internal Revenue (BIR) has issued new guidelines simplifying the closure of businesses and cancellation of tax registrations, including faster tax clearance releases and the prevention of further penalty buildup.
Under Revenue Memorandum Circular No. 047-2026, the BIR said the new guidelines form part of its “Ease of Closing Business” reform aimed at making tax administration more investor and business-friendly.
Taxpayers may apply for the closure or cancellation of their business registration either electronically through email or the BIR’s online facilities, or manually by submitting documents to the concerned Revenue District Office.
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Requirements
Required documents include the application form, original BIR registration documents and permits, list of ending inventory of goods and supplies, as well as unused invoices and other supplementary or accounting forms.
Once complete requirements are submitted, the business registration will immediately be placed under “deregistered” status, preventing the further accumulation of penalties, although the BIR may still conduct audits for outstanding tax liabilities.
For micro taxpayers, or those with gross sales not exceeding P3 million, tax clearances will be issued within three working days upon submission of complete requirements. Their status will also be updated to “closed,” and they will no longer be subject to mandatory audits.
Meanwhile, taxpayers with pending audits will only be issued tax clearances once the audit process has been completed or terminated.
In a statement Tuesday night, BIR Commissioner Charlito Martin Mendoza said the new guidelines are part of the agency’s reform efforts to support businesses “through every stage of the business life cycle.”
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“If we make it easier to start and operate a business, then the government must also make it easier to properly close BIR registration once operations have already ceased,” Mendoza said.
The reform is part of Republic Act No. 11976, or the “Ease of Paying Taxes Act,” which was signed into law in January 2024.
The law aims to encourage taxpayers to voluntarily comply with the tax system by streamlining processes and minimizing burden, which could help boost the country’s revenue collections.
From January to April, the BIR’s revenue collections reached P422.4 billion, accounting for more than a third of its 2026 target of P3.431 trillion.
Collections are expected to further increase with the conclusion of the annual income tax return filing season on May 15. /atm
