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BIR: A Guide on Business Closure

Updated: Nov 8

This article explains the steps and requirements for filing a business closure (also known as a cessation of registration) with the BIR

Business closures occur for a variety of reasons, but regardless of the reason, it is critical to understand that you cannot simply cease operations. It is your responsibility as a business owner or self-employed individual running a freelance business to perform the due diligence required to close the business properly. Let's look at what this means and what is required to do so.

What is the Closure of Business?

Closure of business or cessation of registration indicates that you wish to close your business and cease all tax filings with the BIR. It's also referred to as "retiring a business" at times. This means you will no longer operate as a self-employed professional or freelancer, and you will no longer be required to pay taxes. It can happen for a variety of reasons. Most of the time, it's a financial issue, such as a loss or low profits. It essentially ends the legal existence of the business by informing a few key government agencies and local units and submitting all required documentation (and paying all applicable fees). In the Philippines, closing a business is a lengthy and laborious process. The requirements and processes differ depending on the type of company, city, and government agency. Before you begin, keep in mind that the actual process may differ depending on the type of business classification you have.

- In the case of a sole proprietorship:

- For corporations and partnerships:

Steps for BIR Business Closure/Cancellation of TIN

"Taxpayers who filed for cancellation of registration due to closure/cessation of business or termination of business shall be subjected to an immediate investigation by the BIR office concerned to determine the taxpayer's liabilities," according to the BIR.

A. Venue

B. BIR Form

C. Documentary Requirements

D. Procedures

How long does it take to close a business?

In the Philippines, the entire process can take anywhere from a few months to a year or even longer, depending on the circumstances.

If you have any outstanding issues (for example, missed BIR filings), expect it to take longer because the government must review and resolve them all before your business can be officially recognized as non-operational.

Penalties for failing to close a business include:

- Criminal and civil penalties (tax audit issues)

- Compromise penalties stemming from open cases

- Fees and other penalties from the LGU

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Disclaimer: This article or blog is only for general knowledge and guidance and is not a substitute for an expert opinion. For technical advice, please consult your tax / legal advisor for your specific business concerns. For comments, suggestions, and feedback, feel free to email us at

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Written by: Clarice Francesca Mae Lim, 2023, PUP Manila

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