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Application For Closure of Business

The document outlines the requirements and procedures for closing a business in the Philippines with the Bureau of Internal Revenue (BIR) and the Department of Trade and Industry (DTI). It details that businesses must file BIR Form 1905, provide documentary requirements like books of accounts and board resolutions, and may need to undergo an audit. It also states that sole proprietors must submit a letter and affidavit to the DTI when cancelling their registered business name.

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Norberto Cercado
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1K views3 pages

Application For Closure of Business

The document outlines the requirements and procedures for closing a business in the Philippines with the Bureau of Internal Revenue (BIR) and the Department of Trade and Industry (DTI). It details that businesses must file BIR Form 1905, provide documentary requirements like books of accounts and board resolutions, and may need to undergo an audit. It also states that sole proprietors must submit a letter and affidavit to the DTI when cancelling their registered business name.

Uploaded by

Norberto Cercado
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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APPLICATION FOR CLOSURE OF BUSINESS/CANCELLATION OF TIN

Tax Form
BIR Form 1905 Application for Registration Information Update

Documentary Requirements
1) Letter of request stating reason for termination of business
2) Original Certificate of Registration
3) Books of Accounts
4) Inventory List of Unused Receipts and Invoices
5) Unused Receipts and Invoices for cancellation
6) Board Resolution / Notice of Dissolution (if Corporation / Partnership)

Want to close your business? This section provides information on how to legally exit your
business.

What are the requirements for closure of business or cessation of operations?

Department of Labor and Employment (DOLE)

Service of a written notice to the employees and the DOLE at least one (1) month before
the intended date of closure/cessation

The closure or cessation of business operations is bona fide in character.

Payment to the employees of termination pay amounting to at least one-half (1/2) month
pay for every year of service, or one (1) month pay whichever is higher, per Philippine
Labor Code mandate.

Bureau of Internal Revenue (BIR) Application for Closure of Business/Cancellation of Tax


Identification Number (TIN)
Tax Form
BIR Form 1905 Application for Registration Information Update

Documentary Requirements:

Letter of request stating reason for termination of business

Original Certificate of Registration

Books of Accounts

Inventory List of Unused Receipts and Invoices


Unused Receipts and Invoices for cancellation

Board Resolution/Notice of Dissolution (if Corporation/Partnership)

Additional Requirements in Case of Death of Individual Taxpayer:

Death Certificate

Payment of Estate Tax, if any

Procedures:

1. Taxpayer applicant files BIR Form 1905, together with the attachments at the Revenue
District Office (RDO) where they are registered within ten (10) days from retirement of
business.

2. Taxpayer files short period return for income tax purposes.

3. RDO verifies if taxpayer has open cases reflected in the Integrated Tax System (ITS). If
YES, ask taxpayer to submit required returns and pay the corresponding tax due/s and
penalties if any.

4. RDO verifies if taxpayer has delinquent cases at the Assessment, Collection, and Legal
Divisions of the Region.

5. RDO verifies if taxpayer has delinquent cases at the Collection Enforcement Division,
BIR National Office.

6. RDO requests for Letter of Authority to investigate internal revenue taxes for all un-
audited taxable years prior to cancellation of business.

7. Assigned Case officer conducts investigations for period/s covered in the issued Letter of
Authority.

8. Taxpayer complies with requirements of audit and pays corresponding deficiency taxes
resulting from audit using Form 0605.

9. RDO issues tax clearance for closure of business.

10. RDO updates ITS and cancels TIN of taxpayer for non-individual taxpayer.

Department of Trade and Industry (DTI)


Do we still need to inform DTI when we close our business?
Yes, you have to apply for cancellation of your registered business name (BN).

What are the requirements for Voluntary Cancellation (by the Sole Proprietor)?
Letter request signed by the owner

Affidavit of cancellation of the registered BN, stating the reason/s for the cancellation
and that the registered owner has no outstanding financial obligation at the time of
closure of establishment

Original copy of the BN certificate and the duplicate copy of the application form
(affidavit of loss if either the business name certificate and/or the duplicate copy of the
application form was lost)

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