So you want to walk the tightrope and become a freelancer. We don’t blame you; it’s potentially the way to live your best life. Be your own boss, control your own time, and best of all, have the power to say no.
With great power comes great responsibility, though. You’ll also have to be ready to pay your own taxes. In case you haven’t heard, filing taxes suck. But if you’re ready to brave the forms and ledgers, we’d like to help you finish the first step towards freelancehood—getting your Original Receipt (OR).
We did the dirty work of exchanging many, many e-mails with the BIR to make this handy, extra-understandable guide on all things OR. Of course, the actual process might still differ. Ordinances on requirements aren’t the same across all cities. You might need a Tax Receipt in QC for example, but in Makati you won’t. At the very least, this guide will serve as your stepping stone to ask the right questions and get the basics down. Hopefully, once you’re all set and registered, we can work with you in the future (wink, wink).
A few FAQ’s before the process:
First things first: Are you on the right page? Check out our FAQ’s first before diving into the process.
If I am a single person starting a business, do I also register as a freelancer?
Nope. Although freelancers and business owners fall under the Self-Employed category, this guide isn’t for registering a business, which falls under Sole Proprietorship and is a tad more complicated. This will be for freelancers: Individuals who offer their services as business. Writers, photographers, copyeditors, stylists, graphic artists, illustrators, animators, models, scriptwriters, directors, and producers are just some of the jobs that fall under freelancing.
Why would I need an OR?
The Original Receipt is true blue evidence that you’re an official freelancer. Aside from bragging rights, it’ll give you the best power of all—to say yes to corporate gigs. Corporations and companies (us included), will most probably require an official invoice from any contributors that they get, and that can finally be you! Once you register, of course.
If I’m currently employed in a company but I’d like to take on sideline jobs that require an OR, can I still register for one?
If your company allows sideline jobs, you can register as a mixed-income earner. You can then file an Authority to Print form to get your OR.
Do I have to pay any fees?
Yes. There will be an annual P500 fee to get your Certificate of Registration, and after that, you’ll also have to pay for the printing of your ORs which can go up to P1000 for ten booklets. Take note that you should only get your OR printed from BIR accredited printer. See the list here.
Can I just go to any BIR branch to register?
No, you’ll have to register at the BIR RDO assigned to the area of your registered address. You can call the BIR Trunkline or go to the nearest BIR branch to get a verification slip. If you don’t want to deal with the BIR just yet, a quick Google search will show your local RDO.
Questions answered? Now here’s what you need to do:
Step 1: Get your documents ready
It’s best to prepare everything you need so that everything goes smooth sailing at the BIR. Here are all the documents you’ll need:
- Valid government IDs that show your name, address and birthdate (e.g. passport, driver’s license, Community Tax Certificate). Bring at least two to be safe!
- A journal for your Book of Accounts
- Your birth certificate
- Barangay clearance
- Your Occupational Tax Receipt (OTR)
- Optional: A copy of any contract with an existing client, just for safe measure
Prepare at least one photocopy of all your documents; you’ll need it later on when you submit requirements at your local BIR RDO.
Getting a journal
Time to recall your accounting subjects, friends. You’ll be using your journal to keep accounts of your transactions. You can buy a generic journal notebook (Not the diary kind, okay. The one with ledgers.) at any bookstore for less than P30. Your journal will then have to be verified and authorised by the BIR.
Getting your OTR and Barangay Clearance
For the OTR, you can go to your local City Hall and apply for a tax receipt. Now there are two options, the Professional Tax Receipt (PTR) and the Occupational Tax Receipt (OTR). The former is for professionals who have licenses, like engineers or accountants. The latter is for professionals who don’t have licenses, like writers or performers. Assuming you’re the latter, you can go ahead and ask for an OTR at your City Hall’s Treasurer’s Office. Just present a contract you have with an existing client to show that you’re a legit freelancer, pay a fee of around P200 (it varies sometimes) and get your papers.
Tip: If the guard doesn’t know what you’re talking about when you say you’re getting an OTR, try asking where you can get a PTR. It’s more common for licensed professionals to get their PTRs.
Once you’re done with your OTR, you can go ahead and get a Barangay Clearance. This part should be easy since it’s a common procedure. Just get a cedula by signing the necessary forms and affixing your thumbprint, then after that you can proceed to acquiring your barangay clearance with your cedula and a minimum fee. Now that you have your OTR and barangay clearance, you’re good to go.
Step 2: Apply for a Tax Identification Number (TIN) and register as a freelancer
Ready to brave the BIR? Alright. Now that you have your requirements, you can head to your designated RDO. If you were previously employed, you have to transfer your current RDO to where your address is registered in. You’ll have to go to your current RDO designation, file a Form 1905 to transfer, wait three business days and then proceed to your new branch.
If this is your first time applying for a TIN, you can proceed to your proper RDO. Once you get there, talk to the receiving officer about your plans to register as a freelancer. They should guide you on where to get your number.
Forms, forms and forms
You should then be provided with the following forms:
- Form 1901 – This allows you to register for a new TIN or switch your registration from employed to freelancer, if you’ve been previously employed
- Form 0605 – This is the Payment Form, which you’ll be submitting to pay for your annual Certificate of Registration
Fill those out and then get two photocopies of Form 1901 and three copies of Form 0605 made. There are usually photocopy businesses near BIR RDOs. Once you have those, go back to the officer you were transacting with, submit your requirements and follow their instructions.
Pay your dues
You’ll then be asked to pay for your COR. For that, you can head on over to an accredited bank nearby. Just ask the guard where the nearest accredited bank is, bring your Form 0605 copies then pay the P500 fee at the bank teller. You’ll need to leave one copy with the bank. Don’t forget your receipts!
Once you’re done, you can go back to your RDO and hand over your proof of payment. They can then proceed to processing your COR, which might take a few days. You’ll also have to attend the taxpayers’ seminar before you receive your COR, the schedule of which the officer should inform you about. For now, you’re done for the day. Good job on the adulting.
Attend the seminar
Once your taxpayers’ seminar day is here, go back to your RDO and get educated. Sure the one hour lecture might be a bit boring, but you’ll get vital information like when and how to file your taxes. You can also ask all the questions you want, so prep a list if you want to be real thorough. Your college classes should have trained you for this, so take down some notes.
Once you’re done with the seminar, you can claim your COR as soon as it’s done being processed. You’ll have to pay a final fee to the BIR of P15 for the Documentary Stamp Tax (DST) which will be attached to your COR. You should also be provided with Form 1906, which is your Authority to Print (ATP) form. You’re now just a few steps away from being a responsible, OR-wielding freelancer!
Step 3: Have your Official Receipt (OR) printed and registered
Once you’ve decided on your BIR-accredited printer of choice or as recommended by your friendly neighborhood BIR person, head over there with your ATP, the proper documents and a thousand bucks. Here’s everything you need to bring:
- Form 1906 (ATP Form)
- A photocopy of Form 0605, with the bank receipts attached
- A photocopy of your COR
Present all your papers, pay the fee, and now all you have to do is wait for your brand new OR pads. Go get that bread, freelancer!
Art by Kloie Ledesma