THE Bureau of Internal Revenue (BIR) issued a circular simplifying the process for closing businesses and cancelling tax registration as part of the implementation of the Ease of Paying Taxes Act.
Under Revenue Memorandum Circular 47-2026 issued on Tuesday, May 19, 2026, businesses that stopped operations may apply for the closure or cancellation of their registration, either manually or electronically, through the Revenue District Office where their head office or branch is registered.
“From improving the ease of doing business and the ease of paying taxes, this reform completes the BIR’s support for businesses through every stage of the business life cycle. 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,” BIR Commissioner Charlito Martin Mendoza said.
Those who will apply will only need to submit the application form, surrender the original BIR registration documents and permits previously issued to their business, a list of ending inventory of goods and supplies, including capital goods for value-added tax (VAT)-registered taxpayers and the unused invoices, supplementary documents and other unutilized accounting forms, together with their inventory.
Under the new guidelines, penalties for non-filing of tax returns shall no longer accrue once the taxpayer submits the complete documentary requirements for the closure or cancellation of registration.
To prevent the further accumulation of open cases, the taxpayer’s registered form types shall likewise be placed under “deregistered” status upon submission of the complete requirements.
However, BIR noted that filing an application for the closure or cancellation of registration does not preclude the Bureau from conducting an audit to determine any outstanding tax liabilities.
Micro taxpayers shall not be subject to mandatory audit for closure and or cancellation of business registration.
Micro taxpayers are those whose gross sales for the immediately preceding year do not exceed P3 million or whose gross assets upon retirement do not exceed P8 million.
Tax clearances will be issued within three working days from submission of complete documentary requirements for those with no open cases or outstanding liabilities.
For micro taxpayers with open cases, tax clearance will be issued within three working days from the submission of the complete documentary requirements and the payment of outstanding liabilities, including penalties.
The BIR reminded that taxpayers who cease business operations without submitting the documentary requirements for the closure and or cancellation of their business registration with the BIR shall continue to be liable for all their tax obligations until their cancellation of business registration is completed. / PNA
