Voluntary closure generally means the business owner close the business in his or her own will,

usually complying with applicable business regulations.

FORECLOSURE OF SOLE PROPRIETOR BUSINESS:

Usually a business should be closed in the following government agencies/offices.

1. Department of Trade and Industry (DTI) office

2. Barangay, where the business is registered
3. The local City/Municipal Office, where the business is registered
4. Bureau of Internal Revenue (BIR) office

To guide you on the formal cessation of your business, here are some of the basic steps, procedures
and requirements on how to close a business in the Philippines.

1. DTI
• 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)

2. Barangay
• Barangay Clearance, latest (original and copy)
• Letter of Request for Retirement

3. City Hall
• Affidavit of Gross (reason for and date of closure)
• Mayor’s Permit
• Business Plate
• Financial Statement/ ITR
• Sketch
• Latest Payment
• Certificate of Closure from the Barangay Captain indicating date of closure

4. BIR
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
Procedures:
 Taxpayer applicant files BIR Form 1905, together with the attachments at the RDO where
they are registered within ten (10) days from retirement of business.
 Taxpayer files short period return for income tax purposes.
 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.
 RDO verifies if taxpayer has delinquent cases at the Assessment, Collection, and Legal
Divisions of the Region;
 RDO verifies if taxpayer has delinquent cases at the Collection Enforcement Division, BIR
National Office
 RDO requests for Letter of Authority to investigate internal revenue taxes for all un-audited
taxable years prior to cancellation of business.
 Assigned Case officer conducts investigations for period/s covered in the issued Letter of
Authority.
 Taxpayer complies with requirements of audit and pays corresponding deficiency taxes
resulting from audit using Form 0605.
 RDO issues tax clearance for closure of business.
REGISTRATION OF FREELANCERS (SELF-EMPLOYED)

1. CITY HALL
 Occupational Tax Receipt (OTR)
2. BIR
DOCUMENT REQUIREMENTS:
 PSA Birth Certificate
 Community Tax Certificate or Sedula
 BIR Form 1905 (if you already have TIN and are applying for business activity
change)
 BIR Payment Form 0605
 Occupational Tax Receipt
 Form 1906 (ATP Form)

PROCEDURES:

 Fill up all required BIR Forms

 Submit all of the forms and other requirements to the Revenue District Office
(RDO).
 Pay the P500 registration fee, P15 certification fee, and P15 documentary
stamp tax.
 After the briefing, the RDO will issue you a Certificate or Registration (CoR)
with an Ask for Receipt notice, Authority to Print (ATP), and Book of Accounts.
 Be sure to register your books and have them stamped in your RDO.