Unlocking Success: Why Registering with the BIR is Non-Negotiable for New Real Estate Salespersons

“The Practitioner shall secure all necessary licenses, permits and authority as may be required by law, ordinance or rules and regulations.”

– Section 1 (b), Article III, PRBRES Resolution No. 39, Series of 2019

By Realttorney^®

On the third week of January 2024, I will once again be part of a Real Estate Brokerage Seminar for Entry-Level Salespersons, sponsored by PREVAIL, Inc. We are always looking forward to such an event since it signifies that a lot of illegal practitioners (colorum) desire to become legitimate real estate service practitioners (RESPs).

Now, if you are still not registered with the BIR then you must do so to be compliant with the National Internal Revenue Code of 1998, as amended. We also should follow the laws of the Philippines as mandated by the Code of Ethics and Responsibilities promulgated in PRBRES Resolution No. 39, Series of 2019. Hence, BIR registration is a must for all newly accredited real estate salespersons.

I will quickly outline below, the steps to register with BIR as a self-employed individual (professional):

STEP 1: Secure and fill up BIR Form 1901 – Application for Registration for Self-Employed and Mixed Income Individuals, Estates/Trusts.

STEP 2: Submit the same with the following documentary requirements to the RDO having jurisdiction over the place where you hold office – it could be a home office or a commercial office space.

Documentary Requirements:

1. Birth certificate (Original and photocopy);
2. Marriage certificate (Original and photocopy); and
3. Birth certificate of children (Original and photocopy);

Other documents for submission, if requested:

1. Mayor’s Permit (Original and photocopy);
2. Contract of Lease (if renting);
3. Title/Tax Declaration & SPA/Affidavit of Consent if the location is not owned by the applicant (if not renting); and
4. Sketch of location.

STEP 3: Pay the Annual Registration Fee (P500.00) at the Authorized Agent Banks of the concerned RDO.

STEP 4: Pay Documentary Stamp Tax (DST) [loose DST / BIR Form 2000 for DST on Contract of Lease, etc.). Present proofs of payment upon submission of the documentary requirements.

STEP 5: Submit requirements for Authority to Print (ATP) and registration of books of accounts.

Documentary Requirements:

1. Accomplished BIR Form 1906;
2. Job order from the printer;
3. Final and clear sample of receipt and invoices (machine printed);
4. Photocopy of Taxpayer Identification Number Card; and
5. Photocopy of BIR Form 0605 (payment of registration fee).

Book of Accounts:

1. Cash Receipts;
2. Cash Disbursement;
3. Ledger;
4. Journal;
5. Subsidiary Sales Journal; and
6. Subsidiary Purchase Journal [the last 2 are additional books for VAT Taxpayer].

STEP 6: Attend the taxpayer’s initial briefing to be conducted by the RDO concerned for new registrants to apprise them of their rights and duties/responsibilities as taxpayers.

STEP 7: Wait for the RDO to issue the Certificate of Registration (BIR Form 2303) together with the “Ask for Receipt” notice, Authority to Print, and Books of Accounts.

A more comprehensive discussion of the steps enumerated above including the related revenue issuances promulgated by the BIR and codal references in the National Internal Revenue Code can be found on the BIR website (www.bir.gov.ph).

A final reminder to all new salespersons and brokers reading this article. The tax code states that “all individuals engaged in trade or business shall accomplish and file the application on or before the commencement of business operation or from the day the first (1^st) transaction occurred or within thirty (30) days from the application with the LGU for issuance of Mayor’s Permit/Professional Tax Receipt (PTR), whichever comes earlier.”

I encourage newly accredited salespersons and newly licensed real estate brokers to register with the BIR as soon as possible. To reiterate, the Code of Ethics and Responsibility mandates all RESPs to register with the BIR. Finally, in 2005, Atty. Alexander L. Lacson published his book “12 Little Things Every Filipino Can Do To Help Our Country.”

“PAY YOUR TAXES” is the 10^th Little Thing he listed. I quote some portions of what he wrote in pages 75 – 80, which resonates the same message today as if it was written 19 years ago:

“Of the many duties of a citizen under our Constitution, paying taxes is one of the most crucial. Because taxes are the lifeblood of our government, of our nation.

“It is what we use to buy the basic textbooks for our millions of children in the country, or to build additional classrooms in public schools nationwide…

“Taxes are what we use to buy the most basic of medicines, often generic and cheap, that our Department of Health officials distribute to 34 million Filipinos nationwide who live below the poverty line.

“It is what we use to pay all our government employees nationwide – our soldiers, our policemen, our public school teachers, among many others.

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“Viewed in this light, the taxes that you and I pay are actually not lost or wasted completely. A substantial portion of the taxes we pay is still put to good use. Because there are many public servants – not only a few or some – who still do their jobs properly. There are many of them, these honest and faithful ones, but maybe many of them are just in the rank and file, like you and me.

“But they are there. Among the silent many who hold the center and keep our government from falling apart. They are the ones who keep our public institutions intact through storms and scandals, notwithstanding the misguided ambitions and corruption of some of their leaders.

“It is for this reason that we should continue paying our taxes. The good ones in the government are still good reasons for us to continue paying our taxes properly. The challenge for us is just how to increase the number of these good ones in government.

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“In 2003, P83 Billion was collected from individual income taxes. But 91% of this amount came from salaried workers from the government and private sector, people who have no choice since their income taxes are withheld mandatorily. Only P7 Billion of P83 Billion (or 9%) came from businessmen and professionals like doctors, lawyers, accountants, architects, and dentists, among others.

x     x     x

“Can you imagine if our businessmen and professionals pay more income taxes? Or if our government is able to collect 21% this year instead of the 14.1% last year because we all decided to pay 50% more taxes this year? This means that our government will have more funds to perform its duties and obligations to the public.

x     x     x

“But we have to pay our taxes properly. Because we all live in the same country. Because this government, whether we like it or not, is our government. Its cost is a burden we must all share. The task of building this nation is a task that we all must share. We all must contribute to building this kind of nation we dream of for ourselves. Each one of us has a role in it. Each one of us has a responsibility to it.”

We sincerely hope that all newly accredited real estate salespersons will register themselves at the RDO nearest their place of residence. This is one of the keys to a successful career in the real estate service sector. There are no ifs or buts about this.

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Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.