BIR Streamlines Business Closure Procedures Under RMC No. 47-2026
On May 19, 2026, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 47-2026, prescribing simplified procedures for the closure or cancellation of business registration.
The Circular implements the Ease of Paying Taxes Act (Republic Act No. 11976), particularly Section 5(J) of Revenue Regulations No. 7-2024 and RMC No. 91-2024, and took effect immediately upon issuance.
Coverage of the Circular
RMC No. 47-2026 applies to all BIR-registered business taxpayers, whether domestic or foreign, resident or non-resident, whose businesses have permanently ceased operations or are otherwise subject to closure or cancellation of registration.
The Circular covers the following taxpayers:
Individuals engaged in trade, business, or the practice of profession, including those earning income through digital or online platforms;
Non-individual taxpayers, including corporations, partnerships, joint ventures, associations, and cooperatives;
Estates and trusts, government agencies and instrumentalities, government-owned or controlled corporations, and government financial institutions; and
Micro, small, medium, and large taxpayers.
Filing of Applications for Business Closure
Under Section 3 of RMC No. 47-2026, applications for closure or cancellation of business registration must be filed with the Revenue District Office (RDO) where the taxpayer’s head office or branch office is registered.
The Circular allows taxpayers to submit their applications through any of the following:
By email, using the taxpayer’s BIR-registered email address and sending the application to the official email address of the concerned RDO;
Electronically, through the BIR’s Taxpayer Registration-Related Applications (TRRA) Portal or Online Registration and Update System (ORUS); or
Personally, at the concerned RDO.
However, unused invoices and other accounting forms, as well as original BIR notices and permits, must still be submitted manually to the concerned RDO.
Documentary Requirements
Section 4 of RMC No. 47-2026 limits the documentary requirements for the closure or cancellation of business registration to the following:
Two original copies of duly accomplished BIR Form No. 1905;
For VAT-registered taxpayers, one original copy of the list of ending inventory of goods and supplies, including capital goods;
Unused invoices and other unutilized accounting forms, such as vouchers, debit and credit memoranda, delivery receipts, and purchase orders, together with their corresponding inventory;
Original BIR notices and permits, as applicable, including the Certificate of Registration (BIR Form No. 2303), Authority to Print, Notice to Issue Invoice, Accreditation Certificate and Permit to Use for cash register machines or point-of-sale systems, and Electronic Invoicing System (EIS) Certificate and Permit to Transmit; and
Where the application is filed through an authorized representative, the following additional documents, as applicable:
For individual taxpayers: A notarized Special Power of Attorney specifically authorizing the closure or cancellation of business registration, together with government-issued identification documents of the taxpayer and representative bearing their original specimen signatures.
For non-individual taxpayers: A notarized Board Resolution, Written Resolution for a One Person Corporation, or Secretary’s Certificate, together with the identification documents of the authorized representative and the corporate secretary or appropriate officer.
In case of death of an individual proprietor: The death certificate and documents establishing the authority of the heir, executor, or administrator, such as a Deed of Self-Adjudication or Extrajudicial Settlement with Special Power of Attorney.
Filing of Final Tax Returns and Payment of Taxes
Under Section 5 of the Circular, taxpayers applying for closure or cancellation of business registration must file all applicable final or short-period tax returns covering the beginning of the taxable year up to the date of closure.
The corresponding taxes due must likewise be paid. For periods during which the taxpayer had no business operations or transactions, the taxpayer is required to file zero returns.
Effect of Filing an Application for Closure
One of the significant changes introduced by RMC No. 47-2026 is that the cancellation of business registration takes effect upon the filing and submission of the complete documentary requirements under Section 4.
Upon submission of the complete requirements, penalties for non-filing of tax returns cease to accrue. The taxpayer’s registered tax form types are likewise placed under “deregistered” status to prevent the generation of additional open cases.
Issuance of Tax Clearance
Section 6 of RMC No. 47-2026 provides different procedures for the issuance of tax clearance depending on the taxpayer’s classification, gross sales, gross assets, and audit status.
Micro Taxpayers and Other Qualified Taxpayers
The simplified procedure applies to micro taxpayers, taxpayers with gross sales not exceeding PhP3 million during the immediately preceding year, and taxpayers with gross assets upon retirement not exceeding PhP8 million.
For these taxpayers, tax clearance shall be issued within three working days from the submission of the complete requirements, provided that there are no outstanding open cases or tax liabilities. Where there are outstanding liabilities, the three-working-day period shall be reckoned from the submission of the requirements and payment of the outstanding amounts, including applicable penalties. Upon issuance of the tax clearance, the taxpayer’s business name status shall be updated to “Closed.”
The Circular further provides that micro taxpayers shall not be subject to mandatory audit for purposes of business closure.
For individual taxpayers, the closure process is completed upon updating their business name status to “Closed.” For non-individual taxpayers, the process is completed upon the subsequent cancellation of their Taxpayer Identification Number (TIN).
Taxpayers with Pending Audits or Exceeding the Prescribed Thresholds
For taxpayers with pending audits under existing Letters of Authority, or whose gross sales or gross assets upon retirement exceed the prescribed thresholds of PhP3 million and PhP8 million, respectively, tax clearance shall be issued only upon termination of the audit.
Failure to Apply for Closure or Cancellation
Section 7 of RMC No. 47-2026 provides that taxpayers who permanently cease business operations without submitting the prescribed documentary requirements remain liable for their tax obligations until the closure or cancellation of their registration is completed with the BIR.
These obligations include the filing of applicable tax returns and payment of taxes and penalties.
Accordingly, the cessation of business operations does not, by itself, relieve taxpayers of their tax compliance obligations. Taxpayers that have permanently ceased operations should therefore apply for the closure or cancellation of their business registration with the BIR as soon as practicable. Doing so helps ensure compliance and, upon submission of the complete documentary requirements, prevents additional penalties for non-filing of tax returns from accruing, even where no taxes are due or payable.
If you have any questions or require any additional information, please contact Jemimah Christian R. Solomon and Alexander O. Ner.
This alert is for general information only and is not a substitute for legal advice.
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Alexander O. Ner, JD
Senior Partner
alexner@val.law
Jemimah Christian Solomon
Associate
jemimahsolomon@val.law
