The Bureau of Internal Revenue (BIR) issued new guidelines on Tuesday to simplify the process for closing businesses and cancelling tax registration, allowing some tax clearances to be released in as little as three days.
BIR Commissioner Charlito Martin Mendoza said the new rules, under Revenue Memorandum Circular No. 47-2026, implement Republic Act No. 11976, also known as the “Ease of Paying Taxes Act.”
Taxpayers who have ceased operations can now apply for closure or cancellation either manually or electronically through the Revenue District Office where their head office or branch is registered.
The BIR standardizes and simplifies the documentary requirements under the new circular. Taxpayers should submit an application form, surrender original registration documents and permits and provide two other document sets.
These consist of a list of ending inventory of goods and supplies, including capital goods for VAT-registered taxpayers, and all unused invoices, supplementary documents, and other unutilized accounting forms.
Penalties for non-filing of tax returns will stop accruing once a taxpayer submits the complete documentary requirements. The bureau will also place the registered form types under a “deregistered” status to prevent further open cases. The filing does not prevent the bureau from conducting an audit to determine outstanding tax liabilities.
Micro taxpayers will bypass mandatory audits for closure or registration cancellation. The bureau will issue tax clearances within three working days from the submission of complete documents for micro taxpayers with no open cases or outstanding liabilities. For those with open cases, the bureau will issue the clearance within three working days from document submission and the payment of outstanding liabilities and penalties.
“This is our ‘Ease of Closing Business’ reform,” Mendoza said.
“In line with President Ferdinand R. Marcos Jr.’s directive to make government services faster, better, and more responsive, and Finance Secretary Frederick Go’s push to make tax administration more investor-friendly and business-friendly, the BIR is making it easier for taxpayers who have already ceased operations to properly close their business and cancel their registration,” he said.
Mendoza said the reform completes 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,” Mendoza said.
Mendoza encouraged taxpayers who have ceased operations to use the streamlined process to avoid accumulating penalties and to update their records.
