Tax Clearance Certificate in Philippines | How To Apply?

A tax clearance certificate is an official document that is issued by the Bureau of Internal Revenue. This document is often required when you are applying for a government permit and for a company permit, to run a new business, to apply for a loan, or when you are dealing with some government matters. This document is proof of your tax status, which means this document shows that you have paid all the taxes. 

A tax certificate, issued by the BIR, is often required alongside the national police clearance for employment or permit applications in the Philippines. In this blog, we will discuss the tax clearance requirements, the application procedure for a TCC, and the renewal method.

What is a Tax Clearance Certificate?

The Bureau of Internal Revenue (BIR) issued the tax clearance certificate to confirm that the person is fully compliant with tax rules. This document is used for several purposes, such as:

• Government transactions: A TCC is required to enter into contracts with the government, such as bidding for a project or obtaining permits.
• Loan applications: TCC is essential when applying for a loan because banks and some fund-issuing financial institutions will not approve the loan without it.
• Accreditation and licensing: Some government or private companies require TCC for license approval.
• Business Registrations renewals: TCC is required to register a business or review a license.
• Other transactions: There are some cases where TCC is required, such as for promotion within government service and for buying and selling property.

Tax Clearance Certificate Sample

TCC looks like this sample

Tax Clearance Required Documents

To obtain a TCC, you will need the following documents, and the documents may vary depending on the purpose of your certificate, whether you are obtaining the certificate for an individual or a company.

For Individuals:

Required documents for individuals:

• Application Form: Get the form from the nearest BIR office where you want to obtain the certificate.
• Fill The Form: Enter your complete and accurate information and put the stamp in the right place.
• Identity Proof: Government-issued IDs such as National ID, license, or passport, etc.
• Payment Proof: A tax payment receipt proving that you have paid all taxes.
• Address Proof: Electricity or telephone bill that confirms your address.
• Delinquency Verification Report (DVR): You can obtain the DVR form from the BIR Regional District Office.

For Businesses:

Required documents for Businesses:

• Business Permit: If necessary, a copy of the business permit issued by the local government.
• Audited Financial Statements: A copy of Audited Financial Statements, which proves the transparency of your business.
• Income Tax Returns: Copy of the latest Income Tax Return Form, which will confirm that your dues have been cleared.
• Proof of Settlement of Tax Liabilities: Proof of Settlement of Tax Liabilities, official receipts, Certificate of Final Tax Withheld, and the Withholding Tax Receipt should serve as proof that none of your taxes are due.

Eligibility Criteria for Tax Clearance Certificate

The eligibility criteria for a Certificate in the Philippines is based on your tax paid. This means that you have paid all taxes issued by the BIR. These may include various taxes such as withholding tax, income tax, and any other type of tax, depending on your situation. You should not be charged any surcharges or penalties for late tax filing.

Tax Clearance Certificate Online Process

• Gather required documents: Before obtaining a certificate, it is also necessary to prepare the required documents, including your NBI Clearance if applicable, which may vary depending on whether you have your own business or you need the certificate for another purpose.
• Visit your BIR RDO: To apply for a certificate, visit your nearest BIR District Regional Office..
• Submit application: To obtain the application, hand over your completed form and required documents to the designated staff of the BIR District Regional Office.
• Pay fees: Pay the prescribed fee to obtain stamps and certificates.
• Processing and release: The Bureau of Internal Revenue will process your application and, when it is complete, will send you a message to receive your TCC.

Tax Clearance Certificate Validity

The expiry date of a TCC depends on the purpose of the certificate and the type of business. Usually, this certificate is valid for one year, but some tax certificates have an expiry date of up to six months. There is no expiry date mentioned anywhere on the certificate. Make sure to renew your TCC before it expires, especially when it is required for renewing business permits or applying for government contracts.

Processing Time and Fees

The processing time for Tax Certificate Clearance depends on the method of application, but typically it is three to five days. If all your documents are verified and valid, you will receive your certificate within three to five days. The standard fee for TCC is ₱100, and the documentary stamp attached to the application is ₱30. You can pay fees via eFPS using Form 0605.

FAQs

Conclusion

Getting a tax clearance certificate in the Philippines is important for both individuals and businesses. It has a wide importance when you are applying for business permits and for government transactions. To apply for a TCC, first, you have to know about the requirements and eligibility criteria, and then you have to know about the application process. By following simple steps mentioned above in the article, you can apply for the TCC online through the BIR official web portal.