Tax Clearance in 2025 | How to Apply?

Getting a tax clearance is an important procedure in the Philippines for both individuals and companies. A tax clearance is often necessary whether you want to apply for a government permit, renew your company permit, or take part in a public bidding process. 

This blog provides a detailed overview of what tax clearance is, why it is important, and how to obtain one.

tax clearance

What is Tax Clearance?

A tax clearance in the Philippines is an official document that certifies the tax compliance status of an individual or company and is provided by the Bureau of Internal Revenue (BIR). This document is frequently needed for several purposes, such as: 

  • Business Registrations and Renewals: Businesses need a tax clearance to renew or register their licenses.
  • Loan Applications: Banks and other financial institutions may require a tax clearance to process loan applications.
  • Government Contracts: Companies applying for government contracts may need a tax clearance to show their tax compliance.
  • Property Transactions: Tax clearance is necessary when transferring ownership of real estate properties.
  • Business Closure: When closing a business, a tax clearance ensures all tax obligations have been fulfilled.

Types of Tax Clearances

  1. Tax Clearance for Bidding Purposes: Required for organizations applying on government contracts, ensuring they have no overdue taxes.
  2. Tax Clearance for Government Transactions: Needed for various dealings with government agencies, such as securing permits or licenses.
  3. Tax Clearance for Property Transfer: Essential for the transfer of ownership of real estate properties.
  4. Tax Clearance for Business Registration: Necessary for registering new businesses or renewing existing ones.

Requirements for Tax Clearance

The general requirements for tax clearance in the philippines are:

  • Tax Identification Number (TIN): Issued by the Bureau of Internal Revenue (BIR).
  • Valid Identification: Government-issued ID such as a passport, driver’s license, or SSS ID for individuals.
  • Completed Application Form: Relevant BIR forms must be filled out accurately. These forms can include:
  • BIR Form 1901: For individual taxpayers.
  • BIR Form 1903: For corporations and partnerships.
  • BIR Form 1701: For self-employed individuals and professionals.
  • BIR Form 1702: For corporations and partnerships.

Proof of Payment: Official receipts or certificates of tax payments, showing that all taxes have been settled. This includes income tax, VAT, and other relevant taxes.

Income Tax Return (ITR): The latest Income Tax Return for the past three years, demonstrating that all income and taxes have been properly reported.

Clearance Form: A specific form related to the purpose of the tax clearance, such as those needed for government contracts, property transactions, or loan applications.

For businesses tax clearance a tax identification number (TIN), Certificate of Registration, Latest Income Tax Return (ITR), Proof of tax payments for the past three years, and Business permits or licenses.

Tax Clearance Online Process in the Philippines

Visit the BIR eServices Portal

Visit the eServices section of the BIR website, specifically the “Tax Clearance Application” portal.

Create or Log In to Your BIR eServices Account

  • If you don’t already have an account, you must register for an account using your TIN id and other necessary information 
  • Enter your login information to access your account if you already have one.

Complete the Online Application Form

Fill out the online application form for tax clearance. Provide all required details, such as:

  • Personal or business information
  • Purpose of the tax clearance (e.g., business registration, government contracts)
  • Relevant tax returns and payment records

Upload Required Documents

  • Prepare and submit all required documents in accordance with the previously mentioned requirements.
  • Make ensure the writing in the documents is readable and clear.

Submit the Application

Submit the application online through the portal.

Payment of Fees (if applicable)

Payment of fees may be necessary for some applications. To make an online payment for any relevant fees, follow the instructions given online.

Processing and Tracking

  • After submission, you will receive a reference number. Use this number to check the status of your application.
  • Processing times may vary, so check regularly for updates.

Receive the Tax Clearance

Once processed and approved, you will receive the tax clearance certificate online. Also, you can download and print the certificate for your records. If there are any problems or delays, contact the local BIR office or the BIR helpline for assistance.

Tax Clearance Fee and Processing Time

The fee for tax clearance is P100. pay the fee via eFPS and also attach the confirmation receipt. After paying the fees you have to submit the following documents to the regional office of BIR:

  • Tax clearance letter of request
  • eFPS payment confirmation receipt
  • BIR form 0605
  • No tax liability certificate

Tax Clearance Renewal and Validity

Tax clearances normally have a one-year validity term from the date of issuance, although this might vary based on the clearance’s purpose. Make sure to renew your tax clearance before it expires for going on needs like renewing the organization permits or submitting applications for government contracts.

FAQs

In order to get a Tax Clearance Certificate in the Philippines, you have to gather the required documentation, which includes tax returns, proof of payment, and a valid ID. Fill out the application and pay the necessary payments. 

Usually, processing takes three to five business days. After processing, you have the option to pick up the certificate in person at the BIR office or download it online.

You can obtain a Tax Clearance Certificate from the Bureau of Internal Revenue (BIR) in the Philippines. You have two main options:

  • Online: Through the BIR eTax System or other online platforms provided by the BIR.
  • In-Person: At your local BIR Revenue District Office (RDO) or any selected BIR office.

Conclusion 

In many different kinds of legal and business-related actions in the Philippines, obtaining a tax clearance is an essential first step. Knowing the process and preparing the required documentation will help you ensure a perfect application process. Complying with your tax liabilities and getting a tax clearance can help both people and companies to fulfill legal requirements and attain their objectives.

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