If you’ve stopped freelancing and didn’t formally close your Bureau of Internal Revenue (BIR) registration, this matters. Why? Because even if you’re no longer earning, leaving your registration open can trigger penalties and legal risks. This blog explains how much you might owe and how to handle it professionally.
What is “Stopped Freelancing but Didn’t Close BIR Registration”
This phrase means you ceased offering freelance services, yet you did not notify the BIR (or filed required forms) to cancel or update your registration (Certificate of Registration / COR) as a self-employed or sole-proprietor taxpayer. In other words: you remain officially registered despite no longer operating.
Why it’s important for freelancers
For freelancers in the Philippines:
You may still be liable for tax filings or returns, even if your income was zero.
The BIR views non-registration or delayed registration/closure as a violation.
Penalties, surcharges, interest can apply—even if you stopped earning.
Keeping your registration clean protects your credibility, avoids legal issues, and helps when you restart freelancing or apply for loans.
How the penalty works for not closing your BIR registration
Here’s what freelancers should know about the penalty process:
- 1. Non-registration or late registration: If you never registered, or you continued operating but didn’t register, the BIR compromise penalty can start around ₱5,000 up to ₱20,000 for non-registration.
- 2. Late registration or late business registration: For businesses (including self-employed) the penalty can range from ₱1,000 to ₱50,000 depending on circumstances.
- 3. Tax returns not filed / taxes not paid during the period you were registered: On top of registration penalties, you face:
A surcharge of 25% (in ordinary cases) of the tax due.
Interest of ~12% (or more) per annum on unpaid taxes.
A compromise penalty (for each return) ranging from ₱1,000 up to ₱50,000 or more depending on tax amount.
- 4. Operating while unregistered: Even if you earned income, issued invoices or received payments and did not register or close registration, the BIR may assess back taxes, registration penalties, and possibly criminal liability in extreme cases.
Bottom line: If you stopped freelancing but left your registration open (or never properly registered), you could owe: registration-compromise penalty + backlog of tax filings/returns + surcharge + interest. The total could add up steeply—especially if you earned significant income during the unregistered period.
When / Who needs to worry
Who: Freelancers (sole proprietors, independent contractors) in the Philippines who:
started freelancing under their TIN/COR but then ceased operations, or
worked freelance but never registered with the BIR properly, or
registered but never formally “closed” or cancelled their registration when dropping freelance work.
When: As soon as you stop earning (or decide to pause operations) you should act. Notices or assessments by BIR can occur even years later. Also: If you had incomes during registration but didn’t file returns, you’re at risk now.
Tips — Practical steps for freelancers
Check your registration status: Find your COR (Form 2303) and confirm with your Revenue District Office (RDO) whether you have active registration, tax obligations or zero-income filings due.
If you’ve stopped freelancing: File a “cessation of business” or indicate zero operations and request in writing to the BIR that your self-employed business is inactive. Ask them what returns still must be filed.
File all outstanding returns: Even if you had zero income, some returns may still be required. Late filings attract 25% surcharge + interest.
Pay the compromise penalty early: If assessed for late registration or non-registration, paying sooner may reduce extra interest or escalation.
Keep good records: Maintain documents proving you stopped freelancing, gave notice and didn’t earn income afterward—useful if BIR queries you.
Seek professional help: Especially if you had decent income or many periods of un-filing. A tax professional can negotiate or clarify penalties.
When you resume freelancing later: Before starting again, ensure your registration and books are in order—or re-register properly to avoid fresh penalties.
If you’ve “stopped freelancing but didn’t close BIR registration”, this is not just a benign formality. It puts you at risk of significant penalties, surcharges and interest from the BIR. The good news: it’s manageable, especially if you act now—by verifying your registration, filing outstanding returns, and closing or updating status. Your proactive steps can save you money and stress.
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