The Bureau of Internal Revenue (BIR) has issued Revenue Memorandum Circular (RMC) No. 47-2026 on May 19, 2026, establishing new guidelines to simplify the process of closing a business and canceling tax registration. This initiative is part of the implementation of Republic Act No. 11976, also known as the Ease of Paying Taxes Act.
Reform Aligns with Government Directives
According to BIR Commissioner Charlito Martin R. Mendoza, this reform aligns with the directive of President Ferdinand R. Marcos Jr. to make government services faster and more efficient. It also responds to the call of Finance Secretary Frederick D. Go to make tax administration more investor-friendly and business-friendly.
Simplified Application Process
Under the new guidelines, businesses that have ceased operations can submit an application for closure or cancellation of registration either manually or electronically to the Revenue District Office where they are registered. The documentary requirements have been streamlined and standardized: aside from the application form and surrender of original BIR registration documents, applicants need to submit only two sets of documents: (1) a list of ending inventory of goods and supplies, including capital goods for VAT-registered taxpayers, and (2) an inventory of unused invoices, supplementary documents, and other accounting forms.
Benefits of the New Process
Once the complete requirements are submitted, penalties for non-filing of tax returns will no longer accrue. The taxpayer's form types will be placed under a deregistered status to prevent the accumulation of open cases. However, the BIR may still conduct an audit to determine if there are any remaining tax liabilities. For micro taxpayers, a mandatory audit for closure or cancellation of registration is no longer required. Tax clearance may be issued within three days from the submission of complete requirements, provided there are no open cases or outstanding liabilities.
Commissioner Mendoza encouraged businesses that have stopped operations to take advantage of the new process to avoid the continuous accrual of penalties and to properly update their tax records with the BIR.
