BIR eases tax registration closure for businesses

The Bureau of Internal Revenue has issued new guidelines that simplify the closure of businesses and cancellation of tax registration, including faster tax clearance processing for qualified micro taxpayers.

The BIR issued Revenue Memorandum Circular No. 47-2026 on May 19, 2026, prescribing streamlined procedures under Republic Act No. 11976, or the Ease of Paying Taxes Act.

“This is our ‘Ease of Closing Business’ reform,” Commissioner Charlito Martin R. 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 D. 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.”

“From improving the ease of doing business and the ease of paying taxes, this reform completes the BIR’s 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,” he added.

Under RMC No. 47-2026, taxpayers that have ceased operations may apply for closure or cancellation of registration either manually or electronically through the Revenue District Office where their head office or branch is registered.

The circular standardizes the documentary requirements for closure applications.

Taxpayers must submit the application form, surrender original BIR registration documents and permits previously issued to the business, and provide two other document sets.

These are the list of ending inventory of goods and supplies, including capital goods for value-added tax-registered taxpayers, and unused invoices, supplementary documents, and other unutilized accounting forms, together with their inventory.

The BIR said penalties for non-filing of tax returns will no longer accrue once a taxpayer submits the complete documentary requirements for closure or cancellation of registration.

To prevent the further accumulation of open cases, the taxpayer’s registered form types will also be placed under “deregistered” status upon submission of complete requirements.

The filing of an application, however, will not prevent the BIR from conducting an audit to determine any outstanding tax liabilities.

Micro taxpayers will not be subject to mandatory audit for closure or cancellation of business registration.

For micro taxpayers with no open cases or outstanding liabilities, tax clearances will be issued within three working days from submission of complete documentary requirements.

For micro taxpayers with open cases, tax clearance will be issued within three working days from submission of complete documentary requirements and payment of outstanding liabilities, including penalties.

The Ease of Paying Taxes Act, signed as Republic Act No. 11976, directs the BIR to streamline tax processes, reduce documentary requirements, expand digital services, and prioritize micro and small taxpayers in compliance reforms.

Mendoza encouraged taxpayers that have stopped operations to use the streamlined process to avoid continued penalties and properly update their registration records with the bureau.