# Close your business properly > The step people skip when freelancing ends, which is why open cases keep accruing on a business that stopped years ago. The rules changed in May 2026, and they changed in your favour. Source: https://taxkaya.com/processes/close-business Last checked: 2026-08-06 TAXKAYA is independent software, not affiliated with the Bureau of Internal Revenue. This document is general information, not tax advice. ## Say this at the counter - **Checklist of Documentary Requirements** F1105C - **Quality form number** QF11-14.2025.00 - **Revision** Revised July 2025 - **Citizen's Charter classification** Simple - **RA 11032 legal maximum** 3 working days, extendable once, excluding any audit ## What they may ask you for - **BIR Form 1905, two originals** - **List of ending inventory of goods, supplies and capital goods, one original** VAT-registered taxpayers. Compute the output VAT on what is left before you file. - **Inventory of unused invoices, with the invoices themselves** Along with every other unused accounting form: vouchers, debit and credit memos, delivery receipts, purchase orders. They are counted and submitted. Since RMC 47-2026 they are no longer destroyed in front of a BIR officer. - **Original BIR notices and permits, plus the original Certificate of Registration** ATP, Notice to Issue Receipt or Invoice, POS accreditations and permits to use. - **30 pesos of loose DST** Affixed to the Tax Clearance Certificate issued on closure. - **A notarised authority, if someone else is filing for you** A special power of attorney for an individual. For a deceased proprietor, the death certificate and succession documents instead. ## Do not leave without - Your stamped copy of Form 1905, showing the date of complete submission - A Tax Clearance Certificate, once open cases and liabilities are settled ## Pick your route ### At the RDO where your head office is registered - **Best for** Everyone. The physical items still have to change hands in person. - **Official processing time** 3 working days for a micro taxpayer with complete documents and nothing outstanding - **Official fee** PHP 30.00 1. Fix your closure date, and check every registered tax type before you go. Open cases, missing returns, unpaid balances. Finding them yourself is cheaper than being told. 2. File every final and short-period return up to the closure date. Including zero or no-operation returns for any stretch where nothing happened. A gap in the sequence is an open case whether or not there was income in it. 3. File Form 1905 with your inventories, and hand over the COR and permits. The application itself can go in electronically, by RDO email, through the TRRA Portal or through ORUS. The physical items still have to be delivered in person either way. 4. Get stamped proof of complete submission before you leave. This date is the one that matters. It starts the clearance clock and it is what stops new penalties accruing. 5. Settle whatever is assessed, then collect the Tax Clearance. If liabilities exist, the three-day clock restarts once they are paid. Pre-existing liabilities still have to be paid; the reform stops the meter, it does not erase what was already owed. Caveat: If a Letter of Authority is already open, or the closure triggers one, the audit has to finish before clearance issues, and an audit has no fixed clock. RMC 47-2026 is linked below in the BIR's own copy, though that copy is a scan rather than searchable text, so the specifics here are stated as several law and accounting firms read them. ## What bites beginners - Since RMC 47-2026, penalties stop accruing once your complete closure documents are in. Registration is cancelled on the mere filing of the update application, so the old trap of penalties compounding for the entire months-long pendency of a closure is gone. Anything you already owed before that date still stands. - If your gross sales last year were 3,000,000 pesos or less, or your gross assets at retirement are 8,000,000 pesos or less, you are a micro taxpayer and exempt from the mandatory pre-closure audit, unless you are already under an open Letter of Authority. Most freelancers are comfortably inside this. - Registration does not lapse from inactivity. Until you file this, the filing obligations on your 2303 keep running and keep generating open cases. - Surrender the original COR. A closure where you keep the certificate is not a closure. - If you are only pausing, closing is the wrong move. Keep filing zero returns instead. - Leaving it unfiled follows you. Unresolved obligations surface later in tax clearance requests, bidding eligibility, visa paperwork, loan applications and any attempt to register again. ## Sources - [BIR Checklist of Documentary Requirements, revised July 2025](https://bir-cdn.bir.gov.ph/BIR/pdf/CDR%20-%202025%20(1).pdf) - [BIR Citizen's Charter, 2025 Edition](https://bir-cdn.bir.gov.ph/BIR/pdf/BIR%20Citizen's%20Charter%20(2025-Edition).pdf) - [Republic Act 11032, full text](https://lawphil.net/statutes/repacts/ra2018/ra_11032_2018.html) - [RMC No. 47-2026, issued 19 May 2026 (BIR, scanned PDF)](https://bir-cdn.bir.gov.ph/BIR/pdf/RMC%20No.%2047-2026.pdf) - [Grant Thornton Philippines, RMC 47-2026 compared with RMC 57-2020](https://www.grantthornton.com.ph/insights/articles-and-updates1/lets-talk-tax/easing-the-exit-how-rmc-47-2026-transforms-the-old-rules-under-rmc-57-2020/) - [Cruz Marcelo & Angangco, on RMC 47-2026](https://cruzmarcelo.com/bir-streamlines-business-closure-and-cancellation-procedures-under-revenue-memorandum-circular-no-47-2026/) - [Quisumbing Torres, BIR simplifies closure and cancellation procedures](https://www.quisumbingtorres.com/en/alerts/2026/06/bir-simplifies-closure-and-cancellation-procedures) ## The forms behind this - [BIR Form 1905: Registration updates and closure](https://taxkaya.com/d/forms/1905.md) - [BIR Form 2303: Certificate of Registration](https://taxkaya.com/d/forms/2303.md) ## Before you decide - [One Person Corporation, or stay a sole proprietor](https://taxkaya.com/d/guides/one-person-corporation-vs-sole-proprietorship.md)