Closing a business is a significant step, and for business owners in the Philippines, it involves several crucial steps, including officially notifying the Bureau of Internal Revenue (BIR). This article provides a thorough explanation of what a Sample Letter of Closure of Business to BIR entails, why it's important, and offers various examples tailored to different scenarios. Understanding this process ensures compliance and avoids future complications.
Understanding the Sample Letter of Closure of Business to BIR
A Sample Letter of Closure of Business to BIR is a formal document submitted to the tax authority to inform them that your business operations have ceased. This letter serves as official notification and is a mandatory requirement for deregistering your business with the BIR. It is crucial for ensuring that you are no longer liable for future tax obligations and penalties. Failure to submit this letter can lead to continued tax assessments and potential legal issues.
The contents of the letter are generally standardized but can be adapted to specific circumstances. Key information typically includes:
- Business Name
- Tax Identification Number (TIN)
- Registered Address
- Date of Closure
- Reason for Closure
- List of Books of Accounts and other relevant documents to be surrendered
The submission process also involves surrendering your BIR Certificate of Registration (COR) and any unused official receipts or invoices. To ensure you are covering all bases, consider these common requirements:
- Filing of final tax returns.
- Settling all outstanding tax liabilities.
- Surrendering of all BIR-issued documents.
Here's a quick overview of what to expect:
| Requirement | Details |
|---|---|
| Letter of Intent | Formal notification to BIR. |
| Surrender of COR | Original Certificate of Registration. |
| Books of Accounts | Both manual and computerized. |
Sample Letter of Closure of Business to BIR Due to Retirement
Dear Sir/Madam,
Please accept this letter as formal notification of the permanent closure of my business, [Business Name], with Tax Identification Number (TIN) [Your TIN]. Our registered address is [Your Registered Address].
The effective date of closure is [Date of Closure]. This decision has been made due to my retirement from active business operations.
I will surrender my Certificate of Registration (COR) and all unused official receipts and invoices to your office on or before [Date of Surrender]. I will also ensure that all outstanding tax obligations have been settled prior to this closure.
Thank you for your understanding and assistance.
Sincerely,
[Your Full Name]
[Your Contact Number]
Sample Letter of Closure of Business to BIR Due to Cessation of Operations
Dear Sir/Madam,
This letter serves as official notice of the closure of our business, [Business Name], TIN [Your TIN], located at [Your Registered Address]. The business will cease operations permanently effective [Date of Closure].
The cessation of operations is due to [briefly state reason, e.g., financial difficulties, market changes, etc.]. We have completed all necessary steps to settle our tax liabilities up to the effective date of closure.
We will proceed with the surrender of our Certificate of Registration (COR) and all books of accounts and unused accountable forms to your office as required. We will ensure all relevant BIR forms for closure are duly filed.
We appreciate your support throughout our business operations.
Sincerely,
[Your Full Name/Authorized Representative]
[Your Position]
Sample Letter of Closure of Business to BIR Due to Transfer of Ownership
Dear Sir/Madam,
We are writing to inform you of the closure of [Previous Business Name], TIN [Your TIN], with its registered office at [Your Registered Address]. The closure is effective [Date of Closure].
This closure is a result of the transfer of ownership of the business. A new entity, [New Business Name], will be taking over the operations.
We have settled all tax obligations of [Previous Business Name] up to the date of transfer and will surrender the corresponding Certificate of Registration (COR) and all other pertinent BIR documents as per BIR regulations.
We request your guidance on any further procedures required for the deregistration of [Previous Business Name].
Sincerely,
[Your Full Name/Former Owner]
Sample Letter of Closure of Business to BIR Due to Merger
Dear Sir/Madam,
Please consider this as our formal notification regarding the closure of [Business Name], TIN [Your TIN], located at [Your Registered Address]. The effective date of closure is [Date of Closure].
This closure is necessitated by the merger of our business with [Merging Business Name]. All assets and liabilities, including tax obligations, have been transferred to the merged entity.
We are committed to fulfilling all requirements for deregistration, including the surrender of our Certificate of Registration (COR) and all unused accountable forms. We have filed our final tax returns for [Business Name] as of the closure date.
We look forward to your prompt processing of our closure request.
Sincerely,
[Your Full Name/Authorized Representative]
Sample Letter of Closure of Business to BIR Due to Dissolution
Dear Sir/Madam,
This letter is to formally notify the Bureau of Internal Revenue of the dissolution and closure of [Business Name], TIN [Your TIN], situated at [Your Registered Address]. The business operations have ceased as of [Date of Closure].
The dissolution was approved by [mention relevant body, e.g., shareholders, partners] on [Date of Approval]. All outstanding debts and liabilities of the business have been settled.
We will submit our Certificate of Registration (COR), all books of accounts, and unused official receipts/invoices for surrender and cancellation. We have also filed our final income tax return as of the date of dissolution.
We kindly request the necessary steps for the final deregistration of our business.
Sincerely,
[Your Full Name/Liquidator]
Sample Letter of Closure of Business to BIR Due to Non-operation
Dear Sir/Madam,
This notice is to officially inform the Bureau of Internal Revenue of the permanent closure and deregistration of [Business Name], TIN [Your TIN], located at [Your Registered Address]. The business has been inactive and will cease all operations effective [Date of Closure].
Despite efforts, the business has been non-operational for [duration] and we have decided to formally close it down. We confirm that no business transactions have occurred during this period of inactivity, and there are no outstanding tax liabilities as of the effective closure date.
We will surrender our Certificate of Registration (COR) and all related documents as per BIR requirements. Please advise on the specific procedure for surrendering unused accountable forms.
Thank you for your assistance.
Sincerely,
[Your Full Name]
Sample Letter of Closure of Business to BIR Due to Relocation Abroad
Dear Sir/Madam,
This letter serves as official notification of the closure of [Business Name], TIN [Your TIN], with its registered office at [Your Registered Address]. The effective date of closure is [Date of Closure].
The reason for this closure is my relocation abroad, making it impractical to continue business operations in the Philippines. I have settled all my tax obligations up to the date of closure.
I will be surrendering my Certificate of Registration (COR) and all other relevant BIR documents to your office. I kindly request information on any specific requirements for individuals relocating permanently abroad to ensure full compliance.
Thank you for your understanding and cooperation.
Sincerely,
[Your Full Name]
Sample Letter of Closure of Business to BIR Due to Expiration of Business Permit (Local)
Dear Sir/Madam,
We are writing to inform you that our business, [Business Name], TIN [Your TIN], located at [Your Registered Address], will be permanently closed effective [Date of Closure].
This closure is due to the expiration of our Mayor's Permit/Business Permit from the Local Government Unit of [City/Municipality], and we have decided not to renew it. Consequently, we are ceasing all business activities.
We have settled all outstanding tax dues up to the effective date of closure and will proceed with the surrender of our Certificate of Registration (COR) and all unused accountable forms to your office. We are also submitting a copy of the LGU's notice of expiry of business permit.
We seek your guidance on the final steps for deregistration.
Sincerely,
[Your Full Name/Authorized Representative]
In conclusion, understanding and properly executing the process of submitting a Sample Letter of Closure of Business to BIR is paramount for any business owner in the Philippines. It's not just about informing the tax authorities; it's about ensuring a clean break from your tax obligations and avoiding potential future liabilities. By carefully following the guidelines and using the provided examples as a reference, you can navigate this essential step with confidence and compliance.