How to Register an Online Business for BIR Tax Purposes in the Philippines

This is for Filipino online sellers and side hustlers who want to register their online business for BIR taxes with the minimum setup, without turning compliance into a second job.

If you run an online business, there comes a moment when you can’t “diskarte” your way out anymore.

Someone asks:

• “May invoice ka ba?”
  
• “Registered ka ba?”
  
• “What’s your business name?”
  
• “VAT registered kayo?”
  

That’s when online income stops feeling like extra income and starts demanding paperwork.

This guide gives you the minimum setup to stay legit without turning your life into a full-time admin job. 

It fits especially if you juggle side gig taxes while still trying to do your actual job and eight hours of sleep.

Key takeaways

• You don’t need a Facebook permit or TikTok permit to sell online. But you may need LGU compliance depending on your setup and scale.
  
• DTI registers your business name. BIR registers your taxes. LGU permits allow you to operate locally.
  
• If you sell under your real name, you can usually skip DTI at the start. If you transact under a brand name, DTI becomes practical.
  
• Penalties usually follow late filing, late payment, or missed required filings. The bigger pain is the cleanup when you file without clean records.
  
• If VAT applies, you need a workflow you can repeat without panic.

Side gig taxes vs. second job side gig taxes 

Side gig taxes is the umbrella term. It means you earn money outside a regular salary, so you need to handle taxes for that income.

For example, Mara is a full-time freelance graphic designer. She has no employer. All her income comes from clients who pay her via bank transfer or PayPal. 

Since no company withholds taxes from her, she manages everything herself: registration, recordkeeping, and filing.

In her case, side gig taxes means she pays taxes on non-salary income because she earns independently.

Second job side gig taxes is a specific version of side gig taxes. 

It happens when you’re employed, so your employer already withholds tax for your salary. But you still earn on the side and need to manage that part yourself.

Here’s a good example of second job side gigs. 

Bea works full-time in Makati and gets a monthly payslip. Her employer withholds tax from her salary. 

On weekends, she sells skincare products on Shopee and earns commissions from affiliate links. 

Her employer does not handle any tax for those earnings. Bea has to track those sales and payouts, then register and file taxes for that income separately.

In her case, second job side gig taxes means: she runs two tax lanes at the same time. Payroll tax (employer-managed) + side income tax (self-managed).

Takeaways: 

• Side gig taxes: you manage taxes for income outside salary.
  
• Second job side gig taxes: you’re employed, so you manage taxes for your side income while payroll handles your salary taxes.

Do I need a specific permit to sell products through social media platforms?

No. You don’t need a permit to sell on social media platforms like Facebook and TikTok.  

The government doesn’t issue a special platform permit for Shopee, Lazada, Instagram, or Marketplace.

But you still need to follow the usual compliance and business registration rules.

Think about it this way: the platform doesn’t run the business. You do. 

Selling products or services regularly to earn profit is already a business. Even if you sell it through DMs and comments to get orders. 

What people really ask when they ask about permits

When people ask, Do I need a permit? they usually ask two questions at once:

1) Can I get in trouble for selling online?

If you earn consistently, build your paper trail early and register properly. You avoid the rushed, messy version later.

2) Do I need an LGU permit?

If you are selling products (online seller), you will need to register as a sole proprietor or corporation. As a Sole Proprietor or Corporation, YES, you are required to secure a Mayor’s / LGU permit.

When “I’m just selling online” stops sounding believable

If your online activities involve any of these, it’s essential to operate your business as a formal entity.

• You restock weekly, not when you feel like it.
  
• Couriers pick up from your home regularly.
  
• You keep inventory at home.
  
• You ask someone to pack or deliver, even casually.
  
• You join bazaars, pop-ups, or collaborations that require documents.
  
• You negotiate supplier terms or bulk pricing.
  

Approach your business as a commitment, not a trial run.The reality is, your online business is visible and needs to stop being treated as if it weren’t.

Use a minimum setup approach so you avoid overkill

• If you still test sporadic sales, start recordkeeping now so you register cleanly later.
  
• If you sell regularly, start your tax setup now so you don’t rush when a buyer demands for an invoice.
  
• Should your side hustle grow, treat local government unit (LGU) compliance as a planned project, not an unexpected requirement.

Are there penalties for not declaring side income in the Philippines?

Penalties show up when you file late, pay late, or skip required filings. Most people don’t fear the penalty line item. They fear backtracking.

What happens in real life, and why people panic

Most people follow this pattern:

You start earning online. You keep it casual. You skip registration because the income feels small.

Then the income grows quietly. Then someone asks for paperwork. Or you think it’s time to turn this into an actual, legit business. 

Then you realize you can’t even compute your income without digging through screenshots and chat threads.

That’s where things go sideways.

People don’t usually mess up because they plan to avoid tax. People mess up because they don’t build a system while the business still feels simple.

Fix it calmly if you already earned but didn’t declare

Don’t panic-file. Don’t guess your way into a return.

Do this instead:

1. Pull your last 3 to 6 months of proof (payout summaries, transfers, order totals).
   
2. Total your online income per month.
   
3. Separate salary documents (2316) from online business documents.
   
4. Register and file using numbers you can explain.

You keep penalties out of your story when you stop filing from memory.

Quick tool: The “late but not doomed” checklist

Use this ‘yes or no guide’ to check if you need help. 

• I can’t total my monthly online income confidently.
  
• I mix personal and business payments in one account.
  
• I miss months of proof.
  
• I don’t know how to classify my income (products vs. services vs. commissions).
  

If you answer “yes” to any of these, clean up first. Then file.

Read more about why you need to register an online business here. 

Guide to DTI registration requirements for home-based online sellers

People waste time on DTI because they treat it as a business registration. But the truth is, it isn’t.

Quick definition:

• DTI registration: business name registration. It makes your business name official. It does not register you for taxes.
  

Register with DTI when you want to use a trade name. A trade name is the name that will appear consistently in transactions and documents.

When DTI becomes necessary in real life

DTI becomes necessary when you either want to use a trade name or you want to register as a sole proprietorship business. In the case of online sellers, they are all required to register as a sole proprietorship.

Situation 1: A buyer asks, “May invoice under your business name?”

For example, you sell as GlowSkin PH. Your packaging says GlowSkin PH. Your order form says GlowSkin PH.

Then a buyer asks: “Can you invoice under GlowSkin PH?”

When your documents show your personal name while your brand name drives the customer experience, you create friction. 

Small orders survive it. Corporate buyers, reimbursements, and partnerships often don’t.

DTI lets you formalize the name customers already recognize.

Situation 2: Bigger buyers ask, “Why do we pay a personal name?”

At the start, buyers pay your personal GCash and move on.

As orders grow, buyers start asking questions. They want payment details that match the business identity, especially when they need documentation.

DTI helps you align the name customers see with the name on paperwork.

Situation 3: Suppliers, couriers, or fulfillment partners ask for business details

When you negotiate bulk packaging, supplier terms, scheduled pickups, or fulfillment support, partners ask for your registered business details.

DTI gives you a clean answer when you operate under a brand name.

Situation 4: Bazaar and collaboration organizers require documents

Organizers often ask for business details to complete documentation and venue requirements.

When you show up as a brand, you need the name to hold up on paper.

The DTI decision test

You likely need DTI now if:

• Customers know you as a brand name.
  
• You want the brand name on invoices and documents.
  
• You want payments and records to match the brand name.
  
• Suppliers, partners, or events ask for business details.
  

You can usually skip DTI for now if:

• You operate under your real name.
  
• You invoice and receive payments under your real name.
  
• You’re still validating your online business and want minimum admin.
  

Mini asset: The “DTI Yes or No” scorecard

Answer yes or no:

1. Do customers know you primarily by a brand name?
   
2. Do you want that brand name on invoices and documents?
   
3. Do you want payments and accounts to match the brand name?
   
4. Do suppliers or partners ask for business details?
   

If you answered yes to two or more, do DTI. Stop debating it.

Online platforms that assist with computing and filing VAT for small businesses.

Read this section only if you register for VAT or you already file VAT returns.

Quick definition:

• VAT: a tax on sales. If you’re VAT-registered, you usually track output VAT on sales and input VAT on purchases, then file VAT returns on schedule.
  

VAT doesn’t overwhelm people because VAT feels advanced.

VAT overwhelms people because VAT punishes chaos. You need consistent records: sales, purchases, and proper invoicing.

Option 1: BIR eBIRForms 

If you already understand VAT computation and you keep clean records, eBIRForms can work.

But the tool won’t fix your workflow. You still need to:

• track output VAT and input VAT correctly,
  
• keep period records clean,
  
• meet deadlines consistently,
  
• stop saying, “I’ll fix it later.”
  

If your records are messy, eBIRForms will only show you the mess more clearly.

Option 2: Taxumo 

If you want VAT compliance without turning your online business into a recurring stress cycle, use a platform that supports a repeatable workflow. 

For most small businesses, Taxumo fits best.

Taxumo works well in real life because it supports business owners who want to file correctly without living inside spreadsheets.

1) Taxumo reduces VAT math anxiety.
VAT has enough moving parts that manual computation turns into a quarterly panic ritual. Taxumo helps you compute and file with less second-guessing.

2) Taxumo fits non-accountants.
Most online sellers and freelancers don’t hire finance teams early. Taxumo supports owners who need guidance instead of forms-only tools.

3) Taxumo fits the side gig reality.
If you juggle side gig taxes or second job side gig taxes, you need consistency more than complexity. Taxumo helps you build a filing habit instead of treating filing like a crisis.

Quick VAT reality check

If you don’t register for VAT, don’t force VAT complexity into your life just in case.

 If you do register for VAT, treat VAT like a system you maintain, not a storm you dodge.

What to do next 

If you want the minimum legit setup for your online business without drowning in compliance, follow this order:

1. Write your one-sentence business description.
   
2. Create monthly proof folders (income proofs, payout summaries, transfers, key receipts).
   
3. If you’re employed, separate salary records from online business records now.
   
4. Decide how you operate: real name or brand name.
   
   • Brand name: do DTI first.
     
   • Real name: skip DTI for now.
     
5. Register your online business for BIR taxes and set up a filing routine you can repeat.
   
6. If VAT applies, choose a workflow you can sustain.

Want to know what you need to prepare for your new business? Here’s a list you can check

Final Thoughts 

Running an online business gets easier when your paperwork stops chasing you. 

Start with the minimum: clean records, the right name setup, and a filing routine you can actually repeat.

Want a simpler way to stay compliant as your online business grows? Taxumo can help you set up and file without turning taxes into a second job.

Send us a message to get started.