Two weeks after registering, Miguel got a letter from the BIR, and a ₱5,000 penalty.
He wasn’t earning yet. He thought he didn’t have to file anything. But that’s not how the BIR works. The rules don’t care if you’ve made your first sale or not. If your papers are approved, the clock starts ticking.
That’s how most founders get penalized.
They think they’re safe because their business is still new. But the BIR doesn’t wait for you to be ready.
The Rule Nobody Warns You About
There’s a small detail every new founder misses, you only have 30 days after registration to process your books, receipts, and tax certificates. If you miss that window, the penalties will start to stack up.
And it doesn’t stop there.
- You also have to file your percentage or VAT returns every month or quarter.
- You must renew your registration every January.
- Even if you earned nothing, you still have to file a zero return.
These aren’t reminders anyone sends you. You’re just expected to know.
Miguel didn’t. And neither do most first-time business owners.
Why People Keep Getting Fined
It’s because the system is confusing.
You walk into a BIR office, they hand you papers, and half the time, no one explains what happens next. You leave thinking you’re done, but actually, you’ve just started.
Then the letters start arriving:
₱1,000 for a missed form. 25% surcharge on unpaid taxes. Interest on top of that.
One month of missed filling turns into a full-blown penalty spiral.
That’s how a simple “I didn’t know” costs ₱20,000.
How To Stay One Step Ahead
You don’t need to memorize every rule, you just need a system.
Here’s a quick checklist to keep you out of trouble:
- Mark your calendar right after registration. Your first 30 days matter most.
- Ask your accountant or BIR officer what your filing schedule is. Write it down.
- File even if you earned zero. The BIR just wants to see activity.
That’s it. Just doing these three things keeps you from paying for mistakes you didn’t even mean to make.
The Truth About Penalties
Penalties don’t exist because you did something wrong.
They exist because the system assumes you won’t follow up. The founders who stayed away from penalties are the ones who learn early. They set reminders, they file on time, and they treat compliance as part of the business.
If you want to avoid the same costly lessons, we made something that can help.
It’s a free 5-day email course called Business Registration Blueprint.
It shows you the five biggest mistakes new founders make when registering a business in the Philippines, and how to avoid every single one.
Join the free course here and stop paying for things you didn’t even know you missed.
