How to close a business with the BIR (Form 1905)
You stopped selling, you went back to a job, or the online shop never took off. Your BIR registration stays open until you close it, and an open registration keeps asking for returns. This guide covers the closure filing, what to bring, the open-cases check, and what happens to your TIN.
First: what "closing" means
Closing means filing BIR Form 1905 at your Revenue District Office (RDO) to de-register the business. On the form, a sole proprietor ticks "Closure of Business" in item 6, then item 8 (Closure of Business/Cancellation of Registration) and "Permanent closure of business (head office) of an individual", with the effectivity date (BIR Form 1905, October 2025).
The BIR's circular says transfers and closures may be done "by mere filing/submission of application (using BIR Form No. 1905), together with complete documentary requirements" (RMC 91-2024).
Your TIN stays
Closing the business is not closing your TIN. On the 1905, TIN cancellation (item 8A) is for death, a multiple or identical TIN, closing a branch, or closing a non-individual business (BIR Form 1905). An individual closing a business uses the separate box, "De-register/cessation of registration of business". You keep the same TIN for any future job or business. Do not apply for a new one: holding more than one TIN is an offense under the Tax Code (NIRC, section 236(j)).
What to bring
BIR's checklist for closure of a head office or branch lists these (BIR checklist of documentary requirements, also printed on the 1905):
1. BIR Form 1905, 2 originals. 2. A list of ending inventory of goods, supplies and capital goods, 1 original. 3. An inventory of your unused invoices and supplementary invoices, with the unused invoices themselves and all other unused accounting forms (vouchers, debit and credit memos, delivery receipts, purchase orders). 4. The originals of your BIR notices and permits (such as ATP, and permits for cash registers or POS) and your Certificate of Registration (COR). 5. A P30 loose documentary stamp, to be affixed to the Tax Clearance Certificate issued for closure.
If someone files for you: a notarized Special Power of Attorney and both IDs (an individual), or a board resolution or secretary's certificate (a corporation) (same checklist).
Books of accounts are not on this closure list. But RMC 91-2024 says the BIR may still audit to find your tax liability as of closure, so keep your books and records together (RMC 91-2024). If your RDO asks for them, bring them.
The open-cases check
This is where most closures get stuck. The circular says closure does not stop the BIR from auditing, and that "said tax liability needs to be settled prior to the issuance of tax clearance for business closure" (RMC 91-2024).
In plain words, the BIR will not give the tax clearance while you owe returns or tax. A registered business that was never used can still have unfiled returns, because a registered tax type can keep a filing duty even with zero sales. Before you close:
1. Ask your RDO what returns and payments are still open under your TIN. 2. File the missing returns (zero returns count) and pay what is due. 3. Then file the 1905.
Penalty amounts differ by case, so ask the RDO for the exact figures. Many of the 12 threads we read on r/taxPH (2025 to 2026) are about this step: a shop registered because three platforms required it, no sales since, then "open cases" at closure. A one-time abatement for micro taxpayers exists for some old accounts; see RMO 19-2026 and ask the RDO if you qualify.
Step by step
1. Settle open cases at your RDO. 2. Fill BIR Form 1905. Part I: your TIN, RDO code, contact number and name. Part II item 6: tick "Closure of Business". Item 8B: tick permanent closure of business (head office) of an individual, write the trade name and the effectivity date. Sign item 12. 3. Gather the documents above and file at your RDO. 4. Receive the Tax Clearance Certificate with your P30 stamp on it.
PDFPhile fills the form; you file it at the RDO. Closing your mayor's permit and DTI business name is separate; ask each office.
Mistakes in the community threads
- Closing before settling. Filing the 1905 does not erase unfiled returns. - Giving only the list of unused invoices. The checklist asks for the invoices themselves with the inventory. - Treating TIN cancellation as closure. You do not cancel your TIN to close a business. A TIN that gets de-registered by mistake is a separate problem to raise with your RDO. - Throwing away your records. An audit can follow closure. - Wrong effectivity date. Put the date you really stopped.
Questions
Do I lose my TIN when I close my business?
No. Closure de-registers the business. You keep your TIN, and TIN cancellation is only for the cases listed on the 1905 (BIR Form 1905).
Magkano ang bayad sa pagsasara ng negosyo?
The checklist lists only a P30 documentary stamp, for the Tax Clearance Certificate (BIR checklist). Any tax or penalty due on open cases is separate.
Can I close online?
BIR has online registration channels such as ORUS and the TRRA portal (RMC 91-2024). Whether your closure can go through them depends on your RDO, so ask first.
I never made a single sale. Do I still have open cases?
Possibly. Registered tax types can carry returns even with no sales. Ask your RDO what is open under your TIN.
Last checked 2026-10-12. Not affiliated with BIR, SSS, PhilHealth, Pag-IBIG or any government agency.