How the New BIR Circular Eases Business Closure for MSMEs
Revenue Memorandum Circular No. 47-2026 removes mandatory tax audits and cuts red tape for closing a business in the Philippines.
The Bureau of Internal Revenue (BIR) rolls out RMC No. 47-2026 to make shutting down a business as easy as starting one.
It issued Revenue Memorandum Circular (RMC) No. 47-2026 on May 19, 2026, prescribing new guidelines to simplify the process for closing businesses and cancelling tax registration.
It is part of the implementation of Republic Act No. 11976, known as the “Ease of Paying Taxes Act.”
“This is our ‘Ease of Closing Business’ reform,” Commissioner Charlito Martin R. Mendoza said in a May 19 press statement.
“If we make it easier to start and operate a business, then the government must also make it easier to properly close BIR registration once operations have already ceased,” he said.
Under RMC No. 47-2026, taxpayers who have already ceased operations may apply for the closure or cancellation of their registration, either manually or electronically, through the Revenue District Office where their head office or branch is registered.
Together with the application form and the surrender of original BIR registration documents and permits previously issued to the business, taxpayers will be required to submit two other document sets for closure:
- the list of ending inventory of goods and supplies, including capital goods for VAT-registered taxpayers, and
- the unused invoices, supplementary documents, and other unutilized accounting forms, together with their inventory.
How RMC 47-2026 Stops Penalties and Fast-Tracks Tax Clearance
Penalties for non-filing of tax returns shall no longer accrue once the taxpayer submits the complete documentary requirements for the closure or cancellation of registration. The taxpayer’s registered form types shall also be placed under “deregistered” status upon submission of the complete requirements.
This does not preclude the Bureau from conducting an audit to determine any outstanding tax liabilities.
Micro taxpayers (or any individual or business entity whose annual gross sales are less than P3,000,000) shall not be subject to mandatory audit for closure and/or cancellation of business registration. Hence, tax clearances will be issued within three working days from submission of complete documentary requirements for those with no open cases or outstanding liabilities.
For micro taxpayers with open cases, tax clearance will be issued within three working days from the submission of the complete documentary requirements and the payment of outstanding liabilities.
Frequently Asked Questions
BIR RMC 47-2026 is a Revenue Memorandum Circular issued on May 19, 2026, that simplifies the process for closing a business and cancelling BIR tax registration. It is part of the implementation of Republic Act No. 11976, the Ease of Paying Taxes Act, reducing documentary requirements and removing mandatory audits for micro taxpayers.
Micro taxpayers with no open cases or outstanding liabilities can receive tax clearance within three working days from submission of complete documentary requirements. Those with open cases receive clearance within three working days after submitting the requirements and settling all outstanding liabilities and penalties.
Under RMC 47-2026, taxpayers must submit an application form, surrender original BIR registration documents and permits, and provide two additional document sets: a list of ending inventory of goods, supplies, and capital goods for VAT-registered taxpayers, and unused invoices, supplementary documents, and non-utilized accounting forms with their inventory.
Yes. Under RMC 47-2026, penalties for non-filing of tax returns will no longer accrue once the taxpayer submits complete documentary requirements for closure. The taxpayer’s registered form types are also placed under “deregistered” status upon submission, preventing further accumulation of open cases.
Yes, micro taxpayers are not subject to mandatory audit when closing their business under RMC 47-2026. However, filing for closure does not prevent the BIR from conducting an audit to determine any outstanding tax liabilities, should the Bureau choose to do so.
