January is a busy period for renewal of various licenses including business permits. Business owners need to comply with the legal requirement of renewing their business permit with the Local Government Unit (LGU) concerned to continue business operation.
A penalty is imposed upon the business owners who fail to renew their permits. If filing (and payment) is not completed on or before January 20, there is a 25% surcharge on the unpaid amount plus 2% interest per month.
Failure to renew business permit, may result in ordering the closure of their business by the LGU.
Business owners also need to to file and pay Annual Registration Fee to BIR on or before January 31 to avoid paying compromise penalties of P1,000, 25% surcharge, and 20% interest per annum.
LGU requires the following when renewing business permit:
- New Barangay Clearance/Permit
- Previous Year’s Business Permit
- Financial Statement/ Income Tax Return for the preceding year
- Latest Community Tax Certificate
- Contract of Lease/ Lessor’s Permit
- Comprehensive General Liability Insurance/ Local Insurance
Note that processing of business permit renewal can be tedious and may take more than a few days due to the high number of applicants.