So, your business is booming—congrats! Maybe you’re ready to open a new branch in a different city, or you want to expand your reach and get closer to more customers. Before you start scouting for a new location, let’s talk about what happens behind the scenes: branch registration and the tax compaliance. (Yes, we know, it’s not the most exciting topic, but trust us, it’s important!)
Why Register a Branch?
When you open a new branch, you can’t just put up a sign and call it a day. You need to make it official in the eyes of the government. Registering your branch means you’re complying with the law—and avoiding headaches down the road, like penalties or missed business opportunities.
What counts as a branch? A branch is a business location with the same trade name and activities as your head office but in a different address—and it generates income on its own (unlike a warehouse or liaison office).
The Step-by-Step Guide to Branch Registration in the Philippines
1. Secure Barangay Clearance
Start by obtaining a Barangay Business Clearance from the barangay where your branch will operate. This certifies that your business is authorized to conduct operations within the area and is the first requirement before applying for a city or municipal permit.
2. Apply for a Business or Mayor’s Permit
Next, head to the City Hall or Municipal Hall to apply for your Business (Mayor’s) Permit. This step often includes securing several supporting documents such as:
- Zoning or Locational Clearance
- Fire Safety Inspection Certificate
- Sanitary or Health Permit
- Occupancy Permit (if you’re renting or newly constructing the space)
These requirements ensure your branch complies with local safety, health, and zoning regulations. Each city may have additional forms, so check with the local Business Permits and Licensing Office (BPLO).
3. Update Your DTI or SEC Registration
Inform the proper regulatory agency about your new branch:
- For sole proprietorships, update your registration with the Department of Trade and Industry (DTI) by filing for an Additional Business Name or Branch Business Name.
- For corporations or partnerships, notify the Securities and Exchange Commission (SEC) about the new branch. You may also need to update your Articles of Incorporation or reflect the branch in your General Information Sheet (GIS).
4. Register with the Bureau of Internal Revenue (BIR)
Visit the Revenue District Office (RDO) that covers the branch’s location to register it under the correct jurisdiction. The BIR will:
- Issue a separate Certificate of Registration (BIR Form 2303) for the branch
- Approve your Authority to Print (ATP) new receipts or invoices under the branch name
- Register your Books of Accounts for that specific branch
5. Register with the LGU’s Business Tax Division
Many LGUs now require businesses to register their branch with the City Treasurer’s Office or Business Tax Division for local tax mapping and assessment. This ensures your branch is properly recorded for local business tax purposes.
6. Update Employer Registrations (if hiring staff)
If your branch will have employees, update your records with the following agencies for the new business address:
- Social Security System (SSS)
- PhilHealth
- Pag-IBIG Fund (HDMF)
This allows proper remittance of employee contributions and compliance with employment regulations.
Tax Implications: What Changes?
- Separate Books, Separate Receipts: Each branch keeps its own books and issues its own receipts. That means more paperwork, but it also makes tracking sales and expenses per branch easier.
- VAT and Percentage Taxes: If you’re VAT-registered, sales from the new branch get added to your total sales for VAT computation. The same goes for percentage taxes.
- Income Tax: All sales and expenses from all branches are combined when you file your annual income tax return.
Don’t Forget the LGU!
The local government unit (LGU) where your new branch is located will require you to pay local taxes. This is on top of what you pay for your main office. Make sure to check if the city or municipality has any special requirements or incentives for new businesses.
A Few Pro Tips:
- Keep copies of everything. You’ll thank yourself later.
- Assign someone to handle the branch’s paperwork. It’ll keep things running smoothly.
- Stay on top of deadlines. Permits and registrations have expiration dates!
Final Thoughts
Expanding your business is exciting, but the paperwork shouldn’t slow you down. Registering your branch and understanding the tax implications sets you up for smoother operations—and less stress.
If you ever feel lost or overwhelmed by the process, remember that you don't have to manage it all alone. That's where an expert partner makes the biggest difference.
Ready to partner with a team that handles the complexity of growth?
At Evergrow Business Services, we specialize in providing small business owners the accurate bookkeeping and strategic insights they need to expand without the administrative stress. We handle the records, tax implications, and compliance needs so you can focus 100% on serving your new market.
Ready to Scale? Contact Evergrow.
Instead of stressing over VAT and deadlines, let us fulfill your accounting needs so you can focus on strategy. Reach out to our team today to discuss a customized service package that meets the unique needs of your growing Davao business.
Disclaimer:
The information in this blog is provided for general informational purposes only and is not intended as professional accounting, tax, or legal advice. While we aim to share accurate and timely information, laws and regulations may change and individual circumstances vary. For advice specific to your situation, please consult with a qualified accountant or professional advisor.