Implementing the Registration Procedures and Invoicing Requirements Under the Ease of Paying Taxes Act

On 11 April 2024, the Bureau of Internal Revenue (“BIR”) issued Revenue Regulation (“RR”) No. 7-2024 which implements Sections 113, 235, 236, 237, 238, 242, and 243 of the National Internal Revenue Code of 1997, as amended (“NIRC”) by R.A. No. 11976 otherwise known as the “Ease of Paying Taxes Act” (“EOPTA”), on the Registration Procedures and Invoicing Requirements. The salient changes are as follows:

Invoicing Requirements

According to RR No. 7-2024, a value-added tax (“VAT”) invoice shall be issued as evidence of the sale of goods and/or properties and the sale of services and/or leasing of properties issued to customers in the ordinary course of trade or business, whether cash sales or on account which shall be the basis of the output tax liability of the seller and the input tax claim of the buyer. RR No. 7-2024 further lists the required information to be indicated in the invoice.

Lacking Information in the Invoice

RR No. 7-2024 also provides that the issuance of a VAT invoice lacking information as required therein shall subject the seller or issuer to non-compliance with invoicing requirements. However, the VAT shall be allowed to be used as input tax credit on the part of the buyer, provided the lacking information does not pertain to the following:

1. Amount of sales;
2. VAT amount;
3. Registered name and Tax Identification Number of the buyer and seller;
4. Description of goods or nature of services; and
5. Date of transaction.

Preservation of Books of Accounts

Books of accounts including the subsidiary books and other accounting records shall be preserved by the taxpayer for 5 years reckoned from the day following the deadline in filing a return, or if filed after the deadline, from the date of filing of the return, for the taxable year when the last entry was made in the books of accounts.

The preservation may even be beyond the 5-year retention if the taxpayer has pending protest or claim for tax credit/refund of taxes until the case is finally resolved. The independent Certified Public Accountant who audited the records shares a similar responsibility.

Transitory Provisions

To implement the changes brought about by EOPTA and RR No. 7-2024, the transitory provisions are as follows:

1. Business taxpayers are not required to change their existing Certificate of Registration (“COR”) that includes the registration fee (Note: The payment of PHP500.00 annual registration has been repealed by EOPTA). Updating of the COR is only necessary if there are changes to the registration information excluding the registration fee.
2. All unused or unissued official receipts may still be used as supplementary documents until fully consumed provided that the phrase “This Document is not valid for claim of input tax” is stamped on the face of the document.
3. The official receipt, along with other equivalent documents such as collection receipt, acknowledgment receipt, and payment receipt are all the same, and serve as proof of payment that cash has been received or that payment has been collected.
4. Taxpayers are allowed to strikethrough the word “Official Receipt” on the face of the manual and loose leaf printed and stamp “Invoice”, “Cash Invoice”, “Charge Invoice”, “Credit Invoice”, “Billing Invoice”, “Service Invoice”, or any name describing the transaction and to be issued as primary invoice to its buyer until 31 DECEMBER 2024. These documents shall be valid for claim of input tax by the buyer for the period issued from 22 January to 31 December 2024, provided that the invoice to be issued bears the stamped “Invoice” and contains information required under Sec. 6 (B) of RR No. 7-2024.
5. Any Official Receipts (“ORs”), whether stamped with “Invoice” or unstamped, issued after 31 December 2024, will be considered supplementary documents and ineligible for input tax claims.
6. The stamping of ORs as invoices by the taxpayers does not require approval from any Regional District Offices (“RDOs”)/Large Taxpayer (“LT”) Offices/LT Divisions but must comply with the guidelines prescribed by the RR No. 7-2024.
7. All unused manual and loose leaf ORs to be converted into invoices shall be reported by submitting an inventory of unused ORs, indicating the number of booklets and corresponding serial numbers within 30 days upon effectivity of these regulations to the RDO/LT Office/LT Division where the head office or branch office is registered in duplicate original copies. The receiving branch RDO shall transmit the original copy to the head office RDO and retain the duplicate copy.
8. Taxpayers using cash register machine (“CRM”)/point of sales machine (“POS”)/e-Receipting/E-invoicing may change the word “Official Receipt” to “Invoice”, “Cash Invoice”, “Charge Invoice”, “Credit Invoice”, “Billing Invoice”, “Service Invoice” or any name describing the transaction, without the need to notify the RDO having jurisdiction over the place of business of such sales machines since the reconfiguration shall be considered as minor system enhancement which shall not require reaccreditation of sales software/system on the part of the software supplier nor the reissuance of the Permit-To-Use (“PTU”) on the part of the taxpayer-user.  
9. For taxpayers using duly registered Computerized Accounting System or Computerized Books of Account with accounting records, since the system reconfiguration will have a direct effect on the financial aspect, it shall be considered as a major enhancement that will require taxpayers to update their system registration following the existing policies and procedures of filing a new application. The previously issued Acknowledgment Certificate (“AC”) or PTU shall be surrendered to the RDO where the concerned taxpayer is registered, and a new AC shall be issued to the head office/branch(es). The required Annex of the AC shall indicate all the branches (if applicable) that are using the said system/software and the sets of series of accountable forms (invoice) to be used by each of the branches, if applicable.
10. To provide ample time to reconfigure machines and systems, adjustments shall be undertaken on or before 30 June 2024. Any extension due to enhancements shall seek approval from the concerned Regional Director or Assistant Commissioner of the LT Service which shall not be longer than 6 months from the effectivity of this RR No. 7-2024. 
11. Documents issued by CRM/POS, e-receipting, or electronic invoicing software containing the word “Official Receipt” beginning the effectivity of this RR No. 7-2024 shall not be considered valid for claim of input tax by the buyer.
12. Issuance of “Official Receipt” for the sale of goods or services after 30 June 2024 will not be considered as evidence of sales of goods or services and shall be tantamount to failure to issue or non-issuance of invoice subject to a penalty of not less than PHP1,000.00 but not more than PHP50,000.00 and suffer imprisonment of not less than 2 years but not more than 4 years.