RA NO.

11976:
EASE OF PAYING
TAXES ACT
Presented by:

ATTY. JOSEPHINE G. GOMEZ, DCL

 HISTORY
TIMELINE OF EOPT

05 January 2024 22 January 2024 6 month period

Signing into law Effectivity Transitory period
6-month transitory period from the
Republic Act no. 11976, otherwise effectivity of the IRR to comply with
EOPT took effect 15 days after
known as the EASE OF PAYING amendments to TITTLE IV (VAT)
its publication
TAXES (EOPT), was signed into and TITLE V (OPT)
law by President Marcos

SoF, after consultation with BIR and private sector,

The law was published in the Official would promulgate the IRR within 90 calendar days
Gazette from effectivity

Publication Promulgation of IRR

07 January 2024 21 April 2024
 COVERAGE OF THE
DISCUSSION

Filing of
Income Taxes /
Classification Registration Return and
Withholding
of Taxpayers Related Rules Payment of
Taxes
Taxes
 Invoicing and Refund of Refund of Taxes –
Value -Added Erroneously or
Record Taxes – Excess
Tax Illegally Collected
Keeping Input Tax
Tax

COVERAGE OF THE
DISCUSSION
SUMMARY
OF REVENUE
ISSUANCES

RR’s (8)

RMO’s (3)

RMC’s (16)
 Publication of revenue issuances and
RR 2-2024 other information materials of the BIR

RR 3-2024 VAT AND PERCENTAGE TAX

Filing of tax returns and payment of

RR 4-2024 taxes and other matters affecting the
declaration of taxable income

Implements Sections 76(C), 112(C),

RR 5-2024 112(D), 204 (C), 229 , and 269 (J) of the
NIRC of 1997,
On imposition of reduced interest and
penalty rates for micro and small RR 6-2024
taxpayers

Registration procedures and invoicing RR 7-2024

requirements

On the classification of taxpayers RR 8-2024

Relative to the deadlines for

compliance with the invoicing RR 11
-2024
requirements
VAT PROVISIO
 GROSS SALE
Gross Selling Accrual basis
Price
Sales of goods and services,

Including transactions to
GROSS Gross value in
government or any of its political
money
SALES subdivisions,

Instrumentalities or agencies, and

Gross receipts Government -owned or controlled

corporations (GOCCs).
GROSS SALES
Means the total amount of For long -term contracts for one
money or its equivalent which year or more, the invoice shall
the purchaser pays or is be issued in the month when
obligated to pay the seller . the service was rendered .

It excludes amounts earmarked Sales discounts and allowances

for payment to third party or for services expressly apply to
received as reimbursement . services .
The VAT (Value-Added Tax) liability on
the sale or exchange of services and Sales of services
lease of property shall be levied,
assessed and collected on gross s hal l be subj ect to
sales. It shall no longer based on
gross receipts . VAT bas ed on gr oss
Consequently,
shall be
sales invoices
sufficient to
sal es , not anymor e
substantiate sales of services
and the corresponding input VAT
on gr oss r eceipts
arising therefrom .
[s ection 108]
VAT-registered sellers of
services shall issue only one
type of document – the VAT
sales invoice .
 INVOICE
Shift for sale of service :

Cash basis Accrual basis

INVOICE

The EOPTAct mandates a single document

for both sales of goods and services .

Sales/Commercial
Invoices
INVOICE
Official Receipts
 Invoicing requirements
[Section 113(A),(B) and (D)]
A VAT official receipt is no longer required
to be issued in the sale of services or lease Exempt VAT transaction
of property .
‘Business style’ is no longer required to be [Section 109(CC)]
indicated in the invoice .
If a VAT invoice lacks information required
under Section 113(B), here are the The threshold amount of P3m in
consequences : Section 109(CC) shall be
Issuer shall be liable for non -compliance ; adjusted to its present value
and using the Consumer Price Index
Purchaser shall be allowed to claim the as published by the Philippine
input tax if the invoice contains the sales Statistics Authority every three
amount, VAT amount, name and TIN of both
parties, description of the goods or service, (3) years .
and transaction date .
 FILING AND
PAYMENT
Manual filing Electronically
Unavailability of the electronic
platforms to any AABS AND RCOs.
 Deduction :
After the lapse of agreed payment period
VAT must be fully paid
The VAT component of uncollected
receivables must not have been claimed as
a deduction under Section 34 (E) of the Tax
Code .

Uncollected Receivable
Seller of goods or services
Refers to sales of goods and/or services on
May deduct output VAT on account that transpired upon the effectivity
uncollected receivables in of these Regulations which remain
the next quarter . uncollected by the buyer despite the lapse of
the agreed period to pay .

OUTPUT VAT CREDIT ON

UNCOLLECTED RECEIVABLE
 OUTPUT VAT CREDIT O
UNCOLLECTED RECEIVA
To be entitled to VAT credit, the following requisites
must be present :
The sale or exchange has taken place after the effectivity of
these Regulations ;
The sale is on credit or on account ;
There is a written agreement on the period to pay the
receivable, i.e. credit term is indicated in the invoice or any
document showing the credit term ;
The VAT is separately shown on the invoice ;
The sale is specifically reported in the Summary List of
Sales covering the period when the sale was made and not
reported as part of “various” sales ;
 OUTPUT VAT CREDIT ON
UNCOLLECTED RECEIVABLE
To be entitled to VAT credit, the following requisites
must be present :
The seller declared in the tax return the corresponding
output VAT indicated in the invoice within the period
prescribed under existing rules ;
The period agreed upon, whether extended or not, has
elapsed ; and
The VAT component of the uncollected was not claimed
as a deduction from gross income (i,e, bad debt)

The output VAT shall be

Recovery of These rules do not amend the conditions on the
added to the output VAT of
uncollected deductibility of bad debts expenses in the
the taxpayer during the income tax returns as provided in RR No. 25-02 .
receivables
period of recovery .
Cancellation
Due to:

Retirement from or
OF VAT cessation of business

REGISTRATION Changes in status

under Sec. 106(C) of
the Tax Code

VAT-registered person
Options to apply for unused input tax:

2 Tax Credit Certificate

For business dissolution or years Can be used to pay

internal revenue taxes
other

cessation:
Cash refund
The date of cancellation refers
to the issuance date of the BIR Apply from the date
of cancellation . If the taxpayer has no
Tax Clearance . outstanding tax liabilities
 From the date of
90 submission of
invoices and other
PERIOD WITH
days documents . WHICH
Grant refund for REFUND/ CREDIT
creditable input taxes
OF INPUT TAXES
Starts from the filing of SHALL BE MADE
If denied the claim and ends
upon the release of the
refund payment .

The Commissioner must A claim is officially filed

provide a written only when the taxpayer
explanation stating the submits the invoices
legal and factual basis for and supporting
the denial . documents as required .
 Denied/Not acted within
PERIOD WITHIN 90 days:
Consequences of
INACTION:
WHICH Failure to process

REFUND/ CREDIT 1st

the refund within
90 days is
OF INPUT TAXES punishable under
Section 269 (J) of
SHALL BE MADE 30 the Tax Code .
days Deliberate delays
by BIR officials
may result in
Appeal to the Court of
penalties .
Tax Appeal (CTA)
Refund
processing
continues
administratively
beyond the 90 -
Wait for the Commissioner’s final day deadline .
decision without judicial remedy.
 ONTHE FILING OF RETURNS AND
PAYMENT OF TAXES AND OTHER
MATTERS AFFECTING THE
DECLARATION OF TAXABLE INCOME
 Filing of tax returns and pay ment of taxes to be made
electronically or manually , regardles s of venue or
juris diction of the R evenue Dis trict Office (R DO);

R emoval of civil penalty in cas e of filing of return at the

wrong venue;

Non-filing of inc ome tax return by an Overs eas Contract

Worker (OCW) or Overs eas Filipino Worker (OFW);

R emoval of additional requirements for deductibility of

certain pay ments ; and

Withholding of tax at s ourc e and declaration of inc ome of

recipient.

ON THE FILING OF RETURNS AND PAYMENT OF

TAXES AND OTHER MATTERS AFFECTING THE
DECLARATION OF TAXABLE INCOME
 FILING OF ITR FOR MARR
INDIVIDUALS
Joint filing of ITRs
Husband and wife, whether
citizens, resident or
nonresident aliens, who are
both self -employed, must After electrically AAB s and R COs s hall
file their tax return jointly . filing of tax returns only ac c ept tax
pay m ents m anually
Applies to both business
owners and professionals . af ter the tax pay er s
have alr eady
Separate filing in elec tr onic ally f iled
special cases Exemptions may their tax r etur ns
When spouses are apply when an UN LE S S an
registered under different official advisory ADV IS OR Y is is s ued
Revenue District Offices allow ing M AN UAL
(RDOs), each spouse must
permits manual
filing . F ILIN G.
file separately .
Section 248(A)(2)
of Tax Code
Amended EOPT
REMOVAL O
Civil penalty
CIVIL PENALT
IN CASE OF
FILING OF
NO LONGER
25% IMPOSED RETURN AT T
WRONG VEN
 An individual earning purely compensation income
whose taxable income does not exceed Two
INDIVIDUALS Hundred Fifty Thousand pesos (P250 ,000 .00 )
An Individual whose income tax has been correctly
NOT REQUIRED withheld by his employer, provided that such
individual has only one employer for the taxable
TO FILE INCOME year .
An individual whose sole income has been subjected
to final withholding tax ;
TAX RETURN A minimum wage earner
Citizen of the Philippines who is working and
deriving income solely from abroad as an “Overseas
Contract Worker (OCW)” or “Overseas Filipino
Worker” as defined in the “Department of Migrant
Workers Act” .

All individual deriving compensation income

Regardless of the amount, from two (2) or more concurrent

or successive employers at any time during the taxable year,
are not qualified for substituted filing . Thus, they are still
required to file a return .
 REMOVAL OF THE
ADDITIONAL REQUIREM
FOR DEDUCTIBILITY
CERTAIN PAYMENT
The obligation to withhold
tax on certain income
payments and remit still
remains .
 The obligation of the payor to deduct and withhold the tax
Time of Withholding Section 2.57 of these Regulations arises at the time an
income has become payable .

Refers to the date the obligation becomes due, demandable

“Payable” or legally enforceable .

The obligation of the payor to deduct and withhold the tax arises at
the time an income payment is accrued or recorded as an expenses
or asset, whichever is applicable, in the payor’s books, or at the
issuance by the seller of the sales invoice or other adequate
document to support such payable, whichever comes first .

WITHHOLDING OF TAX
AT SOURCE
ON THE IMPOSITION OF RED
INTEREST AND PENALTY FOR THE
MICRO AND SMALL TAXPAYERS
 Refers to a taxpayer whose gross
sales for a taxable year is Three
Million Pesos (P3,000 ,000 .00 ) to
less than Twenty Million Pesos
(P20 ,000 ,000 .00 ).

MICRO TAXPAYER
SMALL TAXPA
Refers to a taxpayer whose
gross sales for a taxable year
is less than Three Million
Pesos (P3,000 ,000 .00 ).
 IMPOSITION OF CIVIL PENALTIES
A penalty equivalent to ten percent (10%) of the amount due, in the
following cases :
Failure to file and pay the tax due thereon as required under the
provisions of the Tax Code or rules and regulation on the date prescribed .

In case of an amended tax return if the In case of a deficiency tax assessment

covered taxpayer filed the initial tax return as a result of a tax audit, if the particular
and paid the tax due on or before the tax return being audited was found to
prescribed due date of its filing . have been filed beyond the prescribed
period or due date .

NO PENALTY shall PENALTY shall

be imposed be imposed
A penalty equivalent to ten percent (10%) of the amount due, in the
following cases :

Failure to pay the deficiency tax within the time prescribed for its
payment in the notice of assessment ; or

Failure to pay the full or part of the amount of tax shown on any
return required to be filed under the provisions of the Tax Code
or rules and regulations, or the full amount of tax due for which
no return is required to be filed, on or before the date prescribed
for its payment .

IMPOSITION OF CIVIL PENA

 IMPOSITION OF CIVIL PENALTIES

Failure to file tax If payment is made before

return or submitting 50% fraud is discovered, the
penalty applies to the
a false or fraudulent
return .
penalty deficiency tax instead .

“SUBSTANTIAL UNDER-DECLARATION OF “SUBSTANTIAL OVERSTATEMENT OF

TAXABLE SALES OR INCOME” DEDUCTIONS”

Means failure to report sales or income in an Means a claim of deductions in an

amount exceeding thirty percent (30 %) of amount exceeding thirty percent (30 %)
the declared per return ; of actual deductions .
 Of the standard interest

IMPOSITION OF
rate in Section 249 of the
50% Tax Code will be charged on

INTEREST any unpaid taxes

covered taxpayers .
by

Is the legal interest rate

6% for covered taxpayers .
Penalty for each failure
FIVE
IMPOSITION
to file an information
return, statement or list, HUNDRED PENALTY FOR
or keep any record, or PESOS FAILURE TO FILE
supply any information (₱500.00)
as may be required, on CERTAIN
the date prescribed . INFORMATION
RETURNS
In no case shall the aggregate
amount to be imposed for all
such failure during a calendar
year exceed Twelve Thousand
Five Hundred Pesos
(₱12,500 .00 ).
 Is the reduced compromise penalty
applied to criminal violations under
Sections 113, 237, and 238 of the Tax

50% Code, if fraud is not involved . This

penalty follows the applicable rate in
Annex "A" of Revenue Memorandum
Order No. 7-2015, including any
amendments .

The compromise penalty is collected instead of

criminal prosecution for tax violations, as long as a
valid compromise agreement is made between the
taxpayer and the Commissioner of Internal
Revenue .

COMPROMISE PENA
ON TAX REFUN
(RR NO. 5-2024)
Section 112(C) of the Tax Code that introduced the risk -
based approach to verification of VAT refund claims ;
Section 112(D) of the Tax Code which clarified the
liability of the taxpayer -claimant and the BIR in case of
disallowance by the Commission of Audit (COA);
Section 76(C) of the Tax Code allowing the application
for refund of unutilized excess income tax credit in case
of dissolution or cessation of business . For purposes of
these Regulations, the entire provision of 76(C) of the
Tax Code shall be covered to include policies for the
processing of income tax credit/refund of taxpayers
who have chosen the option to apply for tax credit or
refund the excess income tax in their Annual Income
Tax Returns (AITR);
Section 204 (C) of the Tax Code that introduced the one
hundred eighty (180)-day processing of claims for tax
refund except for VAT Refunds under Section 112of the
Tax Code ; and
Section 229 of the Tax Code that outlined the policies
for judicial claims and repealed the supervening clause
provision thereof .
 The scope of verification in accordance with the
identified risks as follows :

Submission of
Complete
Scope of Verification of Scope of Verification of
Risk Level Documentary
Sales Purchases
Requirements
Prescribed by BIR*
Low Yes No verification No verification
Medium Yes At least 50% of the amount At least 50% of the total
of sales and 50% of the total amount of purchases with
invoices/receipts issued input tax claimed and 50% of
including inward remittance suppliers with priority on
and proof of VAT zero-rating “Big-Ticket” Purchases

High Yes 100% 100%

Claims filed by first -time claimants VAT credit/refund claims for any
shall be automatically considered as unused input tax pursuant to Section
high -risk and shall remain as such for 112(B) of the Tax Code filed by a VAT-
the succeeding three (3) VAT refund registered person whose registration
claims . has been cancelled due to retirement
from or cessation of business, or due
In case of full denial of claim, the
to changes in or cessation of status
succeeding claim filed shall be
under Section 106(C) of the Tax Code
classified as high -risk .
shall be classified as high -risk and will
For medium -risk claims, verification require full verification thereof .
shall be adjusted to 100% if the
For Taxpayer -claimants filing on a
assigned Revenue Officer at least 30 %
quarterly basis, the risk classification
disallowance of the amount of VAT
shall be made for every filing .
refund claim .
Claims classified as low -risk for the
three (3) consecutive filing of VAT
refund claims shall be subject to
mandatory full verification on the
fourth (4 th ) VAT refund claim regardless
of the risk classification .
The following are the main risk factors that
will be used as guide by the BIR in establishing
the risk -level of each claim :

Tax compliance history;

Amount of VAT refund claim; and

Frequency of filing VAT refund Other risk factors that may

claims; be identified.

The BIR may expand the above list into sub -categories and assign
weights to each category to arrive at a more comprehensive and
accurate risk classification of the claim .
In order to properly implement Section 76(C) of the Tax Code, the
following rules shall apply :

Regular Claims
This applies to claims for income tax credit/refund of taxpayers
of “going -concern” status who have chosen the option to apply
for tax credit or refund the excess income tax in their AITRs.

Under Section 58 (E) of the Tax Code, as amended by the

EOPT Act, any creditable tax withheld at source under
Section 57 must be included in the recipient's AITR. If the
tax withheld exceeds the tax due, the excess amount shall
be refunded, following the provisions of Section 204 of
the Tax Code .

CREDIT/REFUND OF UNUTILIZED
EXCESS INCOME TAX CREDIT
UNDER SECTION 76(C)
 CREDIT/REFUND OF UNUTIL
EXCESS INCOME TAX CRED
UNDER SECTION 76(C)
Regular Claims

If a taxpayer qualifies for a tax credit or refund

due to excess income taxes paid, the excess
amount from the final adjustment return can be
carried over and credited against quarterly
income tax liabilities for future taxable years .
However, once the taxpayer chooses to carry
over the excess tax, this option becomes
irrevocable for that taxable period, meaning
they cannot apply for a cash refund or request
a Tax Credit Certificate (TCC) later on .
 Regular Claims

If a taxpayer opts for a Tax Credit Certificate

(TCC) or refund but carries forward the amount
in their Annual Income Tax Return (AITR) for the
following year, their claim for a tax credit or
refund may be denied . However, the carried -
over amount can still be used as a credit against
future income tax liabilities of the taxpayer .

CREDIT/REFUND OF UNUTILIZED
EXCESS INCOME TAX CREDIT
UNDER SECTION 76(C)
 CREDIT/REFUND OF UNUTILIZ
EXCESS INCOME TAX CRED
UNDER SECTION 76(C)
Regular Claims

Requisites in claiming tax credit or refund of unutilized excess income tax :

The foiling of claim for TCC/refund must be made within two (2) years from
the date of filing of the AITR.
The income upon which the taxes were withheld must be included as part
of the gross income declared in the income tax return of the recipient .
The fact of withholding is established by a copy of the withholding tax
certificate duly issued by the payor (withholding agent) to the payee showing
the amount of income payment and the amount of tax withheld . The taxpayer -
claimant must be identified as the payee in the withholding tax certificate .
 Dissolution or Cessation of Business
As an exception to the irrevocability rule, the taxpayers who chose the option
to “carry -over” may claim a refund provided that they have permanently
ceased operations as also contemplated under Section 76(C) of the Tax Code .
Taxpayer cannot carry over their excess income tax credit due to
business dissolution or cessation, they must file an application for a
refund of any unutilized excess income tax credit .

The Bureau of Internal Revenue (BIR) must process and refund excess taxes
within two (2) years from the date of dissolution or cessation of business, as
stated in Section 10 of the EOPT Act, amending Section 76 of the Tax Code .
This rule overrides the standard 180-day processing period for Tax Credit
Certificate (TCC) or refund under Section 204 (C) of the Tax Code .

CREDIT/REFUND OF UNUTILIZED
EXCESS INCOME TAX CREDIT
UNDER SECTION 76(C)
 CREDIT/REFUND OF UNUTILIZ
EXCESS INCOME TAX CRED
UNDER SECTION 76(C)
Dissolution or Cessation of Business

The 2-year period to process and refund

excess taxes begins when the taxpayer
submits the Application for Registration
Information
2 Update/Correction/Cancellation
No. 1905) along with
(BIR Form
complete
YEAR documentary requirements for business
closure and refund of excess income taxes
under Section 76 of the Tax Code .
 The Commissioner of Internal Revenue may
PROCESSING OF TAXcredit or refund taxes that were
CREDIT/REFUND erroneously
penalties
or illegally
imposed without
received or
authority .
CLAIMS UNDER Additionally, the Commissioner may refund
the value of returned internal revenue
SECTIONS 204(C) stamps if they are in good condition and, at
AND 229 OF THE TAX
their discretion, redeem or replace unused
stamps that are unfit for use upon proof of
CODE. destruction .

CREDIT/REFUND
TAX
A tax credit or refund is only allowed if the
taxpayer files a written claim with the
Commissioner within two (2) years from the
payment date, as per Section 229 of the Tax Code.
PROCESSING OF
A return showing overpayment qualifies as a
CREDIT/REFUN
written claim . CLAIMS UNDE
The 2-year period
submission
starts only
of complete documents, as
after SECTIONS 204(
required by the Bureau of Internal Revenue
(BIR
AND 229 OF THE
CODE.

WRITTEN 2
YEAR
CLAIM
 Under Sections 204 (C) and 229 of
PROCESSING OF TAX the Tax Code, the Bureau of Internal
CREDIT/REFUND Revenue (BIR) must process and
decide on a tax credit/refund within
CLAIMS UNDER 180 days from the submission of
SECTIONS 204(C) complete documents until payment
of the refund or issuance of the Tax
AND 229 OF THE TAX Credit Certificate (TCC).
CODE.
180
DAYS
PROCESS WITHIN
 Processing income tax credit/refund under Section
76(C) for a taxpayer with a going -concern status
requires a thorough audit of the books of accounts
to verify the legitimacy of the refund . PROCESSING O
To comply with the 180-day processing time frame CREDIT/REFUN
mandated by Section 204 (C) of the Tax Code, all
relevant offices must prioritize these claims in CLAIMS UNDE
accordance with Sections 76(C), 204 (C), and 229 of
the Tax Code . SECTIONS 204
AND 229 OF THE
180 CODE.
DAYS
Audit through books
of accounts

The processing of income tax credit/refund should

not be delayed due to pending audits of other
internal revenue tax liabilities .
 Claim/s for tax credit/refund under
PROCESSING OF TAXSection 204 (C) and 299 of the Tax
Code must conform with the
CREDIT/REFUND following essential requisites :
CLAIMS UNDER The tax credit/refund claim pertains to
SECTIONS 204(C) erroneously or illegally received or
collected taxes or penalties imposed
AND 229 OF THE TAX without authority .

CODE. Filing of a claim for tax credit/refund

must be done within two (2) years after
payment of the tax or penalty .

The erroneously or illegally received or

collected taxes must be supported with a
copy of the duly filed tax return with the
corresponding payment remitted to the
BIR.
In case the tax refund/credit is not acted upon
by the Commissioner within the 180-day period,
the taxpayer -claimant may opt to : PROCESSING O
CREDIT/REFUN
Appeal to the CTA within the 30 -day period
after the expiration of the 180 days CLAIMS UNDE
required by law to process the claim ; or
SECTIONS 204(
Forego the judicial remedy and await the
final decision of the Commissioner on the
AND 229 OF THE
application of VAT refund claim .
CODE.
When the BIR failed to render a decision
within the 180-day period and the taxpayer -
claimant opted to seek for a judicial remedy
within thirty (30 ) days from such period,
administrative claim for refund shall be
considered moot and shall no longer be
processed .
 Failure of any BIR official,
PROCESSING OF TAX agent, or employee to process
and decide on a tax
CREDIT/REFUND credit/refund application
within the prescribed 180-day
CLAIMS UNDER period shall be punished under
Section 269 (J) of the Tax Code .
SECTIONS 204(C)
AND 229 OF THE TAX A Tax Credit Certificate (TCC) can be applied to
CODE. any internal revenue tax liability, except
withholding taxes, for which the taxpayer is
directly responsible . If a taxpayer requests a
refund of an unutilized TCC, it may be allowed
under Section 230 of the Tax Code, provided
that the original TCC showing a creditable
balance is surrendered for verification and
cancellation . However, no tax refund shall be
granted for incentives received under special
laws if no actual payment was made .
REGISTRATION PROCEDURE
INVOICING REQUIREMENTS
(RR 7-2024)
 It is also referred to as a “principal

INVOICE
invoice” and is categorized as follows :

VAT Invoice
A written account evidencing the sale of It is a written account evidencing the sale
goods and/or services issued to of goods, properties, services and/or
customers or buyer in the ordinary leasing of properties subject to VAT and it
course of trade or business . This includes : shall be the basis of the output tax liability
of the seller and the input tax claim of the
MISCELLANEOUS INVOICE buyer or purchaser .
Charge/
Non -VAT Invoice
It is a written account evidencing the sales
of goods, properties, services and/or
leasing of properties not subject to VAT and
if applicable it shall be the basis of the
Percentage Tax liability of the seller .
 Supplementary document
Is a written document, other than sales or commercial
invoice, which serves as source of accounting entries in the
books of accounts .

Includes but not limited to: Any other document, by whatever name it is
known or called, whether prepared
manually (handwritten information) or pre -
printed/pre -numbered loose leaf
(information typed using spreadsheet
program or typewriter) or computerized as
long as they are in the ordinary course of
business and being issued to customers or
otherwise .
A VAT- registered person shall issue a duly
registered VAT Invoice, for every sale, barter,
exchange or lease of goods or properties, and
for every sales, barter or exchange of services
regardless of the amount of the transaction . INVOICING
REQUIREMENTS
VAT- registered
person

A VAT Invoice shall be issued as evidence of

sale of goods and/or properties and 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
(credit), which shall be the basis of the output
tax liability of the seller and the input tax claim
of the buyer .
 The following information shall be indicated in the VAT
invoice :
Information A statement that the seller is a VAT-registered person
followed by the seller’s Taxpayer Identification Number
contained in a (TIN) and Branch Code (e.g., VAT Reg TIN 123-456 -789 -
00000 );

VAT invoice
The total amount which the purchaser pays or is
obligated to pay to the seller with the indication that
such amount includes the VAT; provided that :
The VAT amount is shown as a separate item ;
The term “VAT-Exempt Sale” is written or printed, if the sale is
exempt from VAT;
The term “Zero -Rated Sale” is written or printed, if the sale is
subject to Zero percent (0 %) VAT;
If the sale involves goods, properties or services some of
which are subject to and some of which are VAT Zero -Rated or
VAT-Exempt, the invoice shall clearly indicate the breakdown
of the sale price between taxable, exempt and zero -rated
components and the calculation of the VAT on each portion of
the sale shall be shown on the invoice ; Provided, that the
seller may issue separate invoices for the taxable, exempt and
zero -rated components of the sale .
The following information shall be indicated in
the VAT invoice :
Information
The date of transaction, quantity, unit
cost and description of the goods or contained in a
properties or nature of the service ;
VAT invoice
In the case of sales in the amount of
One thousand pesos (₱1,000 ) or more
whare the sale or transfer is made to a
VAT-registered person, the registered
name or name, address and TIN of the
purchaser, customer or client .
 CONSEQUENCE OF ISSU
ERRONEOUS VAT INVOICE
All person who are not VAT-registered and issue a VAT Invoice showing the
person’s TIN followed by the word ‘VAT’ or showing the information under
Section 3(B)(1) of these Regulations, shall, in addition to other percentage taxes,
be liable to :

VAT imposed under Section 106 or 108 Tax Code,

i
without the benefit of any input tax credit and

Issued ii A fifty percent (50 %) surcharge under Section

248 (b) of the Tax Code .

The VAT shall be recognized as an input tax credit under Section 110of
the Tax Code, to the purchaser, buyer or receiver of erroneous VAT
Invoice if all the required information under Section 3(B)(1) of these
Regulation are shown on the invoice .
 V AT R egis ter ed per s on or S eller
V AT-E x em pt

Is s u e d V A T
IN V O IC E

Fails to dis play the ter m ‘V AT-E x em pt S ale’ S hall be liable f or the V AT in
or c learly provide a break dow n of the V AT- S ec tion 10 6 and 10 8 as if S ec tion
E x em pt S ale on the invoic e as pr ovided f or 10 9 of the TAX Code did not apply .
under S ec tion 3(B )(2.4 ) of thes e R egulation.

CONSEQUENCE OF ISSUING
ERRONEOUS VAT INVOICE
 From the day following the
deadline, in the filing of the

PRESERVATI
return, or if filed after the
deadline, from the date of the
5 filing of the return, the taxpayer
shall preserve all Books of
years Accounts,
subsidiary
including
books and other
the

accounting records of
corporations, partnerships, or
persons .

Ty pe 5 y ear s
1. M anual B ook s of Ac c ounts and Other In har d
ac c ounting r ec or ds c opies

2. M anual B ound Loos e Leaf B ook s of In har d

Ac c ounts and other ac c ounting r ec or ds c opies

3. Com puter ized B ook s of Ac c ounts and In elec tr onic

other ac c ounting r ec or ds c opies
 “Other accounting records”

PRESERVATION Includes the corresponding

invoices, receipts, vouchers and
returns, and other source
documents supporting the
entries in the Books of
Accounts .

“Last entry”

Refers to a particular business transaction

or an item thereof that is entered or
posted last or the latest in the Books of
Accounts when the same was closed .
If a taxpayer has a pending protest or claim for a
tax credit/refund, and the books and records are

PRESERVAT
material to the case, they must preserve these
records until the case is fully resolved —even
beyond the prescribed 5-year retention period .

An independent Certified Public Accountant (CPA)

who audited and certified a taxpayer’s financial
statements must retain electronic copies of the
audited financial statements and audit working
papers for five (5) years from either the due date
of filing or the actual filing date of the annual
income tax return, whichever is later .
 The Commissioner of the Bureau of Internal Revenue (BIR)
has the authority to obtain information and conduct
separate examinations of financial records .

All corporations,
partnership or persons
that retire from business
given by the BIR
Commissioner to submit
their books of accounts .

10 Corporations
partnerships planning to
and

Taxpayer
inspected
records must
at their place
be
of
days dissolve must notify the
Commissioner and cannot
be dissolved until they are
business or at the BIR office cleared of tax liabilities .
 EXAMINATION AND INSPEC
All books, records, vouchers, and supporting documents required by
the Bureau of Internal Revenue (BIR) must be kept intact, unaltered,
and unmutilated in the taxpayer’s place of business . These records
are subject to inspection by internal revenue officers, and upon
request, they must be immediately presented for review .

The books of accounts and accounting records may be examined and

inspected for various purposes, including audit, requests for
exchange of information by a foreign tax authority under Sections 6
and 71of the Tax Code, and as part of the Commissioner’s authority to
obtain information under Section 5 of the Tax Code .
The examination and inspection of Books of Accounts and accounting
records must take place either at the taxpayer’s office or place of
business or at the Bureau of Internal Revenue (BIR) office .
RDO-065

MANUALLY BIR ONLINE

RDO-074 REGISTRATION
Taxpayer not
engaged in
business and
wants to
transfer

Apply for business registration

TRANSFER OF REGISTRATION OF
NON-BUSINESS TAXPAYERS
 TRANSFER OF REGISTRATIO
BUSINESS TAXPAYERS
All open -cases/stop -filer cases shall
RDO-074 be settled at the new RDO, except
for those who are subject to audit
investigations in which case any
audit findings including open -
Secure a new BIR Certificate cases/stop -filer cases shall be
of Registration from its new
MANUALLY settled at the RDO which initiated
RDO. The new RDO shall the same .
include all newly transferred
business taxpayers in its Taxpayers with open -cases/stop -
monthly TCVD after thirty filer cases who are not subject to
(30 ) days from the issuance audit investigations shall be
BIR of new BIR Certificate of
ONLINE transferred to the new RDO within
Registration
REGISTRATION . the prescribed period together with
its open -cases/stop -filer cases .
 Any person who carries on or
engages in any business and
is not duly registered with the
BIR shall, upon conviction for
each act or omission, be
punished in accordance with
the penalty provided in Sec.
258 of the Tax Code.

Not registered

UNLAWFUL PURSUIT OF
BUSINESS
ISSUANCE
All persons subject to an internal revenue
tax shall, at the point of each sale and
transfer of merchandise or for services
rendered valued at Five hundred pesos
(₱500 .00 ) or more, issue duly registered
invoices, showing the name, Taxpayer
Identification Number (TIN), date of
transaction, quantity, unit cost and
description of merchandise or nature of
service .

Shall be adjusted to its

present values every three
(3) years using the consumer
₱500 price index, as published by
the Philippines Statistics
Authority (PSA).
 The s eller s hall

ISSUANC
is s ue invoic e
w hen the
tax pay er r equir es
r egar dles s of the
Is s u e am ount of
r ans ac tion/

Aggr egate s ales is

at leas t P 50 0 .0 0

R egar dles s of the

am ount of the
VAT s ale and tr ans f er
Registered of m er c handis e or
f or s er vic es
person r ender ed.
 The w or d “Invoic e” s hall be pr inted on

ISSUANCE
the f ac e of the invoic e to be is s ued to
buy er or c us tom er s , and pr om inently
pr inted or lar ger than the w or d
des c r ibing the tr ans ac tion
The term Cas h S ales or Char ge S ales , at
the s eller ’s option, c an be indic ated in the
Invoic e as c hec k box es to r ef lec t the ty pe
of tr ans ac tions .

Have a s epar ate of invoic es f or c as h

s ales or c har ge s ales . That indic ate the
w or d “Invoic e”.
• Cas h Invoic e,
• Char ge Invoic e/Cr edit Invoic e,
• B illing Invoic e,
• S er vic e Invoic e, etc .
 Cons ider ing that the E a s e of
P ay ing Ta x es Ac t no longer
r equir es the is s uanc e of Of f ic ial
R ec eipts .
ISSUANC
N o longer r equir ed to
is s ue
The Invoic e w ill be the pr im ar y
Of f ic ial R ec eipt, Collec tion R ec eipt or evidenc e f or both s ales of goods and
P ay m ent R ec eipt c an s till be is s ued as pr oof s er vic es .
of pa y m ent but f or s upplem ental doc um ent
only . To pr om ote eas e of doing bus ines s , the
unus ed OR c an s till be us ed but a s an option
of the tax pay er .
 Supplementary Documents

ISSUANCE
Requirement
Of f ic ial r ec eipts , deliver y r ec eipts , or der
s lips , pur c has e or ders , ac k now ledgm ent
r ec eipts , c ollec tion/c as h r ec eipts ,
c r edit/debit m em os , job or ders , and
s im ilar doc um ents mus t inc lude es s ential
tax -r elated inf or m ation.

Mandatory Disclaimer
Thes e doc um ents m us t boldly dis play the
phr as e: "THIS DOCUM E N T IS N OT V ALID
FOR CLAIM OF IN P UT TAX ." on the f r ont.

Accounting Records
Thes e s upplem entar y doc um ents f or m
par t of the tax pay er 's ac c ounting rec or ds
and ar e is s ued to c us tom er s .
 Tax pay er w hos e

ISSUANC
tr ans ac tions ar e
not s ubjec t to
V AT or
per c entage tax
s hall is s ue N on-
V AT Invoic e
indic ating at the
f ac e of s uc h
invoic e the
“E X E M P T”.

If the tax pay er is not V AT-r egis ter ed and is

s ubjec t to per c entage tax under Title V of the
Tax Code, but s ells goods /s er vic es under
S ec tion 10 9 (A) to (CC) ex c ept (E ) of the s am e
S ec tion, then the N on-V AT Invoic e s hall
indic ate the br eak dow n of S ales S ubjec t to
P er c entage Tax (S S P T) and E x em pt S ales .
 PRINTING OF INVOICES UND
SECTION 238 OF THE TAX C
All persons, whether private or government
will apply form The BIR an Authority to Print
(ATP) principal and supplementary
documents, free of charge .

N o author ity to pr int invoic es s hall be

gr anted unles s to be pr inted ar e s er ially
num ber ed and s hall s how , am ong other
things ,
 N am e,
 TIN and
 B us ines s addr es s of the per s on or
entity to us e the s am e, and s uc h other
inf or m ation.
 J a n u a r y 22, 20 24

The payment of Annual Registration Fee

of Five Hundred Pesos (P500 .00 ) for National Government
Government Owned and
every separate or district establishment Agencies (NGAs)
Controlled Corporation
or place is repealed and shall no longer (GOCCs)
be applicable .

Engaged in proprietary
functions shall apply
for ATP in the printing
of their principal and
supplementary
Local Government Units
documents .
(LGUs)
 N o t r e q u ir e d t o b e NOT
r e p la c e d e v e n if it in c lu d e s R E Q U IR E D
r e g is t r a t io n fe e (R F )
TO P AY

U p d a t e t h e C O R if
th ere a re c h a n g es

CERTIFICATE OF REGISTRATION (COR)

REFLECTING THE REGISTRATION FEE
 UNUSED OFFICIAL RECE

Taxpayer to continue the use

of Official Receipts as
supplementary document .

All unused or unissued Official

Receipts may still be used as
supplementary document until fully
consumed, provided that the phrase
“THIS DOCUMENT IS NOT VALID FOR
CLAIM OF INPUT TAX”.
 Taxpayer to convert and use the
remaining Official Receipts as
Invoice .
IN V O IC E

Uns tam ped w ill be V alidity per iod f r om Januar y 22 to

c ons ider ed s upplem entary Dec em ber 31, 20 24 .
doc um ents .
The tax pay er c an s tam p the Of f ic ial
Tax pay er s hould obtain
R ec eipts as Invoic es . It does not
new ly pr inted invoic es w ith
r equir e the appr oval of R evenue
ATP bef or e c ons um ing the
Dis tr ic t Of f ic es /LT Of f ic es /LT
c onver ted Of f ic ial R ec eipts .
Divis ions .

UNUSED OFFICIAL RECEIPTS

 UNUSED OFFICIAL RECE

R epor tor ial R equir em ent of IN V O IC E

Unus ed Of f ic ial R ec eipts to be
Us ed a s Invoic e upon E f f ec tivity
of thes e R egulations
All unus ed that is c onver ted to
Invoic e s hall be r epor ted to B IR by
s ubm itting an inventor y or unus ed
of f ic ial r ec eipts , indic ating the
num ber of book lets and
c or r es ponding s er ial num ber s w ithin
thir ty (30 ) day s upon ef f ec tivity .
 “W e have to s tr ik e a balanc e
betw een pr oviding r elief to
tax pay er s , on the one hand, and
m aintaining adm inis tr ative
ef f ic ienc y thr ough the integr ity of
our tax c ollec tion and m onitor ing
m ec hanis m s , on the other ,” the
P r es ident ex plained.
THANK YOU