Bookkeeping, Invoicing and Registration RequirementsPresented by:

Susan D. Tusoy, CPA, MPS

Asst. Chief, Assessment Division

BIR, Revenue Region 19, Davao City

This presentation covers:

Registration Requirements; Bookkeeping Requirements; and Invoicing Requirements.

REGISTRATION REQUIREMENTS

On Registration

Register your businessOn or before commencement of businessBefore payment of any tax dueUpon filing of a return, statement or declaration as

required by the NIRC.

Register your employee/swithin 10 days from date of employment

On Registration

Secure Taxpayer

Identification Number

Multiple TIN is punishable by law.

Registration Procedures7

PRIMARY REGISTRATION

SECONDARY REGISTRATION

Application &Issuance of TIN

Registration of Business/Practice of Profession/Employment

Registration of books, Issuance of ATP, CAS and Loose-leaf

STAGE 1 STAGE 2

Registration of Business

Pay Annual Registration Fee Secure Certificate of Registration; Proceed to Secondary Registration; Get “Ask for Receipt” Notice Attend Initial Briefing

On Registration

• Pay Annual Registration Fee of P500.00 upon registration and every year thereafter on or before Jan. 31• for every separate or distinct establishment or place of

business, including facility types where sales transactions occur

Certificate of Registration (COR)

Issuance of COR to HO,

Branch and Facility;

Posting of COR and Annual

Registration Fee Return In a way that is clearly and

easily visible to the public

Posting Requirement

Display “Ask For Receipt Poster” which shall be issued upon release of COR

Penalty: P1,000 and/or imprisonment of not more than 6 months.

Registration of Tax Types

Income Tax; VAT and/or Percentage Tax; Withholding Tax on Compensation; Creditable Withholding Tax at Source on certain

income payments; Final Withholding Tax on certain income payments; Documentary Stamp Tax; Excise Tax; and Annual Registration Fee.

Rules on Registration of Tax Types

Tax TypeHead Office (HO)

Only(Consolidated)

HO or Branch at

TP’s Option

Both HO and Branch

Income Tax

VAT

Percentage Tax

W/Tax - Compensation

Creditable W/Tax at Source

Final W/tax

Documentary Stamp Tax

Excise Tax

Annual Registration Fee

On Business Tax Type Registration

Mandatory VAT Registration

Gross Sales/Receipts (actual/ expected) for the past 12 months, except those that are exempt under Sections 109 (1)(A) to (U) of the Tax Code, exceeded P1,919,500.00.

On Business Tax Type Registration

Any person liable to VAT shall register with the RDO having jurisdiction over his/ its HO.

Failure to register as VAT shall make him/ it liable to pay the output tax, as if he/ it were a VAT-registered person, without benefit of input tax credits for the period in which he/ it was not properly registered.

On Business Tax Type Registration

Non-VAT Registration

1. Those subject to percentage taxes;

2. Those whose transactions are VAT-

exempt under Sect. 109 of Tax Code; and

3. Marginal income earners.

Optional Registration of VAT

1. Those who are VAT-exempt since annual gross

sales/receipts do not exceed P1,919,500.00;

2. Those who are engaged in mixed transactions;

3. Franchise grantees of radio and/or TV broadcasting annual gross receipts do not exceed P10M. This

option, once exercised, is irrevocable.

Optional Registration of VAT

Registration for optional VAT is not later than 10 days before the beginning of the taxable quarter.

Once registered, the optional VAT taxpayer is liable to output tax and entitled to input tax beginning the first day of the month following his registration.

Registration of All Storage Facilities (RR 2-2012)

All tank facilities, depots or terminals throughout the Phils., including those located within the Freeport Zones/Economic Zones shall be registered by the owners, lessors or operators with the BIR Office having jurisdiction over the said facilities.

Transfer of Registration

It shall be the duty of the transfering taxpayer to inform the BIR district office where he is registered of such fact by filing prescribed BIR Form specifying therein the complete address where he intends to transfer.

Cancellation of Registration

1. Death of an individual not subject to

estate tax;

2. Settlement of estate tax liabilities;

3. Discovery of a taxpayer having

multiple TINs;

4. Dissolution, merger or consolidation

of juridical persons.

Penalty Provisions related to Primary Registration

1. Failure to register

2. Late registration

3. Late payment of ARF

4. Failure to register a branch or facility

5. Acquisition of multiple TINs

6. Failure to and/or erroneous supply of

information

REGISTRATION FORMS

1901 SELF-EMPLOYED/PROFESSIONALS/TRUST

1902 Employees 1903 CORPORATIONS / GOCC /PARTNERSHIP

1903 GOVERNMENT AGENCIES / LGUs

WHEN: ON OR BEFORE COMMENCEMENT OF BUSINESS/ BEFORE PAYMENT OF ANY

TAX DUE/

UPON FILING A RETURN

10 DAYS AFTER BECOMING AN EMPLOYER

( SEC 2.83.6 Rev. Regulations No. 2-98)

WHERE: RDO

BOOKKEEPING REQUIREMENTS

ON BOOKKEEPING REQUIREMENTS

Apply for registration of books of accounts, basically a Journal, Ledger, and applicable subsidiary books

The BIR records your latest volume in our registration database.

All of the above to be done within 30 days from date of registration

ON BOOKKEEPING REQUIREMENTS

Transactions for the day must be entered in books on or before 12nn the following day. Balances transferred to the Ledger on day following the end of month

It’s not required to register new set of books every year; only before the pages of current book is almost used up (RMC 82-2008).

Registration of Books Persons required to pay internal

revenue taxes shall keep and maintain the following books of accounts. General Journal General Ledger Subsidiary Sales Register Books to be Kept by

Professionals (RR 7-87)

Register Books to be Kept by Professionals (RR 7-87)

In addition to the books and other records, professionals shall keep and maintain Register Book which shall be entered immediately upon acceptance of client of patient

Register Books to be Kept by Professionals (RR 7-87)

Required information: Name and address of client or patient Date and time of arrival Amount of Professional Fee or other considerations

received Number and date of the receipt issued covering

the said payment

Books of Accounts

TP whose quarterly gross sales/receipts exceed P150,000 shall have their books audited and examined yearly by independent CPA.

Deadline for Registration

For new registrants -Before commencement of business

Preservation of Books and Records(RR 17-2013)

Taxpayers are required to preserve their books of accounts, including subsidiary books and other accounting records 10 years reckoned from the day the following the

deadline in filing a return If filed after the deadline

Reckoned from the date of filing of the return, for the taxable year when the last entry was made in the books of accounts

Retention Period

If the taxpayer has any pending protest or claim for tax credit/refund of taxes until the case is finally resolved.

The taxpayer and the CPA have equal responsibility to maintain and preserve the records for a period of ten years

Retention Period

Other accounting records includes Invoices, receipts Vouchers Returns and Other source documents supporting the entries

Examination and Inspection

Records shall be kept at all times at the place of business of the TP

Upon the demand, the same must be immediately produced and submitted for inspection Regular audit Extra-ordinary audit

for exchange of information by a foreign tax authority

Examinations shall be done in the taxpayer’s office or place of business or in the Office of the BIR

INVOICING REQUIREMENTS

INVOICING REQUIREMENTS

All persons subject to internal revenue tax shall:

For each sale of P25 or more; Issue duly registered receipts or sales or commercial

invoices; Prepared at least in duplicate.

Invoicing Requirements (Sec. 237)

Required information: Date of transaction Quantity Unit Cost Description of merchandise or nature of the

service TIN of purchaser if VAT-registered

Invoicing Requirements (Sec. 237)

Required information:

Name, business style and address of the purchaser shall be indicated in the ff. cases –

Seller and buyer are VAT-subject persons; Receipt covers rentals, commission, compensation or

fees.

Invoicing Requirements (Sec. 237)

Disposition of the receipts/invoices Original -> purchaser Duplicate -> retained by issuer

Proper Invoicing and Receipting of Output Tax RR 18-2011

• Reiterates Sec. 237 of the Tax Code that VAT-registered taxpayers should separately bill the VAT.

• The amount shall be shown as a separate item in the invoice or receipt

Principal Receipt/Invoice(RR 18-2012)

A written account evidencing the sale of goods and/or services issued to customers in an ordinary course of business

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Sale of Goods and Properties(Includes Cash Sales Invoice and Charge Sales Invoice)

VAT Sales Invoice Basis of the output tax liability of the seller and the

input tax claim of the buyer Includes Cash Sales Invoices & Charge Sales Invoices

Non-Vat Sales Invoices Basis of the Percentage Tax liability of the seller

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Sale of Service and Leasing of Properties

VAT Official Receipt Basis of the output tax liability of the seller

and the input tax claim of the buyer

Non-Vat Official Receipts Basis of the Percentage Tax liability of the seller

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Supplementary Receipts/Invoices

Also known as Commercial Invoices Documents evidencing delivery, agreement to

sell or transfer of goods and services Delivery Receipts Order Slips Debit and/or Credit Memo Purchase Order

46

Supplementary Receipts/Invoices

Job Order Provisional/Temporary Receipt Acknowledgement Receipt Collection Receipt Cash Receipt Bill of Lading Billing Statement Statement of Account

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Supplementary Receipts/Invoices

Includes any other documents, by whatever name it is known or called

whether prepared manually or pre-printed/pre-numbered loose-leaf or computerized, issued to customers

Not valid to support the claim of Input Taxes by buyers of goods and/or services

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Salient Features

One application shall be filed for ATP per establishment (HO or branch)

Filed with RDO/LT Office where the HO is registered

Each application shall be issued a separate ATP

Independent series of serial number for all receipts/invoices (principal & supplementary)

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Salient Features

The approved ATP shall be valid only upon full usage or five (5) years from issuance of the same, whichever

comes first.

The replicate copy of the ATP issued shall be printed at the inside back portion of the cardboard cover

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Salient Features

ONLY BIR ACCREDITED PRINTERS shall have the exclusive authority to print principal and supplementary receipts/invoices.

Reiterated under RMC 61-2013 Issuing receipts/invoices printed by non-

accredited printers is tantamount to issuing invalid receipts/invoices 51

Transitory Provision

Expiring ATP for invoices/receipts (principal and supplementary) shall apply for a new ATP not later than 60 days prior to actual expiry date

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Validity of Unused/Unissued Commercial Invoices

RR 18-2012(AMENDED)

RMC 44-2013

(AMENDED)

RMC 52-2013

Those printed prior to Jan. 18, 2013 shall be valid until

June 30, 2013 Aug. 30, 2013

Receipts with ATP prior to Jan. 1, 2011 shall be valid until

Aug. 30, 2013

Receipts with ATP dated Jan. 1, 2011 to Jan. 17, 2013 shall be valid until(provided that new ATP was issued on or before Aug. 30, 2013)

Oct. 31, 2013

Transitory Provision

Deadline for filing an ATP to replace receipts / invoices printed prior to Jan.

18, 2013 shall be maintained as of April 30, 2013

Application for new ATP filed after April 30, 2013 is deemed to have been filed out of time and subject to a penalty of P1,000.00 After Oct 31, 2013 – P50,000.00 per memo od

CIR dated April 30, 201354

Transitory Provision

Unused/unissued receipts/invoices shall be surrendered to the RDO where the taxpayer is registered

Submit inventory listing of unused invoices/receipts.

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Transitory Provision

Issuance of receipts/invoices after its validity constitute a violation of Sec. 264 of the NIRC of 1997

It is considered as if no receipt/invoice was issued

Transitory Provision

No deduction from gross income shall be allowed using these invoices/receipts as they are not valid proof of substantiation

In case of VAT-registered persons, no input tax may be claimed using these receipts/invoices

On issuance of tax clearance(RMC 52-2013)

To fully implement the requirements under RR 18-2012, a certified true copy of the ATP shall be included as attachment

No ATP shall be a ground for non-issuance of tax clearance for whatever purposes

Salient Features

A list of all duly-accredited printers per RDO is posted and regularly updated at the BIR website (www.bir.gov.ph)

Validity of Provisional Accreditation granted to printers is extended from Aug. 14, 2013 to Dec. 31, 2013. (RMC 54-2013)

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On Compromise PenaltiesRR 56-2000

Common Omissions Applicable Penalties

in the issuance of receipts 1st Offense 2nd Offense

Failure to issue receipts P 10,000 P 20,000

Refusal to issue receipts 25,000 50,000

Issuance of receipts that do not truly 1,000 2,500

reflect/contain all the info. required therein Duplicate copy is blank 10,000 20,000Possession or use of unregistered invoice 10,000 20,000Receipts not bearing any of the ff: consecutive no., name of taxpayer, business style, business address, TIN, Name, address, date, authority no. of printer 5,000 10,000

The end