On 13 June 2024, the BIR released Revenue Regulations (RR) No. 11-2024, which amends the transitory provisions of RR No. 7-2024 and extends the statutory deadlines for compliance with the new Invoicing requirements under the Ease of Paying Taxes (EOPT) Act. RR No. 7-2024 became a key regulation in implementing the guidelines of EOPT as it served as a framework for taxpayers to follow to comply with the new Invoicing requirements. While the implementation of EOPT may be challenging, the BIR remains dauntless and patient in addressing the concerns of the taxpayer by releasing timely regulations to allay any confusion or fears.
Changes in the guidelines for Unused Official Receipts under RR No. 7-2024
One of the major changes is under paragraph 2.2 of Sec. 8 of RR No. 7-2024, where taxpayers are allowed not only to convert Official Receipts as Invoice but are also allowed to convert Billing Statements/Statement of Account/Statement of Charges into Billing Invoice. In RR No. 7-2024, taxpayers are only allowed to use these converted Invoices or Billing Invoices up until 31 December 2024 only. This was changed in RR No. 11-2024, where taxpayers may now use the same until it is fully consumed. The additional requirement, however, is that these converted Invoices or Billing Invoices must contain the required information under Sec. 6(B) of RR No. 7-2024, including the quantity, unit cost, and description or nature of the service. If the required information is not readily available in the converted Invoice or Billing Invoice, these may be stamped to comply with these requirements.
Adding to the change brought forth by RR No. 11-2024 in paragraph 2.2 of Sec. 8 of RR No. 7-2024 as mentioned above, the converted Invoices or Billing Invoice may be considered valid for claiming input tax and proof of both sales transactions and payments of the same time from 27 April 2024, until they are fully consumed, provided that there is no missing information as enumerated under Sec. 3(D)(3) of RR No. 7-2024. Any manual or looseleaf “Official Receipt” issued without a stamped “Invoice” will be considered supplementary documents and ineligible for input tax claims.
The stamping of converted Invoices or Billing Invoices does not require approval from the Revenue District Offices/Large Tax Offices/Large Tax Divisions. Taxpayers are reminded that they should still obtain newly printed invoices with an Authorized to Print (ATP) before fully consuming the converted Invoice or Billing Invoice.
Taxpayers are still required to report through submitting an inventory of unused Official Receipts/Billing Statement/Statement of Account/Statement of Charges indicating the number of booklets and corresponding serial numbers on or before 31 July 2024.
Changes affecting Cash Register Machines (CRM) and Point-of-Sales (POS) Machines and E-receipting or Electronic Invoicing Software
For taxpayers looking to reconfigure their Computerized Accounting System (CAS)/Computerized Books of Accounts (CBA) with Accounting Records (AR), the BIR extended the deadline for its compliance from 30 June 2024 to 31 December 2024. This may be extended for a further six (6) months from 31 December 2024, subject to approval from the concerned Regional Director or Assistant Commissioner of the Large Taxpayers Service. To recall, the BIR treated the modification of CAS/CBA with AR to comply with EOPT as a major enhancement as it would have a direct effect on the financial aspects.
The BIR also acknowledges and recognizes the challenge of modifying the documents issued by Cash Register Machines (CRM)/Point-Of-Sale (POS) machines, e-receipting or electronic invoicing software, CAS/CBA with AR, by allowing the use of the invoices bearing the word “Official Receipt” from 27 April 2024 until the completion of machine/system reconfiguration/enhancement. These invoices issued while the software is being reconfigured may be considered as valid for claiming of input tax by the buyer or purchaser until 31 December 2024 or until the completion of machine/system reconfiguration/enhancement, whichever comes first. The BIR added a requirement that the use of these mentioned invoices should have complete information as required under Section 3(D)(3) of RR No. 7-2024.
For CRM/POS Machines, e-receipting or electronic invoicing software, the change of the word “Official Receipt” to “Invoice,” “Cash Invoice,” “Charge Invoice,” “Credit Invoice,” “Billing Invoice,” or any name describing the transaction, the change is still treated as a minor change or enhancement without requiring the need to inform such change with the Revenue District Office(s) having jurisdiction over the place of business of such sales machines.
Revised Penal provisions for the Transitory Provisions of RR No. 7-2024
However, after 31 December 2024 or once the machine/system reconfiguration/enhancement has been completed, the issued invoices will not be considered as evidence of sales of goods or services and is tantamount to failure to issue or non-issuance of invoices. The same is true for the issuance of manual/loose-leaf “Official Receipts” without converting them to “Invoices” for the sale of goods or services starting 27 April 2024.
To recall, the penalty mentioned by the BIR is the penalty of not less than One Thousand Pesos (PHP1,000.00) but not more than Fifty Thousand Pesos (PHP50,000.00) and imprisonment of not less than two (2) years but not more than four (4) years pursuant to Sec. 264(a) of the Tax Code.
Continued collaboration of the BIR with the public
With these changes brought forth by RR No. 11-2024, the BIR hopefully answered the concerns of the taxpayers in the recent regulations for EOPT. The BIR’s efforts in reaching out to taxpayers should be commended. From holding town halls, lecture series, and the like not only for tax practitioners but for taxpayers as well, to issuing multiple regulations to address any questions from the public, the BIR has been working tirelessly hand-in-hand to deliver the future envisioned by the EOPT Act, which is “to provide a healthy environment for the tax paying public that protects and safeguards taxpayer rights and welfare, as well as assures the fair treatment of taxpayers.”
Let's Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.
As published in BusinessWorld, dated 18 June 2024
