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Exporters, e-commerce sellers need to comply with BIR’s e-invoicing

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Taxpayers engaged in exports and e-commerce should start this early in preparing to comply with electronic invoicing requirements as the Bureau of Internal Revenue (BIR) broadens the coverage of its electronic invoicing system (EIS) implementation, according to a tax expert.

Lawyer Rule Oporto, senior director for business tax services at SGV & Co., said that after launching the pilot EIS implementation among 100 large taxpayers in July 2022, the agency is now poised to roll out the project to all other covered taxpayers.

The BIR has identified an additional 100 taxpayers for this year’s rollout, which will cover not just the large taxpayers but also those engaged in the export of goods and services and those engaged in e-commerce.

Moreover, the agency has identified an additional 500 taxpayers for inclusion in the pilot by the fourth quarter, said Oporto in a recent webinar conducted by the American Chamber of Commerce of the Philippines.

The EIS is an electronic platform developed by the BIR with the capability to receive, process and store data from taxpayers.

The legal basis for EIS implementation are Section 237 (issuance of receipts or sales or commercial invoices) and Section 237-A (electronic sales reporting system) of the Tax Reform for Acceleration and Inclusion Law or Republic Act No. 10963. 

In view of this, BIR issued last year Revenue Regulations (RR) No. 8-2022 on the policies and guidelines for the use of EIS and RR 9-2022 on the admissibility of sales documents in electronic format.

But the RRs are “not that very exhaustive. There are still questions that remain unanswered,” commented Oporto.

She said the agency will be issuing revenue memorandum circulars (RMCs) to clarify RR 8-2022 and provide guidelines to covered taxpayers on EIS implementation.

“[BIR] committed to issue RMCs but as to when we are still not sure. It’s a moving target so we just have to wait…,” Oporto continued.

RR 8-2022 states that taxpayers mandated to comply with e-invoicing are the following: those engaged in the export of goods and services, those engaged in e-commerce, and large taxpayers.

Taxpayers not mandated to issue e-receipts/e-invoices and/or transmit sales data to the EIS may continue to use manual receipts/invoices or issue computerized accounting system (CAS) or point-of-sales (POS)-generated receipts/invoices based on existing revenue issuances, said Oporto.

However, taxpayers who opt to issue e-receipts or e-invoices and transmit sales data to the EIS may comply with the provisions of these regulations, she continued.

Under RR 8-2022, covered taxpayers are mandated to do these:

•    Register complete CAS that is capable of generating e-receipts/invoices such as full CAS and CRM/POS system
•    Develop their own sales data transmission system or application programming interface (API)
•    Apply for certification of the API, and upon approval, an EIS CERT will be issued
•    Apply for a Permit to Transmit (PTT) to allow the transmission of sales data to the EIS
•    Issue e-receipts/e-invoices to their customers or buyers in lieu of manual receipts or invoices
•    Transmit sales data through API to EIS in Java Script Object Notation file format

Opporto clarified that what should be transmitted to the EIS are the sales data and not the source documents.

According to the guidelines issued to the pilot taxpayers, sales data required for transmittal include document number, issuance date, unique ID number, seller information, buyer information, details of items/nature of service sold, sales amount, value added tax, discounts, correction code/reasons, withholding tax, and other taxable/non-taxable revenue, she further said.

Source documents of the sales data include sales invoices, official receipts, service billings, debit memo/debit note, credit memo/credit note, and other adjustment documents.

BIR also prescribes that sales reporting must start the day after the PTT is issued, and that transmission must be done in real time or near real time, which is within three calendar days from transaction date.

Taxpayers face penalties for late or no transmission of sales data. For each day of violation, the penalty is one-tenth of 1% of the annual net income for the second year preceding or P10,000, whichever is higher. If the days of violation exceed 180 days, the penalty is permanent closure.

“As early as now, if you are covered [among] those three taxpayers, you should start preparing to comply with the EIS, including the API development,” advises Oporto.

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