Bookkeeping Invoicing and Registration Requirements Presented by 1

Bookkeeping, Invoicing and Registration Requirements Presented by: 1 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 business On or before commencement of business Before payment of any tax due Upon filing of a return, statement or declaration as required by the NIRC. Register your employee/s within 10 days from date of employment

On Registration Secure Taxpayer Identification Number Multiple TIN is punishable by law.

Registration Procedures 7 PRIMARY REGISTRATION STAGE 1 Application & Issuance of TIN SECONDARY REGISTRATION STAGE 2 Registration of Business/Practice of Profession/Employment Registration of books, Issuance of ATP, CAS and Loose-leaf

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 P 500. 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: P 1, 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 Type Income Tax VAT Percentage Tax W/Tax - Compensation Creditable W/Tax at Source Final W/tax Documentary Stamp Tax Excise Tax Annual Registration Fee Head Office (HO) Only (Consolidated) HO or Branch at TP’s Option Both HO and Branch

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 P 1, 919, 500.

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 VATexempt 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 P 1, 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 P 10 M. 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. 2. 3. 4. 5. 6. Failure to register Late registration Late payment of ARF Failure to register a branch or facility Acquisition of multiple TINs 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 12 nn 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 P 150, 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 P 25 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 43

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 44

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 45

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 of Account 47

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 48

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) 49

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 50

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 52

Validity of Unused/Unissued Commercial Invoices Those printed prior to Jan. 18, 2013 shall be valid until Receipts with ATP prior to Jan. 1, 2011 shall be valid until 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) RR 18 -2012 (AMENDED) RMC 442013 (AMENDED) June 30, 2013 Aug. 30, 2013 RMC 522013 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 P 1, 000. 00 After Oct 31, 2013 – P 50, 000. 00 per memo od CIR dated April 30, 2013 54

Transitory Provision Unused/unissued receipts/invoices shall be surrendered to the RDO where the taxpayer is registered Submit inventory listing of unused invoices/receipts. 56

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 542013) 60

On Compromise Penalties RR 56 -2000 Common Omissions in the issuance of receipts Applicable Penalties 1 st Offense 2 nd 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, 000 Possession or use of unregistered invoice 10, 000 20, 000 Receipts 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