Most taxpayers are familiar with two types of books or accounting records — those that are prepared manually, and those that are generated by a computerized system. Some may not be aware that there is also another type referred to as loose-leaf records. In simple terms, these are a computer-aided form of manual recording. They involve the recording of transactions through encoding of details into a computer and generating copies by printing them out using an approved loose-leaf format to be bound as the bookkeeping record of the taxpayer. Similar to manual or computerized books and accounting records, the loose-leaf type needs to be registered with the Bureau of Internal Revenue (BIR).
The BIR has observed that when the venue for filing applications for Permit to Use (PTU) Computerized Books of Accounts/Computerized Accounting Systems and Accreditation of Cash Register Machines, Point of Sales and other Receipting Software was transferred to the National Accreditation Board (NAB) at the BIR National Office, the relocation caused confusion as to whether the applications for PTU Loose-leaf Books of Accounts/Invoices/Receipts and other Accounting Records should likewise be filed with the NAB.
The venue and the procedures for the issuance of PTU loose-leaf documents has long been provided under Revenue Memorandum Circular (RMC) 13-82. Under the Circular, all such requests shall be filed with the office of either the Revenue District Officer or Regional Director. The RMC further mandated that the request shall be forwarded to the field personnel of the Revenue District Office (RDO) having jurisdiction over the taxpayer for appropriate investigation.
The applications for such permits are approved by the Regional Director through the Legal Division and the RDO then records the approved PTU for compliance with the taxpayer’s secondary registration. Thus, the processing of the PTU takes a number of days considering the geographical location of these two BIR offices which in some cases could be very far from each other.
In line with the government’s promise to ensure ease of doing business, the BIR issued RMC 68-2017 dated Aug. 10, declaring that the processing of said PTU shall now be done at the RDO where the principal place of business of the taxpayer is registered.
RMC 68-2017 stressed that the documentary requirements for applying for a PTU covering loose-leaf books of account and other accounting records remain the same. The guidelines require a duly accomplished Application for PTU Manual Loose-leaf/Computerized Books of Account/Official Receipts or Sales Invoices (BIR Form 1900). In addition, the following documents must be submitted: (1) company profile documents (photocopies of the BIR Certificate of Registration and BIR Form 0605 proving payment of the Annual Registration Fee for the current year; (2) location map of the business office; (3) inventory of previously approved unused invoices and receipts, if applicable; and (4) sample format of journals and ledgers (for loose-leaf books of account) and/or particular accounting record (for loose-leaf accounting records).
However, under the new RMC, the investigation previously required to be conducted by the BIR after the filing of the PTU application has been replaced with the submission of a Sworn Statement declaring the books, invoices/receipts and other accounting records to be used, together with the serial numbers of principal and supplementary invoices/receipts. The PTU applicant must also state in the Sworn Statement a commitment to permanently bind loose-leaf forms within 15 days after the end of each taxable year or upon termination of its use.
What about those corporations with registered branches? RMC 68-2017 states that the duly approved PTU issued to the taxpayer’s Head Office shall also cover all identified registered branches and shall be valid in their respective RDOs at the time of the issuance of the PTU. A certified true copy of the PTU must be furnished to each branch authorized to use the approved loose-leaf records. The PTU shall be updated in case additional branches are set up subsequent to the issuance of the permit.
It may be noted that under Revenue Regulations 7-2012 (i.e. the amended regulations on primary registration, updates and cancellation), the RDO is mandated to process and issue simultaneously the Certificate of Registration (COR), and Authority to Print (ATP), as well as to register the books of account of taxpayers immediately after registration and upon submission of complete required documents within the time prescribed by the BIR Citizen’s Charter. The BIR must ensure that the COR, ATP and books of account are issued and registered, respectively, upon commencement of the taxpayer’s business.
The simultaneous business registration process was reiterated by the BIR in RMC 43-2016 which provides that the application for ATP, registration of manual books and issuance of the COR can be simultaneously done in one day or eight working hours in line with the government’s aim to ease doing business in the Philippines.
RMC 68-2017 is yet another positive step towards easing business in the Philippines. It is good that the BIR is coming up with simpler rules for those who wish to comply. After all, taxation is coercive in nature and taxpayers have the onerous duty to contribute to the national coffers for public expenditures. The least that the state can do is to use taxpayers’ money efficiently so that the greatest benefit is gained by the people and to collect taxes with optimum ease on the paying public. Taxpayers are the clients of the BIR, and every customer deserves to be treated like a king.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.
Elizabeth K. Adaoag-Belarmino is a Senior Consultant at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.
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