How to Comply with Summary Lists of Sales and Purchases

Summary List of Purchases (SLP) and Summary List of Sales (SLS) submission has long been prescribed under Revenue Regulations No. 7-95 and was adopted by Revenue Regulations No. 16-2005 – The Consolidated VAT Regulations (RR 16-05), as amended, for VAT-registered taxpayers under the following parameters:

1. Summary List of Sales for VAT taxpayers with sales exceeding P2.5M in any one quarter containing the details of regular buyers/customers of any amount and casual buyers/customers with individual sales of P100,00.00; and
2. Summary List of Sales for VAT taxpayers with purchases of exceeding P1.5M in any one quarter with the details of regular suppliers of any amount and casual supplier with individual purchases P100,00.00; and,
3. Filing the prescribed electronic device with the BIR not later than the 25th day of the month following he end of the quarter, or 3oth day for Large Taxpayers.

For the purpose, an electronic facility called a RELIEF (downloadable from the BIR website)has been devised by the BIR and prescribed to be used in encoding the required details from the official receipts and sales invoices.

Consequences of Failure to Comply

Failure to submit the required SLS and SLP is punishable as follows:

1. P1,000 for each invoice or official receipt but not to exceed P25,000 during the taxable year;
2. Payment of the administrative penalty does not excuse the taxpayers from the submission;
3. Sub Poena Duces Tecum (STD) may be issued to compel the taxpayer to submit the same and failure to obey the STD is subject to criminal prosecution of authorized company officers; and,
4. Willful neglect to submit is a ground for criminal prosecution and the authorized corporate officers will be prosecuted;

In sum, if you do not comply, then you will be sanctioned up to the maximum of P25,000.00 a year of administrative penalty or worst, you could go to jail for the same. On top of it, you will still be required to comply because payment of penalty will not excuse you from non-compliance.

How the BIR uses the SLS and SLP

Data generated from this SLS and SLP is used by the BIR in matching of sales and purchases from among the taxpayers so the same has been a source of numerous tax assessments and deficiency internal revenue taxes. Declared sales by the seller not declared as purchases by the buyer, and vice versa is the common ground for alleged under declaration. However, with the selected taxpayers, the P2.5M and P1.5M threshold, the matching becomes deficient so many taxpayers could simply get away.

The New SLS and SLP Mandate

Looking at the loophole, Revenue Regulations No. 1-2012 was issued by the BIR to finally make the SLP and SLS a MANDATORY submission among ALL VAT-REGISTERED taxpayers regardless of the amount of the transaction. Same penalties were imposed for non-compliance therewith and hereunder are the required details:

Summary List of Sales (SLS)

1. Input of required details on the quarterly Summary List of Sales with the following:
   1. BIR Registered name of buyer;
   2. T.I.N. of buyer;
   3. Nature of sales – Vatable, Exempt, Zero-rated and those subject to Final VAT;
   4. Amount of sales
   5. VAT amount on sales

Summary list of local purchases

1. BIR registered name of supplier
2. T.I.N. of seller
3. Nature of purchase – Vatable, Exempt, Zero-rated and those subject to Final VAT;
4. Amount of sale
5. Creditable input VAT
6. Non-creditable input-VAT

Summary list of importation

1.  Import entry declaration number;
2. Assessment/release date;
3. Date of importation;
4. Name of seller;
5. Country of origin;
6. Dutiable value;
7. All charges before release from BoC custody;
8. Landed cost – exempt/taxable
9. VAT paid;
10. Official Receipt number of VAT payment;
11. Date of VAT payment;

Reports to be submitted shall be system generated with totals and in alphabetical arrangement of name of suppliers/buyers in prescribed format.

How to Comply

The above mandate does not seem to require much. After downloading the program from the BIR website, the same will be installed in your computer and you could easily input the above required details in the corresponding fields provided. Submission is likewise quarterly, not later than the 25th day after the end of the quarter so so much time is available to comply.Please note that BIR is now becoming more sophisticated and more aggressive in imposing the mandates of the tax rules and regulations. It may just be a matter of time that those who do not comply will later be dealt with.

An invoice or receipt may take an average of one (1) minute to encode. We suggest that you do the encoding more frequent, e.g. daily or weekly, so they will not pile up and became hard for you to handle. If you have such volume of invoices and receipts, you may opt to hire a staff or encoder for the purpose. As an employee, you will have to pay the basic minimum wage and all other benefits mandated by law. Alternatively, if you would see it more beneficial, then, you can consider outsourcing the encoding. They could be more familiar with the details and in line with their work, they could do more efficient and accurate in the encoding and generation of reports.

Finally, compliance of summary list of sales and summary list of purchases does not do away with proper substantiation. Please bear in mind that the BIR registered VAT official receipts and invoices being encoded must still contain the prescribed information ,e.g. exact name of the business entity, address, tax identification number, and the details of sales and VAT.Even if you submit the SLS and SLP reports, the claim of input VAT on improper substantiation will still be disallowed and you will be required to pay the penalties – the basic amount, 25% surcharge, 20% interest, and the compromise penalty ranging from P200 to P50,000 depending on the basic amount.

References:

Revenue Regulations No. 16-2005, as amended by Revenue Regulations No. 1-2012;

Revenue Regulations No. 7-95

Disclaimer: This article is for general conceptual guidance only and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances. For comments, you may also please send mail at info(@)taxacctgcenter.ph, or you may post a question at Tax and Accounting Center Forum and participate therein.

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