Title IX, Chapter II – Administrative Provisions

SEC. 236.         Registration Requirements. –

(A)       Requirements. – Every person subject to any internal revenue tax shall register once with the appropriate Revenue District Officer:

• (1)        Within ten (10) days from date of employment, or
• (2)        On or before the commencement of business, or
• (3)        Before payment of any tax due, or
• (4)        Upon filing of a return, statement or declaration as required in this Code.

The registration shall contain the taxpayer’s name, style, place of residence, business and such other information as may be required by the Commissioner in the form prescribed therefor: Provided, That the Commissioner shall simplify the business registration and tax compliance requirements of self-employed individuals and/or professionals.

A person maintaining a head office, branch or facility shall register with the Revenue District Officer having jurisdiction over the head office, branch or facility. For purposes of this Section, the term ‘facility’ may include but not limited to sales outlets, places of production, warehouses or storage places. (As amended by RA No. 10963 (December 19, 2017)).

(B)       Annual Registration Fee. – An annual registration fee in the amount of Five hundred pesos (P500) for every separate or distinct establishment or place of business, including facility types where sales transactions occur, shall be paid upon registration and every year thereafter on or before the last day of January: Provided, however, That cooperatives, individuals earning purely compensation income, whether locally or abroad and overseas workers are not liable to the registration fee herein imposed

The registration fee shall be paid to an authorized agent bank located within the revenue district, or to the Revenue Collection Officer, or duly authorized Treasurer of the city or municipality where each place of business or branch is registered.

(C)       Registration of Each Type of Internal Revenue Tax. – Every person who is required to register with the Bureau of Internal Revenue under Subsection (A) hereof, shall register each type of internal revenue tax for which he is obligated, shall file a return and shall pay such taxes, and shall update such registration of any changes in accordance with Subsection (E) hereof.

(D)       Transfer of Registration. – In case a registered person decides to transfer his place of business or his head office or branches, it shall be his duty to update his registration status by filing an application for registration information update in the form prescribed therefor.

(E)        Other Updates. – Any person registered in accordance with this Section shall, whenever applicable, update his registration information with the Revenue District Office where he is registered, specifying therein any change in tax type and other taxpayer details.

(F)        Cancellation of Registration. –

(1)        General Rule. – The registration of any person who ceases to be liable to a tax type shall be cancelled upon filing with the Revenue District Office where he is registered, an applicable for registration information update in a form prescribed therefor;

(2)        Cancellation of Value-added Tax registration. – A VAT-registered person may cancel his registration for VAT if:

• (a)        He makes written application and can demonstrate to the Commissioner’s satisfaction that his gross sales or receipts for the following twelve (12) months, other than those that are exempt under Section 109(A) to (U), will not exceed One million five hundred thousand pesos (P1,500,000), or
• (b)       He has ceased to carry on his trade or business, and does not expect to recommence any trade or business within the next twelve (12) months.

The cancellation of registration will be effective from the first day of the following month.

(G)       Persons Required to Register for Value-Added tax. –

(1)        Any person who, in the course of trade or business, sells, barters or exchanges goods or properties, or engages in the sale or exchange of services, shall be liable to register for value-added tax if:

• (a)        His gross sales or receipts for the past twelve (12) months, other than those that are exempt under Section 109(A) to (BB), have exceeded Three million pesos (P3,000,000); or (As amended by RA No. 9337, May 24, 2005), RA No. 10378 (March 7, 2013), RA No. 10963 (December 19, 2017)).
• (b)       There are reasonable grounds to believe that his gross sales or receipts for the next twelve (12) months, other than those that are exempt under Section 109(A) to (BB), will exceed Three million pesos (P3,000,000). (As amended by RA No. 9337, May 24, 2005), RA No. 10378 (March 7, 2013), RA No. 10963 (December 19, 2017)).

(2)        Every person who becomes liable to be registered under paragraph (1) of this Subsection shall register with the Revenue District Office which has jurisdiction over the head office or branch of that person, and shall pay the annual registration fee prescribed in Subsection (B) hereof. If he fails to register, he shall be liable to pay the tax under Title IV as if he were a VAT-registered person, but without the benefit of input tax credits for the period in which he was not properly registered.

(H)       Optional Registration for Value-Added Tax of Exempt Person. – (1) Any person who is not required to register for value-added tax under Subsection (G) hereof may elect to register for value-added tax by registering with the Revenue District Office that has jurisdiction over the head office of that person, and paying the annual registration fee in Subsection (B) hereof.

(2)        Any person who elects to register under this Subsection shall not be entitled to cancel his registration under Subsection (F)(2) for the next three (3) years.

Provided, That any person taxed under Section 24(A)(2)(b) and 24(A)(2)(c)(2)(a) of the NIRC who  elected to pay the eight percent (8%) tax on gross sales or receipts shall not be allowed to avail of this option.

For purposes of Title IV of this Code, any person who has registered value-added tax as a tax type in accordance with the provisions of Subsection (C) hereof shall be referred to as a ‘VAT-registered person’ who shall be assigned only one Taxpayer Identification Number (TIN). (As amended by RA No. 10963 (December 19, 2017)).

(I)         Supplying of Taxpayer Identification Number (TIN). – Any person required under the authority of this Code to make, render of file a return, statement or other document shall be supplied with or assigned a Taxpayer Identification Number (TIN) which he shall indicate in such return, statement or document filed with the Bureau of Internal revenue for his proper identification for tax purposes, and which he shall indicate in certain documents, such as, but not limited to, the following:

• (1)        Sugar quedans, refined sugar release order or similar instruments;
• (2)        Domestic bills of lading;
• (3)        Documents to be registered with the Register of Deeds or Assessor’s Office;
• (4)        Registration certificate of transportation equipment by land, sea or air;
• (5)        Documents to be registered with the Securities and Exchange Commission;
• (6)        Building construction permits;
• (7)        Application for loan with banks, financial institutions, or other financial intermediaries;
• (8)        Application for mayor’s permit;
• (9)        Application for business license with the Department of Trade and Industry; and
• (10)      Such other documents which may hereafter be required under rules and regulations to be promulgated by the Secretary of Finance, upon recommendation of the Commissioner.

In cases where a registered taxpayer dies, the administrator or executor shall register the estate of the decedent in accordance with Subsection (A) hereof and a new Taxpayer Identification Number (TIN) shall be supplied in accordance with the provisions of this Section.

In the case of a nonresident decedent, the executor or administrator of the estate shall register the estate with the Revenue District Office where he is registered: Provided, however, That in case such executor or administrator is not registered of the estate shall be made and the  Taxpayer Identification Number (TIN) supplied by the Revenue District Office having jurisdiction over his legal residence.

Only one Taxpayer Identification Number (TIN) shall be assigned to a taxpayer. Any person who shall secure more than one Taxpayer Identification Number shall be criminally liable under the provisions of Section 275 on ‘Violation of Other Provisions of this Code or Regulations in General. (As amended by RA No. 9337, May 24, 2005)).

SEC. 237.         Issuance of Receipts or Sales or Commercial Invoices

(A)       Issuance. – All persons subject to an internal revenue tax shall, at the point of each sale and transfer of merchandise or for services rendered value at One hundred pesos (P100) or more, issue duly registered receipts or sale or commercial invoices, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: Provided, however, That where the receipt is issued to cover payment made as rentals, commissions, compensation or fees, receipts or invoices shall be issued which shall show the name, business style, if any, and address of the purchaser, customer or client: Provided, further, That where the purchaser is a VAT-registered person, in addition to the information herein required, the invoice or receipt shall further show the Taxpayer identification Number (TIN) of the purchaser.

Within five (5) years from the effectivity of this Act and upon the establishment of a system capable of storing and processing the required data, the Bureau shall require taxpayers engaged in the export of goods and services, taxpayers engaged in e-commerce, and taxpayers under the jurisdiction of the Large Taxpayers Service to issue electronic receipts or sales or commercial invoices in lieu of manual receipts or sales or commercial invoices, subject to rules and regulations to be issued by the Secretary of Finance upon recommendation of the Commissioner and after a public hearing shall have been held for this purpose: Provided, That taxpayers not covered by the mandate of this provision may issue electronic receipts or, sales or commercial invoices, in lieu of manual receipts, and sales and commercial invoices.

The original of each receipt or invoice shall be issued to the purchaser, customer or client at the time the transaction is effected, who, if engaged in business or in the exercise of profession, shall keep and preserve the same in his place of business for a period of three (3) years from the close of the taxable year in which such invoice or receipt was issued, while the duplicate shall be kept and preserved by the issuer, also in his place of business, for a like period: Provided, That in case of electronic receipts or sales or commercial invoices, the digital records of the same shall be kept by the purchaser, customer or client and the issuer for the same period above stated.

The Commissioner may, in meritorious cases, exempt any person subject to internal revenue tax from compliance with the provisions of this section. (As amended by RA No. 9337 (May 24, 2005), RA No. 10963 (December 19, 2017)).

SEC. 237-A.     Electronic Sales Reporting System. – Within five (5) years from the effectivity of this Act upon the establishment of a system capable of storing and processing the required data, the  Bureau shall require taxpayers engaged in the export of goods and services, and taxpayers under the jurisdiction of the Large taxpayers Service to electronically report their sales data to the Bureau through the use of electronic point of sales systems, subject to the rules and regulations to be issued by the Secretary of Finance as recommended by the Commissioner of Internal Revenue: Provided, That the machines, fiscal devices, and fiscal memory devices shall be at the expense of the taxpayers.

The data processing of sales and purchase data shall comply with the provisions of Republic Act No. 10173, otherwise known as the “Data Privacy Act” and Section 270 of the NIRC, as amended, on unlawful divulgence of taxpayer information and such other laws relating to the confidentiality of information.

The Bureau shall also establish policies, risk management approaches, actions, trainings, and technologies to protect the cyber environment, organization, and data in compliance with Republic Act No. 10175 or the “Cybercrime Prevention Act of 2012. (As amended by RA No. 10963 (December 19, 2017)).

SECTION 238.  Printing of Receipts or Sales or Commercial Invoices. – All persons who are engaged in business shall secure from the Bureau of Internal Revenue an authority to print receipts or sales or commercial invoices before a printer can print the same.

No authority to print receipts or sales commercial invoices shall be granted unless the receipts or invoices to be printed are serially numbered and shall show, among other things, the name, business style, Taxpayer Identification Number (TIN) and business address of the person or entity to use the same, and such other information that may be required by rules and regulations to be promulgated by the Secretary of Finance, upon the recommendation of the Commissioner.

All persons who print receipt or sales or commercial invoices shall maintain a logbook/register of taxpayers who availed of their printing services. The logbook/register shall contain the following information:

(1)        Names, Taxpayer Identification Numbers of the persons or entities for whom the receipts or sales or commercial invoices were printed; and

(2)        Number of booklets, number of sets per booklet, number of copies per set and the serial numbers of the receipts or invoices in each booklet.

SECTION 239.  Sign to be Exhibited by Distiller, Rectifier, Compounder, Repacker and Wholesale Liquor Dealer. – Every person engaged in distilling or rectifying spirits, compounding liquors, repacking wines or distilled spirits, and every wholesale liquor dealer shall keep conspicuously on the outside of his place of business a sign exhibiting, in letters not less than six centimeters (6 cms.) high, his name or firm style, with the words ‘Registered Distiller,’ ‘Rectifier of Spirits,’ ‘Compounded of Liquors,’ ‘Repacker of Wines or Distilled Spirits,’ or ‘Wholesale Liquor Dealer,’ as the case may be, and his assessment number.

SECTION 240.  Sign to be Exhibited by Manufacturer of Products of Tobacco. – Every manufacturer of cigars, cigarettes or tobacco, and every wholesale dealer in leaf tobacco or manufactured products of tobacco shall place and keep on outside of the building wherein his business is carried on, so that it can be distinctly seen, a sign stating his full name and business in letters not less than six centimeters (6 cms.) high and also giving his assessment number.

SECTION 241.  Exhibition of Certificate of Payment at Place of Business. – The certificate or receipts showing payment of taxes issued to a person engaged in a business subject to an annual registration fee shall be kept conspicuously exhibited in plain view in or at the place where the business is conducted; and in case of a peddler or other persons not having a fixed place of business, shall be kept place of business, shall be kept in the possession of the holder thereof, subject to production upon demand of any internal revenue officer.

SECTION 242.  Continuation of Business of Deceased Person. – When any individual who has paid the annual registration fee dies, and the same business is continued by the person or persons interested in his estate, no additional payment shall be required for the residue of the term of which the tax was paid: Provided, however, That the person or persons interested in the estate should, within thirty (30) days from the death of the decedent, submit to the Bureau of Internal Revenue or the Regional Or Revenue District Office inventories of goods or stocks had at the time of such death.

The requirement under this Section shall also be applicable in the case of transfer of ownership or change of name of the business establishment.

SECTION 243.  Removal of Business to Other Location. – Any business for which the annual registration fee has been paid may, subject to the rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner, be removed and continued in any other place without the payment of additional tax during the term for which the payment was made.

(Manual encoding credits: Magdaleno Abdon, Sept. 2020)