Index for Application for Authority to Use Computerized Accounting Systems and/or Components thereof/Loose-leaf Book of Accounts:


DESCRIPTION

Computerized Accounting System (CAS) is the integration of different component systems and processes to produce computer-generated books of accounts and accounting records, including system-generated receipts/invoices, reports and documents. It involves computerized processing of full accounting cycle, i.e., from the inception of the transaction, issuance of receipts/invoices up to the generation of financial reports. In any case that a receipt/invoice shall be manually issued, the system/software/application shall be considered as Computerized Books of Accounts (CBA) and Accounting Records.

Computerized Books of Accounts (CBA) is a system/software/application that can generate books of accounts only, such as but not limited to General Journal, General Ledger, Sales Journal, Purchase Journal, and Inventory Book.

Components of CAS is any system/application/software adopted to generate accounting records, reports and/or documents, which includes online transaction or application/software that serves as ordering, booking, collection, receipting/invoicing and other related business transaction facilities. This system/application/software may or may not be integrated to or interfaced with CAS or CBA, whichever is applicable.

Middleware is a software that facilitates exchange of data between systems/applications within the same environment or across different hardware and network environments, including Report Writer or Report Generator.

Electronic Storage System (ESS) is a system used by the taxpayer or accredited tax agent for preserving books of accounts and other accounting records.

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TAX FORM

No tax form is required in the application for registration of System.

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DOCUMENTARY REQUIREMENTS

A. Initial Application to Adopt CAS and/or Components Thereof

  1. Sworn Statement (if system is used and maintained by taxpayer) Annex “C” of RMO No. 9-2021 or Joint Sworn Statement (if system is outsourced or used and maintained by Tax Service Providers (TSPs) or third-party software provider instead of taxpayer) Annex “E” of RMO No. 9-2021, whichever is applicable, with attached duly accomplished Summary of System Description, Commercial Invoice/Receipts/ Document Description, Forms/Records and Reports Specification, Annex “C-1” of RMO No. 9-2021;
  2. Sample print-out of Principal and Supplementary Receipts/invoices compliant with Revenue Regulation (RR) No. 16-2018 and other accountable forms that will be used, if applicable (as declared on Part V of Annex “C-1”);
  3. Sample print-out of Books of Accounts (BOA) compliant with Revenue Regulations (RR) No. 9-2009 and other reports that can be generated from the system and will be used, if applicable (as declared on Part VI of Annex “C-1”);
  4. Printed copy of Audit Trail (activity log generated by the system);
  5. Duly accomplished and signed Annex “B” - Standard Functional and Technical Requirements; and
  6. If the Software License of the software to be used is under the name of the parent or affiliate, Certification from the purchasing company allowing the taxpayer-applicant to use the same system (if applicable).

B. Application For System Enhancement/Modification

    1. In case of major system enhancement, taxpayer must submit an update of registration following the provisions of filing a new application.
    2. In case of any minor system enhancement, e.g., user interface modification, bug fixes, performance improvements, etc., the taxpayer must submit a written notification to the RDO/LT Office where it is registered, stating the specific minor enhancements on the system.

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PROCEDURES 

  1. All taxpayers who intend to use CAS, CBA, and/or its Components, including ESS, Middleware and Other Similar Systems shall inform and register with the RDO/LT Office where it is registered of its intention to use such system by submitting the requirements stated on the Checklist of Documentary Requirements (CDR) (Annex “A” of RMO No. 9-2021).
  2. Receive the Acknowledgment Certificate (AC) / Notice / Letter of Denial.

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DEADLINES

System must be registered prior to its actual use.

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RELATED REVENUE ISSUANCES

RMO No. 21-2000 and RMO No. 29-2002, RMC No. 5-2021, and RMO 9-2021

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CODAL REFERENCE

Section 232 to 235 of the National Internal Revenue Code

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FREQUENTLY ASKED QUESTIONS

1) What is a Computerized Accounting System (CAS)?

It is the integration of different component systems and processes to produce computer-generated books of accounts and accounting records, including system-generated receipts/invoices, reports and documents. It involves computerized processing of full accounting cycle, i.e., from the inception of the transaction, issuance of receipts/invoices up to the generation of financial reports. In any case that a receipt/invoice shall be manually issued, the system/software/application shall be considered as Computerized Books of Accounts (CBA) and Accounting Records. (RMO No. 9-2021).


2) What are the components of CAS?

Any system/application/software adopted to generate accounting records, reports and/or documents, which includes online transaction or application/software that serves as ordering, booking, collection, receipting/invoicing and other related business transaction facilities. This system/application/software may or may not be integrated to or interfaced with CAS or CBA, whichever is applicable.


3) Who are required to apply for a Permit to Adopt CAS or Components Thereof?

I. All Large Taxpayers (LTs) classified under Revenue Regulations (RR) No. 1-98 as amended by RR No. 17-2010, who are mandated to maintain or use Computerized Accounting System (CAS) pursuant to RR No. 9-2009;
II. All Non-Large Taxpayers (Non-LTs) engaged in business, who opted to use any of the following:
a. Computerized Accounting System (CAS);
b. Computerized Books of Accounts (CBA);
c. Components of CAS or CBA, which may be:
i. Any system/software which generates General Journal and Other Subsidiary Books / Records;
ii. Any system/software that is utilized for recording Sales, Purchases, Accounts Receivable, Accounts Payable, Inventory, and Payroll;
iii. Any system/software which generates Subsidiary Ledgers (such as Voucher Register, OR Register, Accounts Receivable/Payable Register, etc.) and Other Accounting Records (such as Principal Receipts/Invoices, Cash/Check Vouchers, Journal Vouchers, Billing Statements and Other Supplementary Receipts/Invoices);
iv. Any system/software that generates reports as required by the BIR, such as Void Report, Senior Citizen (SC)1 and/or Person With Disability (PWD)2 and the National Athletes and Coaches Discount Summary/Report, Summary List of Sales and Purchases, etc.; or
v. Cash Register Machines (CRMs), Point-of-Sale (POS) Systems or any sales receipting/invoicing system/software connected through a network or linked to CAS/CBA;
d. Taxpayers engaged in business who shall use an Electronic Storage System (ESS), Middleware, and Other Similar Systems. (RMO No. 9-2021)


4) Who shall apply for permit to use CAS or components thereof if taxpayers’ consultants provided the system?

Taxpayers who will avail the services of Tax Service Providers (TSPs) or third-party software provider for the use of a system/software must register such system with the BIR prior to the effectivity of their contract with the TSPs or third-party software provider and submit a Joint Sworn Statement (Annex “E” of RMO No. 9-2021) with attached Summary of System Description, Commercial Invoices/Receipts/Document Description, Forms/Records and Reports Specification (Annex “C-1” of RMO No. 9-2021) executed by both parties. Both parties must also include in their Joint Sworn Statement that the system/software has no facility that may suppress sales/income and/or other technical scheme that may affect the correctness of the sales for purposes of taxation. Taxpayers who availed the services of TSPs shall be required to keep and maintain all accounting records and other relevant financial data for a mandatory period of five (5) years pursuant to the provisions of Revenue Regulations (RR) No. 7-2024 in their principal place of business and should be made available to BIR during the audit and other enforcement activities that will be conducted by the Authorized Revenue Officer of the BIR. In case of termination/expiration of contract, the taxpayer who availed of the services of TSP shall notify the RDO having jurisdiction over their place of business prior to the expiration/termination of contract with the developer/provider. Such termination/expiration of contract shall automatically cancel the registration of “System”. (RMO No. 9-2021).


5) In cases of affiliated companies, sister companies, franchisees and closely held corporations, who shall apply for the registration of System?

Affiliated companies, sister companies, franchisees, closely held corporations, other similar companies related to a parent company shall register the “System” to be used with the RDOs/LT Office where the aforesaid companies are registered.
This requirement shall be applicable regardless of whether these companies are sharing servers and using exactly the same “System” previously registered and used by the parent company or other related companies.


6) Where should taxpayers apply for the registration of System?

Application for the registration of “System” may either be manually or electronically through the Online Registration and Update System (ORUS). For online application, all the required documents may be uploaded in JPEG, PNG, and PDF format, not exceeding 25 Megabytes (MB). All manual applications for the registration of System whether by Head Office or Branches shall be filed by the Head Office at the Large Taxpayer Assistance Division (LTAD) I or II, Large Taxpayer District Office (LTDO) and Revenue District Office (RDO) having jurisdiction over the taxpayer’s Head Office except in the following cases:

  1. In the event that the Head Office shall subsequently adopt the same “System”, which was previously adopted by the Branch Office and duly registered with the RDO where the branch was registered, new registration documents shall be submitted by the HO to its RDO and a new Acknowledgement Certificate (AC) shall be issued to the Head Office. The Annex of the AC shall indicate all the branches that are using the said system/software. ·
  2. In case the branch adopts a different CAS from that of its Head Office, it shall register the System at the RDO having jurisdiction over the branch.

 

7) When should the application be filed?

The application for the registration of System should be applied before the system is used or the enhanced system is adopted.


8) What are the documents required to be submitted in applying for the registration of System?

 

  1. Sworn Statement (if system is used and maintained by taxpayer) Annex “C” of RMO No. 9-2021 or Joint Sworn Statement (if system is outsourced or used and maintained by Tax Service Providers (TSPs) or third-party software provider instead of taxpayer) Annex “E” of RMO No. 9-2021, whichever is applicable, with attached duly accomplished Summary of System Description, Commercial Invoice/Receipts/ Document Description, Forms/Records and Reports Specification, Annex “C-1” of RMO No. 9-2021;
  2. Sample print-out of Principal and Supplementary Receipts/invoices compliant with Revenue Regulation (RR) No. 16-2018 and other accountable forms that will be used, if applicable (as declared on Part V of Annex “C-1”);
  3. Sample print-out of Books of Accounts (BOA) compliant with Revenue Regulations (RR) No. 9-2009 and other reports that can be generated from the system and will be used, if applicable (as declared on Part VI of Annex “C-1”);
  4. Printed copy of Audit Trail (activity log generated by the system);
  5. Duly accomplished and signed Annex “B” - Standard Functional and Technical Requirements; and
  6. If the Software License of the software to be used is under the name of the parent or affiliate, Certification from the purchasing company allowing the taxpayer-applicant to use the same system (if applicable).


9) After filing the application, when will the Permit to Adopt CAS and/or Components Thereof be issued?

The Acknowledgment Certificate shall be issued within three (3) working days from the receipt of complete documentary requirements.


10) What is e-Invoicing (Electronic Invoicing System)?

It is the automated creation, exchange and processing of request for payments between suppliers and buyers using a structured digital format, generating an electronic invoice/receipt which is generated from CAS/CRM/POS/any invoicing/receipting system/software registered with the BIR.


11) Is Authority To Print (ATP) Receipts/Invoices still required if the taxpayer adopts CAS?

It shall be required if the system has no redundancy or automatic switchover during systems downtime, and the taxpayer will issue manual principal and/or supplementary receipts/invoices instead.
However, manually pre-printed and pre-numbered principal and/or supplementary receipts/invoices with approved ATP reserved or set aside for use during systems downtime should not exceed one thousand (1,000) sets at a time.
If Taxpayers with duly registered “System” or CBA, without system-generated principal and/or supplementary receipts/invoices, should apply for Authority to Print (ATP) such receipts/invoices based on existing revenue issuances.


12) Are taxpayers with Global System and using invoices printed abroad, required to seek advance approval of the range of serial numbers for said invoices?

Yes. The documents with such set-up should be disclosed and identified accordingly in the SUMMARY OF SYSTEM DESCRIPTION, COMMERCIAL INVOICE, DOCUMENT DESCRIPTION, FORMS/RECORDS AND REPORTS SPECIFICATION (Annex “C-1” of RMO No. 9-2021).


13) Is the taxpayer adopting a CAS required to maintain a hardbound computer generated books of accounts, receipts and invoices and other accounting records and have them stamped?

No. Instead, soft copy of the Computerized Books of Accounts and Other Accounting Records shall be registered within thirty (30) calendar days from the close of the taxable year. It shall be in Standard Audit File (SAF) in compliance with RR No. 16-2006, as amended, and shall be saved in a Universal Serial Bus (USB) Drive or other electronic storage device, properly labeled with the name of the taxpayer and the taxable year.


Taxpayers may also opt to register their Books of Accounts online using the Online Registration and Update System (ORUS). (RMC No. 3-2023)


14) Where does a taxpayer with a permit to use CAS, register his books of accounts and submit other accounting records?

The taxpayer shall register with the LTAD I or II, LTDOs or RDOs where the HO/Branch is registered.


15) Are taxpayers with web-enabled electronically generated receipts/invoices (e.g. payment through credit card, payment through ATM and other similar web-enabled electronically operated receipts/invoices) required to secure CAS Acknowledgment Certificate?

Yes, taxpayer with web-enabled electronically generated receipts and invoices are required to register their System prior to its actual use.


16) Who shall conduct the post system evaluation of the approved CAS of a branch?

The LT Office/Division or RDO having jurisdiction over the Head Office of the branch shall conduct the post system evaluation of the approved CAS.


17) If during the Post System Evaluation, the TWG members/LTDO/RDO discovered that the taxpayer is using a system other than that of the approved CAS or a modified version of the approved CAS, would the recommendation for revocation of permit/Acknowledgment Certificate be final?

Yes, the revocation of the previously approved permit to use CAS shall be final and executory. Hence, it is mandatory for the taxpayer to apply for a new permit.


18) Shall the TWG members/LTDO/RDO be allowed to conduct post system evaluation in case taxpayers modify/enhance its CAS?

The TWG members/LTDO/RDO shall have the authority to conduct post system evaluation through a Mission Order that shall be secured prior to its conduct.


19) What shall be the alternative course of action by TWG members/LTDO/RDO in case the taxpayer prohibits them to check into its server during the post system evaluation?

The TWG members/LTDO/RDO shall report the taxpayer to the Legal and Enforcement Service, Attention: Tax Fraud Division.


20) Is the six (6) – month period of interval from the date of issuance of the Acknowledgment Certificate required before the TWG members/LTDO/RDO can conduct post system evaluation?

There is no required period of interval to post evaluate the approved CAS of the taxpayer. The TWG members/LTDO/RDO can conduct post system evaluation of the approved CAS as the need arises.

 

21) What is the jurisdictional limitation of the divisions under Large Taxpayer Service in the issuance of CAS Acknowledgment Certificate?


LT Office/Division are authorized to issue Acknowledgment Certificate of branches of identified taxpayers of LTAD I or II and LTDOs nation-wide.

 

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