Changes have been introduced to eliminate delays for new businesses to start trading, making the Philippines a better place for investors.
The Philippines Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) no. 28-2019 prescribing the use of BIR printed receipts and invoices (BPR/BPI). This is a part of the government's aim to improve the business ranking of the Philippines through a concerted programme of simplification, accelerating the timeframe for starting and operating a business in the Philippines under the 'Ease of Doing Business and Efficient Government Service Delivery' Act of 2018.
Control of invoices and receipts
Under the Philippine tax code, all business transactions of one hundred pesos or more must be documented by the issuance of an official sales receipt or an invoice at the point of sale. Companies must use the official Bureau Printed Receipts (BPR) and Bureau Printed Invoices (BPI) supplied by the BIR printers. The use of BPR/BRI issued directly by the BIR provides customers with certainty over the legitimacy of the BPR/BPIs they receive and gives them a formal document that will be accepted by the BIR to satisfy the requirements to evidence claims for expenses as deductions from gross income; and for claiming of income tax credits.
However, as the BPR/BPI are to be printed with specific details to identify the vendor, a new company needs to make an application to the BIR for Authority to Print ('ATP') their own BPR/BPI. A business can apply to the BIR immediately after business registration.
Delays in approval of ATP
Inevitably, there is a period of delay between a new business application to the BIR for ATP and the receipt of approval from the BIR. This has caused frustration to new business owners as it has prevented them from commencing trading.
RMC 28-2019 has relieved the burden on newly established businesses of having to wait for the BIR to grant ATP principal receipts and invoices and using the accredited printer. It allows new businesses to commence their business activities by securing interim approved BPR/BPI at the time of their registration at BIR's New Business Registrant Counter (NBRC). Newly established businesses will be allowed to use these interim BPR/BPI for the first 15 days from the date of registration, thus, the number of booklets issued to them will be limited to the estimated number of transactions for the 15-day period.
Businesses must be aware that only the BIR is allowed to print and issue the BPR/BPI. The BIR has not approved any third-party provider.
A good step forward
This is good news for newly established businesses and advances the government's aim of accelerating the formation of new businesses and getting them trading as quickly as possible. It is hoped that more initiatives will be brought forward to further these aims. However, starting a new business in the Philippines still has many potential pitfalls and investors should always consider local professionals to assist.
Talk to us
TMF Philippines can assist investors seeking to expand into or within the Philippines and across the globe. We monitor changes to all rules and regulations locally to remain up to date, and can provide assistance with all corporate secretarial matters. To learn more about TMF Group and our services contact us today.
Download the Global Business Complexity Index to discover where the Philippines ranks among 76 jurisdictions for business complexity.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.