THE Bureau of Internal Revenue (BIR) has ordered covered taxpayers to shift to electronic invoicing on or before Dec. 31, 2026, as the tax agency moves to strengthen the digital recording and reporting of business transactions.
Under Revenue Memorandum Circular (RMC) 98-2026, the bureau prescribed the policies and guidelines for the issuance of electronic invoices under existing revenue regulations and the Tax Code.
“With these rules in place, we can now move into implementation and refine the framework as needed,” BIR Commissioner Charlito Martin Mendoza said.
“Our goal is to make electronic invoicing workable for taxpayers while laying a stronger foundation for the continued digitalization of tax administration,” he added.
The circular covers taxpayers engaged in e-commerce or internet transactions, taxpayers under the Large Taxpayers Service, large taxpayers classified under the Ease of Paying Taxes (EOPT) Act, and businesses using computerized accounting or invoicing systems.
It also covers other taxpayers that the commissioner of internal revenue may require to adopt electronic invoicing. However, micro taxpayers are exempt from the mandatory electronic invoicing requirement under the circular.
Mendoza clarified that electronic invoicing is separate from electronic sales reporting.
“Electronic invoicing and electronic sales reporting are separate requirements. For now, taxpayers should focus on complying with the electronic invoicing rules,” Mendoza said.
While covered taxpayers must comply with the e-invoicing requirement by the end of the year, Mendoza said they will only be required to comply with electronic sales reporting once the BIR issues separate implementing policies, guidelines and procedures for the system.
Under the new guidelines, an invoice will be considered an electronic invoice only if it meets specific requirements. It must be generated through duly registered, approved, or accredited accounting or invoicing software or a system capable of producing a structured electronic format.
It must also be electronically generated and transmitted to the buyer, purchaser or client through channels such as email, online viewing, QR codes, mobile applications, or web-based platforms.
The invoice data must likewise be capable of being electronically extracted, processed and transmitted to the BIR for electronic sales reporting purposes.
The BIR specifically clarified that invoices manually created through ordinary office productivity applications will not qualify as valid electronic invoices for tax compliance. This includes invoices prepared using Microsoft Word, Microsoft Excel, Google Docs, Google Sheets, or similar applications.
Similarly, invoices generated by computerized accounting systems, computerized books of accounts, point-of-sale systems, or other invoicing software but subsequently printed on paper will not be considered electronic invoices if the system cannot electronically issue and transmit the invoice to the buyer and transmit or report the required sales data to the BIR.
Such invoices will instead remain subject to rules applicable to non-electronic invoicing.
The BIR will allow covered taxpayers to choose how they comply with the electronic invoicing requirement.
Businesses may use an in-house electronic invoicing solution, commercially acquired software or the services of an electronic invoicing service provider.
An electronic invoicing service provider is defined under the circular as a Philippine-licensed entity that provides services such as e-invoicing, sales reporting, integration, validation, transmission, storage, retrieval, reconciliation, and audit support.
The agency also requires electronic invoices to use structured data that computers can automatically read, process, store and transmit.
The BIR's existing Electronic Invoicing System prescribes the JavaScript Object Notation, or JSON, format for the transmission of sales data.
Taxpayers whose accounting or invoicing systems use other structured formats may continue using them for internal operations, provided the required sales data can be converted into the BIR-prescribed format for transmission.
Moreover, covered taxpayers must secure a Permit to Issue Electronic Invoice, or PTI Electronic Invoice, from the BIR before generating or issuing electronic invoices.
The permit serves as the authority for a taxpayer to issue electronic invoices through a duly registered and compliant invoicing software or system.
Applications must be filed with the Revenue District Office or Large Taxpayer Office where the taxpayer is registered.
The BIR said it will evaluate applications and determine compliance within 20 working days from receipt of complete documentary requirements.
