THE Bureau of Internal Revenue (BIR) has taken another step toward digitalizing tax administration with the issuance of Revenue Memorandum Circular (RMC) 98-2026 on Sept. 22. The circular prescribes guidelines for electronic invoicing under Revenue Regulations (RR) 8-2022 and RR 11-2025, as amended by RR 26-2025.
Electronic invoicing aims to improve efficiency in business transactions and tax administration. With the Dec. 31 compliance deadline approaching, taxpayers should assess their readiness.
Who are covered?
Under RMC 98-2026, the following taxpayers must issue electronic invoices by Dec. 31:
– Taxpayers engaged in e-commerce or internet transactions classified as Small, Medium or Large Taxpayers, excluding Micro Taxpayers.
– Taxpayers under the BIR’s Large Taxpayers Service.
– Taxpayers classified as Large Taxpayers under the Ease of Paying Taxes Act and RR 8-2024.
– Taxpayers using Computerized Accounting Systems (CAS), Computerized Books of Accounts with Accounting Records with electronic invoicing capabilities or other invoicing software.
– Other taxpayers as may be required by the Commissioner of Internal Revenue.
Other taxpayers may voluntarily adopt electronic invoicing, subject to BIR authorization.
For taxpayers with registered branches, compliance applies to the head office and all branches, regardless of whether a particular branch conducts the covered activity.
An electronic invoice is more than an invoice generated using a computer. Under the circular, it must:
– Be generated through a duly registered, approved or accredited accounting or invoicing system in a structured electronic format.
– Be electronically issued and transmitted to the buyer through email, QR codes, mobile applications, online platforms or other electronic means.
– Contain data capable of being electronically extracted, processed and transmitted to the BIR for electronic sales reporting.
Invoices manually prepared using Microsoft Word, Excel or similar applications do not qualify. System-generated invoices subsequently printed on paper are not considered electronic invoices if the system lacks the required electronic issuance and data transmission capabilities.
Nevertheless, electronic invoices may be printed for reference or recordkeeping, including where electronic transmission is impracticable, provided the prescribed requirements are satisfied.
The circular distinguishes electronic invoicing from electronic sales reporting. The former involves generating and electronically issuing invoices to buyers; the latter concerns transmitting prescribed sales data to the BIR.
Although electronic invoicing is mandatory for covered taxpayers by Dec. 31, electronic sales reporting becomes mandatory only upon issuance of the corresponding implementing guidelines.
The BIR’s Electronic Invoicing System (EIS) prescribes the JavaScript Object Notation format for sales data transmission. Taxpayers may use other structured formats internally, provided the required data can be converted into the BIR-prescribed format.
Before issuing electronic invoices, taxpayers must secure a Permit to Issue (PTI) Electronic Invoice from their registered Revenue District Office or Large Taxpayer Office. An existing Permit to Use or Acknowledgment Certificate for a CAS does not automatically authorize electronic invoicing.
The BIR shall evaluate PTI applications within 20 working days of receiving complete documents. Each distinct invoicing system requires a separate PTI.
Taxpayers must secure EIS Certification within six months of PTI issuance. Failure to do so constitutes grounds for revocation.
A Permit to Transmit will be required only upon notification or directive from the commissioner concerning electronic sales reporting.
Issued electronic invoices cannot be deleted, altered or modified. Any decrease in the invoiced amount requires an authorized Credit Note or Memo; an increase requires a new electronic invoice.
In case of system downtime, internet connectivity problems or other technical difficulties, taxpayers must issue duly authorized manual invoices. Upon system restoration, these must be replaced with electronic invoices referencing the original manual invoices.
Preparation
While electronic invoicing is a welcome development, implementation may require considerable preparation.
Although the deadline was previously established, the detailed guidelines were issued only on Sept. 22, leaving approximately three months to prepare.
Businesses with existing CAS may need modifications for electronic issuance, structured invoice data and data transmission. These may entail additional costs for software upgrades, integration, testing and training, particularly for businesses with multiple branches or systems.
Taxpayers engaging Electronic Invoicing Service Providers (ESPs) may face challenges. While the BIR issued accreditation guidelines under RMC 110-2026 on Oct. 12, the availability of accredited ESPs remains a consideration.
Taxpayers must account for the time needed to secure a PTI, including the prescribed evaluation period.
Electronic invoicing offers opportunities to improve business processes, recordkeeping and tax administration. Realizing these benefits requires coordinated efforts between taxpayers and the BIR.
Taxpayers should evaluate their systems, coordinate with software providers and prepare the necessary applications and certifications. Continued BIR guidance will help address implementation concerns.
Ultimately, effective electronic invoicing depends on establishing a practical, reliable and sustainable system that benefits taxpayers and tax administration.
Lew Earvin H. Manarin is an associate of Mata-Perez, Tamayo & Francisco (MTF Counsel). You may email the author at info@mtfcounsel.com or visit the MTF website at www.mtfcounsel.com.
