BIR Ruling [DA-214-00]

April 7, 2000 BIR RULING [DA-214-00] 235; M-004-99; DA-214-2000 Ongkiko Kalaw Manhit and Acorda Law Offices 4th Flr. Cacho-Gonzales Bldg. 101 Aguirre St., Legaspi Village Makati City Attention: Atty . Mariano C . Ereso Gentlemen : This refers to your letter dated February 11, 2000 requesting in behalf of your client, AT & T Global Network Services International, Inc. (AT &T), for an authority to use the Oracle Financials software for its computerized based accounting system for the following accounting records: 1. General Ledger (Detail Trial Balance); 2. Sales Book (Accounts Receivable Invoice Register); 3. Cash Disbursement Book (Final Payment Register by Date); and cdlex 4. Purchases Book (Accounts Payable Invoice Register). It appears that AT & T activities among others, consist of providing network connectivity, internet services, dial-up services and other services related to telecommunications; and that being a branch office of a world-wide telecommunications company which uses computerized based accounting system, AT & T through its use of the same system will be able to record and reflect all its transactions in a manner whereby the results of operations are shown and from which all taxes due the government are readily and accurately ascertained and determined anytime of the year. In reply, please be informed that your request is hereby granted subject to the following conditions: 1. A readable printout of the information/accounting data should be made available or verifiable; 2. Diskettes containing records, classification and summary of transactions shall be subject to examination and inspection of internal revenue officers as if they are the traditional books of accounts, in accordance with Section 235 of the Tax Code of 1997. (BIR Ruling No. 036-95 dated February 16, 1995) 3. Whenever required, the BIR shall be provided a Manual of Operations of the System, and updates thereon, as applicable, including the Manual of Operations of a Disaster/Recovery Plan on the issuance of the computer-generated documents in case of system unavailability; 4. Authorized BIR personnel, with the assistance of the corporation's representative shall be given special access to the system and shall be provided with a copy of the database for tax audit purposes; and 5. The BIR shall monitor and/or conduct system evaluation after at least six (6) months of actual implementation of the system or as the circumstances so warrant. This interim permit is being issued only for the computerized accounting system applied for, i.e. General Ledger, Sales Book, Cash Disbursement Book and Purchases Book. It shall be understood that this approval does not give you the authority to generate computerized invoices and/or receipts which shall require prior separate approval from this Office. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)