BIR Ruling [DA-478-06]

August 4, 2006 BIR RULING [DA-478-06] 237; R.R. 16-2005 Philippine Amusement and Gaming Corporation 1330 Roxas Boulevard Ermita, Manila Attention: Ms. Ma. Lourdes M. Jose Managing Head Procurement and Property Department Gentlemen : This has reference to your letter dated April 21, 2006, requesting for an official statement if the issuance of the sales invoice instead of an official receipt on the purchase of goods from your suppliers, is acceptable pursuant to law existing rules and regulations. In reply, please be informed that Section 237 of the Tax Code of 1997 provides: Sec. 237. Issuance of Receipts or Sales or Commercial Invoices . All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered valued at twenty-five pesos (P25.00) or more, issue duly registered receipts or sales or commercial invoices, prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: Provided, however , That in case of sales, receipts or transfers in the amount of One hundred pesos (P100) or more, or regardless of amount, where the sale or transfer is made by a person liable to value added tax to another person also liable to value-added tax; or where the receipts is issued to cover payment made as rentals, commissions, compensations or fees, receipts or invoices shall be issued which shall show the name, business style, if any, and address of the purchaser, customer, or client: Provided, further , That where the purchaser is a VAT-registered person, in addition to the information herein required, the invoice or receipt shall further show the Taxpayer Identification Number of the purchaser. The original of each receipt or invoice shall be issued to the purchaser, customer or client at the time the transaction is effected, who, if engaged in business or in the exercise of profession, shall keep and preserve the same in his place of business for a period of three (3) years from the close of the taxable year in which such invoice or receipt was issued, while the duplicate shall be kept and preserved by the issuer, also in his place of business, for a like period. The Commissioner may, in meritorious cases, exempt any person subject to an internal revenue tax from compliance with the provisions of this Section." Corollary, Section 4.113-1 of Revenue Regulations (RR) No. 16-2005 provides: "Sec. 4.113-1. Invoicing Requirement . (A) A VAT-registered person shall issue: (1) A VAT invoice for every sale, barter or exchange of goods or properties; and (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. xxx xxx xxx Based on the abovequoted provisions, it can be inferred that the issuance of sales invoice by your supplier as proof of payment for the sale of goods instead of official receipt is acceptable. Such sales invoice should, however, contain the necessary information required pursuant to Section 4.113-1 (B) of RR 16-2005, viz: aITECA "(B) Information contained in VAT invoice or VAT official receipt . The following information shall be indicated in VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his TIN; (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided, That : (a) the amount of tax shall be shown as a separate item in the invoice or receipt; (b) If the sale is exempt from VAT, the term "VAT-exempt sale" shall be written or printed prominently on the invoice or receipt; (c) If the sale is subject to zero-percent (0%) VAT, the term "zero-rated sale" shall be written or printed prominently on the invoice receipt; (d) If the sale involves goods, properties or services some of which are subject to and some of which are VAT zero-rated or VAT-exempt, the invoice or receipts shall clearly indicate the break-down of the sale price between its taxable, exempt and zero-rated components, and the calculation of the VAT on each portion of the sale shall be shown on the invoice or receipt. The seller has the option to issue separate invoices for the taxable, exempt and zero-rated components of the sale." (3) In the case of sales in the amount of one thousand pesos (P1,000.00) or more where the sale or transfer is made to a VAT-registered person, the name, business style; if any, address and TIN of the purchaser, customer or client, shall be indicated in addition to the information required in (1) and (2) of this Section." Hoping that you have been enlightened with this correspondence. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service