Policies and Procedures in the Accreditation of Cash Register Machine (CRM), Point of Sale (POS), Other Sales Machines Including Sales Receipting System Software and Registration for the Use Thereof Pursuant to Revenue Regulations No. 11-2004 and Revenue Regulations No. 5-2005

March 31, 2005 REVENUE MEMORANDUM ORDER NO. 10-05 SUBJECT : Policies and Procedures in the Accreditation of Cash Register Machine (CRM), Point of Sale (POS), Other Sales Machines Including Sales Receipting System Software and Registration for the Use Thereof Pursuant to Revenue Regulations No. 11-20 04 and Revenue Regulations No. 5-20 05 TO : All Internal Revenue Officials and Employees and Others Concerned I. OBJECTIVE This Order is issued to further prescribe policies, guidelines and procedures as well as define duties and responsibilities relative to the processing and approval of applications for Accreditation and Registration of Sales Machine Models and/or Sales Receipting System Software. II. DEFINITION OF TERMS 1. Sales machines shall refer to CRM, POS, and other machines such as but not limited to taximeters, vending machines, handheld/roving mobile devices, validating machines and other machines used in the issuance of receipts/invoices. 2. Sales Receipting System Software This refers to systems software solely for sales receipting/invoicing that supports the business requirements of an establishment/company in the issuance of sales receipts/invoices. 3. Special Purpose Machines are machines for internal use only and do not generate sales. 4. Supplier shall refer to manufacturer, distributor, dealer or vendor of sales machines and/or sales receipting system software. 5. "Pseudo" Supplier shall refer to taxpayer-user who can be categorized as follows: a) Direct importers of CRM/POS for their own internal use and/or for distribution to their different branches/franchisees; b) Companies who develop their own sales receipting system software for their use and/or for distribution to their different branches/franchisees. EAcCHI 6. Generic Machines are machines not identified by a specific trade or brand name. This includes cloned machines. 7. Proprietary Machines are machines with proprietary design or technique identified by a specific trade or brand name. 8. Major Repairs/Enhancement shall refer to any change, upgrade, integration or modification on the machine and/or software. 9. Minor Repairs shall refer to repair of sales machines which do not alter the information stored in the machine and does not change, upgrade or modify the machine and/or software. 10. Tamper Free sales data or integrity of the data were not manipulated to alter/avoid the recording of a sale transaction; and machine/software specifications/features were not altered or modified. 11. Accreditation Number is a number issued to an accredited supplier for a particular machine model/brand. It is a combination of unique six (6) digit systems-generated control number, prefixed by RDO Code and TIN; and suffixed by a two (2) digit check number for tracking additional brands/models. 12. Registration is the manner of informing the BIR of the machines sold prior to delivery or use of the machines. Permit to Use will be issued upon successful registration together with the Machine Identification Number. 13. Machine Identification Number is a nine (9) digit unique number issued by the system to every Cash Register Machine or Point-of-Sales upon successful registration in the Electronic Accreditation and Registration System (eAccReg); and in Electronic Sales (eSales) Enrollment. It is intended for use in the Electronic Sales Reporting. 14. Enrollment is the process of obtaining a Machine Identification Number for sales reporting purposes. III. SCOPE OF IMPLEMENTATION This order shall cover all sales machines and/or sales receipting system software utilized in the conduct of business to record sales transactions which shall include the following: A. For Accreditation and Registration : 1. Cash Register Machines (CRM); 2. Point of Sales Machines (POS) includes bundled POS or software alone; 3. Sales Receipting System Software; 4. All other sales machines/software such as but not limited to: a) Taximeters; b) Handheld or Mobile Devices; c) Unmanned bill, coin or token-operated machines; d) Other Sales Machines/Software Accreditation procedure for all other sales machines/software mentioned in Section III (A.4) shall be covered by a separate Revenue Memorandum Order. STDEcA B. For Registration Only : Special purpose machines/software such as: 1. Cash depository; 2. Foreign exchange machines; 3. Ordering machines; 4. Bills payment machines; 5. Internal special purpose machines IV. ACCREDITATION OF SALES MACHINES AND/OR SALES RECEIPTING SYSTEM SOFTWARE A. POLICIES on Accreditation 1. All suppliers shall have the sales machines and/or sales receipting system they intend to distribute/sell/use be duly accredited by the Bureau prior to the actual distribution/sale/use of the sales machines and/or sales receipting system software. 2. A "pseudo" supplier of sales machines and/or sales receipting software shall likewise apply for accreditation. 3. The application for accreditation shall be in the form of a Sworn Statement duly executed by the supplier of the sales machines and/or sales receipting system software. The Sworn Statement may cover several sales machines provided the specifications/features of each machine/software are indicated therein. 4. All applications for accreditation of sales machines and/or sales receipting system software shall be filed at LTAD I or II, LTDO or RDO having jurisdiction over the Head Office of the supplier. 5. There shall be established, in the Bureau of Internal Revenue, the National Office Machine Accreditation Board (NMAB) which has jurisdiction over the large taxpayers; and Regional Office Machine Accreditation Board (RMAB) which has jurisdiction over the regular taxpayers. Refer to Section 8 of RR 11-2004 on the composition of the NMAB and RMAB. 6. The evaluation procedures must be undertaken and completed by the NMAB/RMAB within five (5) working days from receipt of the application for accreditation and the complete documentary requirements. 7. Suppliers applying for accreditation where sales machine model/brand and software version have been previously accredited shall be exempt from systems demonstration. A 'Certificate of Accreditation' shall be issued within one (1) day from submission of complete documentary requirements of previously accredited sales machines/software. 8. A list of all duly-accredited sales machines and/or sales receipting system software shall be posted at the BIR website: www.bir.gov.ph or portal https://my.bir.gov.ph , to inform the taxpayer-user of those sales machines and/or sales receipting system software that have been accorded official accreditation. 9. All suppliers shall notify the BIR office concerned in writing on any minor/major repairs made in the sales machines and/or sales receipting system software. 10. Any sales machines and/or sales receipting system software that have undergone major repair/enhancement shall require another accreditation and will necessitate issuance of new accreditation number. 11. All sales machines shall not be switched to "training mode" or to "no sale transaction mode", or otherwise manipulated to impair/impede/suspend the recording of a sale transaction. Any receipt generated during training mode shall indicate in the receipt/invoice "THIS IS NOT AN OFFICIAL RECEIPT". 12. All sales machines which shall require any reprinting of the invoice/receipt without distorting the stored sales data shall indicate in the invoice/receipt "REPRINT ONLY" including the date and time of reprinting done. 13. All sales machines with built-in-printer must be able to handle non-thermal paper or high-grade thermal paper (thermal paper to last 3-years). 14. As a general rule Cash Register Machines (CRM) shall have a minimum of six (6) digits OR/Invoice Number, however, four (4) digits OR/Invoice Number with at least two (2) digits visible/programmed reset counter number shall qualify for accreditation. 15. All machines/software mentioned in Section III (A) of this memorandum shall apply for accreditation and shall require registration. A separate Revenue Memorandum Order shall be issued to handle accreditation of machines/software mentioned in Section III (A.4). Special purpose machines as enumerated in Section III (B) shall not be accredited however they shall require registration. 16. Travel allowance of NMAB/RMAB members to and from the supplier site, per diem and other related expenses for systems demonstration and ocular inspection shall be allocated. 17. A workshop shall be conducted to the members of NMAB/RMAB by the Human Resource Development Service (HRDS) in coordination with the Operation and Information Systems Groups to orient both the technical and the functional groups on the scope, substance and evaluation of sales machines and/or sales receipting system software for accreditation. B. PROCEDURES on Accreditation 1. Large Taxpayers Assistance Divisions I & II, Large Taxpayers District Office and Revenue District Office [Taxpayer Service Section (TSS)] : a) New application for accreditation of sales machine brand/model and/or sales receipting system software: 1. Require the supplier to submit the application for accreditation in the form of a Sworn Statement (Annex "A") together with the documents in duplicate copies as enumerated in the Checklist of Requirements (Annex "B"); 2. Receive the requirements submitted by the supplier of sales machines and/or sales receipting system software; 3. Evaluate validity of the application and review completeness of requirements submitted by checking the appropriate boxes in Checklist of Requirements (Annex "B"); 4. If requirements are complete, stamp "Received" Sworn Statement and other documentary requirements, which shall now be the docket of accreditation, otherwise, return the documents submitted to the supplier with instructions to complete the requirements; 5. Coordinate with supplier the date and venue for actual systems demonstration of the proposed application for accreditation of sales machines and/or sales receipting system software and forward docket of accreditation to NMAB/RMAB for evaluation; 6. Receive from NMAB/RMAB the docket of accreditation and results of systems demonstration; 6.1 If recommended for approval: a. Encode details of approved application for accreditation and generate accreditation number using the BIR web facility (please refer to manual guide for the detailed procedure); b. Print online accreditation certificate and validate accuracy and completeness of information contained in the certificate; c. Forward to Head of NMAB/RMAB the docket of accreditation and systems generated Certificate of Accreditation (Annex "C") for signature; d. Receive from Head of NMAB/RMAB duly signed 'Certificate of Accreditation' for release to the accredited supplier; e. Explain to the accredited supplier their responsibility to register machines sold within five (5) days from the date of actual sale and before its actual use by the taxpayer-user 6.2 If recommended for disapproval: a) Receive from NMAB/RMAB duly signed report on the results of evaluation together with the docket of accreditation; b) Receive Letter of Denial of Application for Accreditation of Sales Machines and/or Software (Annex "D") for release to suppliers; c) Coordinate with suppliers on the results of evaluation explaining the reasons why the application was disapproved which is stated in the 'Letter of Denial' in order for the supplier to reconfigure the sales machines and/or sales receipting system software to meet BIR's requirements. Return all the documents submitted by the supplier. b) Application of sales machine brand/model and/or sales receipting system software previously accredited but different supplier: Follow procedures enumerated in (a) 1-5 and 7.1 (a-e) above. 2. National/Regional Office Machine Accreditation Board (NMAB/RMAB) : a) Receive the docket of accreditation from TSS of LTAD I & II/LTDO/RDO; b) Coordinate with TSS of LTAD I & II/LTDO/RDO and members of NMAB/RMAB on the schedule of the date and venue of systems demonstration with the supplier; c) Attend systems demonstration; d) Evaluate application and determine compliance to both technical and functional requirements; e) Raise all issues and concerns before, during and after actual systems demonstration, if any, and coordinate with the supplier thru TSS of LTAD I & II/LTDO/RDO for their early resolution; f) Evaluate resolution/s provided; g) Accomplish Functional and Technical Evaluation/Appraisal Checklist of Sales Machines and/or Sales Receipting System Software Applied for Accreditation (Annex "E"); h) Submit duly signed report on the result of evaluation with the docket of accreditation to TSS together with the recommendation if approved or disapproved; i) If application for accreditation is disapproved, prepare Letter of Denial of Application for Accreditation of Sales Machines and/or Software (Annex "D"); j) Receive from TSS systems-generated 'Certificate of Accreditation' for signature; k) Forward duly signed 'Certificate of Accreditation' or 'Letter of Denial of Application for Accreditation of Sales Machines and/or Software' whichever is applicable to TSS for release to supplier. 3. Taxpayer Assistance Service (TAS) through the Taxpayer Service Programs and Monitoring Division (TSPMD)] : a) Receive issues/concerns, if any, from LTAD I or II/LTDOs/RDOs that requires policy direction or recommendation for further enhancement of the system or procedures in the RMO; and b) Consolidate reports and submit to ACIR, Taxpayer Assistance Service for resolution of issues and shall in turn elevate to MANCOM any unresolved issues, if necessary. C. POLICY and PROCEDURES of REVOCATION of Accreditation 1. If during the conduct of Tax Compliance Verification Drive (TCVD) or post audit the following findings have been observed, the Certificate of Accreditation granted shall be subject for revocation: a) Tampering of Certificate of Accreditation; b) Any misrepresentation on the Sworn Statement submitted by the supplier; c) Any violation(s) of the supplier on the policies and procedures for accreditation under RR 11-2004 and this order. 2. The Revenue Officer who conducted the post audit shall report to the Head of Office concerned, who in turn shall issue written warning before actual revocation of Certificate of Accreditation a) Prepare the Letter of Warning/Revocation (Annex "F"). The first warning shall be issued upon observation of the violation. b) After two (2) weeks of non-compliance to the said written warning, the Letter of Warning/Revocation (Annex "F") shall be issued and the Certificate of Accreditation inclusive of the accredited machines shall be revoked. V. REGISTRATION ON THE USE OF SALES MACHINE MODEL/SYSTEM A. POLICIES on Registration 1. Only those sales machines that are found to be compliant with the machine specifications pursuant to RR 11-2004 shall be issued Permit to Use. A Permit Number and Machine Identification Number (MIN) shall be issued for each machine being registered. 2. The Machine Identification Number (MIN) shall be used for electronic sales reporting (guidelines of which is contained in Revenue Regulations No. 5-2005). 3. An accredited supplier shall register not later than five (5) days from date of sale of machine and before its actual use the sales machines to be sold/distributed in behalf of the taxpayer-user. 4. Taxpayer-user who acquired non-accredited machines from non-accredited supplier shall be responsible to register the said machines. 5. Taxpayer-user shall likewise register special purpose machines as identified in Section III (B) 6. Application for Registration of sales machines may be filed manually to LTAD I or II, LTDOs, RDOs or electronically thru e-mail or web. 7. In cases where the taxpayer-user acquires the software and hardware separately: a) Accredited supplier of sales receipting system software machines shall register the generic machines in behalf of the taxpayer-user; b) Accredited supplier of sales machines shall register the proprietary machines in behalf of the taxpayer-user; 8. A "decal" which shall be securely attached to the machine to which it refers and shall be conspicuously visible to the public. This shall be provided by the accredited supplier for every registered sales machine sold, following the template and specifications provided by BIR. If the machine is acquired through a non-accredited supplier, the taxpayer-user shall secure the decal from the RDO where the machine will be used after registration for the use thereof. The taxpayer-user shall provide the sticker for special purpose machines. 9. The concerned machine shall be used exclusively in the operation of only one line of business covered by the Permit to Use. If the enterprise is conducted simultaneously with another line of business for which no cash register permit has been issued, sales made in the latter line of business shall be covered with the corresponding manual issuance of registered sales invoices or receipts following policies and procedure pursuant to RMO 28-2002 in the issuance of Authority to Print (ATP). However, a sales machine with the built-in capacity to accumulate sales data of different lines of business may be authorized by the Commissioner to issue receipts/invoices for all such different line of business, provided however, that the distinction of sales by lines of business shall be clearly indicated on the machine paper tapes in words rather than in codes or symbols. 10. An unmanned machine capable of dispensing goods and services in exchange, for bills, coins or tokens without the capacity for issuing receipts/invoices must be registered in the same manner as provided in this memorandum. 11. The taxpayer-user shall not change his business name or the use of the registered machine, or transfer to another business location, branch or establishment or otherwise, without prior written notice to the RDO where he is registered or through email to [emailprotected] . 12. A taxpayer-user who has been issued a 'Permit to Use Sales Machines' shall not have the machine undergo any 'major repairs, upgrade, change, modification, update, or otherwise removal from its specified location, without prior written notice to the RDO where the machine is registered or through email to [emailprotected] . 13. Following any major repairs, upgrade, change, modification, update or otherwise, and prior to the re-use of the concerned machine, the user and person who made the major repairs/change/modification/update shall submit a Joint Sworn Statement (Annex "G") attesting to such development to the Chief, LTAD I or II/Chief, LTDO/RDO having jurisdiction over the concerned user. 14. Ordinary repairs on the machine shall not require any prior approval, however, the RDO, LTAD I/LTAD II having jurisdiction over which the machine is being used shall be properly informed in writing or through email to [emailprotected]. 15. In case of any repairs of the sales machines, manually registered receipts/invoices may be issued following provisions under RMO 28-2002. 16. Registered machines may be withdrawn from use, either by retirement or sale, only upon prior application of, and approval by, the Chief, LTAD I or II/Chief, LTDO/concerned RDO. 17. In order to maintain the consecutive sequence of the transaction numbers imprinted on the customer's receipts and the audit journal tapes, the receipt numbering mechanism/circuit of a registered machine shall not be disturbed or tampered with. 18. The provision of Revenue Regulations No. 11-2004 shall apply in the post evaluation of newly registered sales machines/system whether acquired through an accredited supplier or not including those with previously issued permits. 19. A separate application for Permit to Use is required for sales machines which are linked to Computerized Accounting System (CAS). B. PROCEDURES on Registration 1. For Newly Accredited Machines a) Manual Application for Registration Large Taxpayers Assistance Divisions I & II, Large Taxpayers District Office and Revenue District Office (Taxpayer Service Section {TSS}) ; 1. Receive from accredited supplier List of Sales Machines Sold to be Registered per Taxpayer-user (Annex "I") within five (5) days from date of sale of the accredited sales machines and/or sales receipting system software. The said list shall be submitted by the accredited supplier to the RDO of the taxpayer-user; 2. Encode details of machines for registration per taxpayer-user using the BIR web facility (detailed procedures in the application shall be included in the manual guide). 3. Prepare and issue Permit to Use Sales Machines (Annex "J"); and generate MIN to accredited supplier for distribution to each taxpayer-user; 4. Inform supplier to provide decal (Annex "K") for each machines which shall be attached to the machines before distribution to the taxpayer-user. b) Electronic Application for Registration 1. SMS (Short Messaging System) For future implementation. 2. E-mail (Electronic Mail) Use of Mail clients (Microsoft Outlook, web-based mails like Yahoo, Hotmail, etc) with internet connection a. Accredited Supplier downloads the file format (supplier.csv) of the List of Sales Machines Sold to be Registered per Taxpayer-user (Annex "I") by logging on the BIR website b. Accredited Supplier sends an e-mail to [emailprotected] with attachment mentioned above; c. Accredited Supplier receives an e-mail confirmation indicating a successful registration of all applied machines together with the Permit Number and MIN for each applied machines. He can now proceed to print, the systems-generated 'Permit to Use Sales Machines'; d. Accredited Supplier prints systems-generated 'Permit to Use Sales Machines' through the web channel; e. Accredited Supplier delivers the machines to taxpayer-user with the decal already attached to the machine (provided by the Supplier) together with the 'Permit to Use Sales Machines" f. Accredited Supplier also provides the taxpayer-user with the MIN for each machine. 3. Web/Portal Use of Web Browsers (Internet Explorer, Netscape, Mozilla, etc) with Internet connection. a. Accredited Supplier uses the web/portal facility to process registration of machine per taxpayer-user online. Please refer to the on-line procedure accessible through the eAccReg icon; b. Accredited Supplier receives a confirmation message indicating a successful registration of all applied machines, together with the Permit Number and MIN for each applied machine. He can now proceed to print the systems-generated `Permit Use to Sales Machines'; c. Accredited Supplier prints systems-generated 'Permit to Use Sales Machines; d. Accredited Supplier delivers the machines to taxpayer-user with the decal already attached to the machine (provided by the supplier) together with the 'Permit to Use Sales Machines'; e. Accredited Supplier also provides the taxpayer-user with the MIN for each machine. 2. For Non-Accredited machines a) Manual Application for Registration Large Taxpayers Assistance Divisions I & II, Large Taxpayers District Office and Revenue District Office (Taxpayer Service Section {TSS}) ; 1. Receive from taxpayer-user Sworn Statement (Annex "A") and List of Sales Machines for Registration (Annex "L") within five (5) days from date of sale/use of sales machines and/or sales receipting system software; 2. Encode details of machines for registration per taxpayer-user using the BIR web facility (detailed procedures in the application shall be included in the manual guide). 3. Prepare and issue Provisional Permit to Use Sales Machines (Annex "M"); and generate MIN for each applied machine; 4. Issue the decal for each machine which shall be attached to the machines to the taxpayer-user, and provide the MIN for each applied machine, b) Electronic Application for Registration 1. Email (Electronic Mail) a. Taxpayer-user downloads the file format (taxpayer-user.csv) of List of Sales Machines for Registration (Annex "L") by logging on the BIR website. b. Taxpayer-user sends an e-mail to [emailprotected] with attachment mentioned above; c. Taxpayer-user receives an e-mail confirmation indicating a successful registration of all applied machines together with the Permit Number and MIN for each applied machines. He can now proceed to print the systems-generated `Provisional Permit to Use Sales Machines'; d. Taxpayer-user prints systems-generated `Provisional Permit to Use Sales Machines' through the web channel; e. Taxpayer-user secures decal from the RDO where the taxpayer-user is registered. 2. Web/Portal a. Taxpayer-user uses the web/portal facility to process registration of machine per taxpayer-user online. Please refer to manual guide for the detailed procedure on the use of the application; b. Taxpayer-user receives a confirmation message indicating a successful registration of all applied machines, together with the Permit Number and MIN for each applied machine. He can now proceed to print the systems-generated `Provisional Permit Use to Sales Machines'; c. Taxpayer-user prints systems-generated `Provisional Permit to Use Sales Machines'; d. Taxpayer-user secures decal from the RDO where the taxpayer-user is registered. 3. For Special Purpose Machines a) Manual Application for Registration Large Taxpayers Assistance Divisions I & II, Large Taxpayers District Office and Revenue District Office (Taxpayer Service Section {TSS}) ; 1. Receive from taxpayer-user the List of Special Purpose Machines for Registration (Annex "N") within five (5) days from date of sale of the machines; 2. Encode details of machines for registration per taxpayer-user using the BIR web facility (detailed procedures in the application shall be included in the manual guide). 3. Prepare and issue Permit to Use Special Purpose Machines (Annex "O") 4. Shall inform the taxpayer-user to provide the sticker for special purpose machines. Please refer to Annex "P". b) Electronic Application for Registration 1. Email (Electronic Mail) a. Taxpayer-user downloads the file format (special purpose machine.csv) of List of Special Purpose Machines for Registration (Annex "N") by logging on the BIR website. b. Taxpayer-user sends an e-mail to [emailprotected] with attachment mentioned above; c. Taxpayer-user receives an e-mail confirmation indicating a successful registration of all applied machines. d. Taxpayer-user prints systems-generated 'Permit to Use Special Purpose Machines' through the web channel. e. Taxpayer-user shall provide the sticker for special purpose machines. Please refer to Annex "P". 2. Web/Portal a. Taxpayer-user used the web/portal facility to process registration of machine per taxpayer-user online. Please refer to manual guide for the detailed procedure on the use of the application; b. Taxpayer-user receives a confirmation message indicating a successful registration of all applied machine; c. Taxpayer-user prints systems-generated 'Permit to Use Special Purpose Machines'. d. Taxpayer-user shall provide the sticker for special purpose machines. Please refer to Annex "P". C. POLICY and PROCEDURES of REVOCATION of Registration/ POSTAUDIT of PROVISIONAL PERMIT to USE 1. The Bureau reserves the right to inspect any machine/system registered at any time during store hours, to verify compliance with specifications of a valid machine/system, the data requirements of the machine generated invoice, the conditions for use of the machines as well as other regulations that may be subsequently issued governing use of machines. Store personnel are thus required, under the authority granted for the use of machine/system, to present the machine for inspection and reading by the concerned revenue personnel. 2. The RDO where the taxpayer-user is registered shall conduct the post-audit of the Provisional Permit to Use. The RDO shall ensure that the sales machines/software is compliant with the policies of accreditation as stipulated in this RMO. Please refer to the Functional and Technical Evaluation/Appraisal Checklist of Sales Machines and/or Sales Receipting System Software Applied for Accreditation (Annex "E"). 3. If compliant, the RDO shall issue the new Permit to Use using the BIR web facility (detailed procedures in the application shall be included in the manual guide). 4. If non-compliant, the RDO shall revoke the Provisional Permit to Use, by releasing to the taxpayer-user the Letter of Warning/Revocation (Annex "F") 5. If during conduct of TCVD or post audit the following findings have been observed, the permit to use CRM/POS and other sales machines shall be subject for revocation: a) Tampering of sales data/integrity of the data and/or software specification/features to alter/avoid the recording of a sale transaction; b) Any major repairs, upgrading, integration and modification/alteration without prior notification and approval by the BIR office concerned; c) Any violation(s) on the policies and procedures for registration under RR 11-2004 and this order. 6. The Revenue Officer who conducted the post audit shall report to the Head of Office concerned, who in turn shall issue written warning before actual revocation of Permit to Use. a) Prepare the Letter of Warning/Revocation (Annex "F"). The first warning shall be issued upon observation of the violation b) After two (2) weeks of non-compliance to the said written warning, the Letter of Warning/Revocation (Annex "F") shall be issued and the Permit to Use shall be revoked. D. PROCEDURES of RETIREMENT/SALE of Registered Machines 1. Taxpayer-user shall apply for retirement of the registered sales. machines in the RDO where the taxpayer-user is registered. 2. Upon receipt of the application for withdrawal from use, the concerned Bureau office shall cause the immediate verification of said machine and the accounting records kept in connection therewith, to ensure that all the sales data registered in the machine up to the last day it was used are properly recorded for internal revenue purposes. 3. The concerned Bureau office shall then prepare and release the Approval for Withdrawal of Sales Machines from Its Use (Annex "H"). 4. The concerned Bureau office shall likewise cancel the registration of the concerned sales machines by using the BIR web facility (detailed procedures in the application shall be included in the manual guide). 5. Upon receipt by the taxpayer-user of the 'Approval for Withdrawal of Sales Machines from Its Use', the new taxpayer-user of the sales machines may now register the sales machines. A new permit to use shall be issued, identifying the new permit number and machine identification number. VI. TRANSITORY PROVISIONS 1. If the concerned machine brand and model has not been previously accredited, but it is nonetheless compliant with the specifications provided for in RR 11-2004, the taxpayer-user shall himself register the machines to the RDO where he is registered or through the BIR electronic facilities. A systems-generated ' Provisional Permit to Use Sales Machines' (Annex "M") shall be issued in order to avail of the "immediate use" policy. A post evaluation shall be conducted within three (3) months from date of issuance of the `Provisional Permit'. 2. All suppliers of sales machines must submit on or before May 30, 2005 to the Chief, LTAD I/LTAD II/LTDO/RDO concerned an inventory of machine stocks not compliant with the provisions of RR 11-2004, together with a time table indicating when these machine stocks will be consumed and sold. VII. PENALTY CLAUSE Any taxpayer who violates the provisions of these regulations shall be subjected to immediate investigation, the provisions of these regulations to the contrary notwithstanding, in addition to the imposition of penalties pursuant to the National Internal Revenue Code and other applicable laws. VII. EFFECTIVITY This Order shall take effect immediately. (SGD.) GUILLERMO L. PARAYNO, JR. Commissioner of Internal Revenue ANNEX A SWORN STATEMENT REPUBLIC OF THE PHILIPPINES PROVINCE OF ________________ CITY/MUNICIPALITY OF _______________ I, __(Name of Authorized Representative)__, __(Nationality)_, of legal age designated as __(Position)__ of __(Registered Name of Company/Corporation)__, with business address located at ___________________________, do hereby certify the following: THAT the company is engaged in, __(line of business)_ and existing under __(business name)_, with TIN ______________. THAT the __(Type of Machine/Name of Software)_ conform to the conditions/specification requirements set by the Bureau of Internal Revenue; THAT the __(Type of Machine/Name of Software)_ has the following essential features; (Attach additional sheet if necessary) THAT in the event that the foregoing be discovered to be in violation of existing rules and regulations, I hereby undertake to face any legal sanctions and pay corresponding penalties thereof as provided for under the National Internal Revenue Code of 1997; I HEREBY DECLARE UNDER PENALTIES OF PERJURY THAT THE FOREGOING ATTESTATIONS ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE. ________________________ Name and Signature of Affiant/Authorized Representative TIN: ____________________ SUBSCRIBED and sworn to before me, in the City/Municipality of ________________, this day of ___, 20__ by _____________________ with Residence Certificate No. _________ issued at _________ on, ____________ 20__. Notary Public Doc. No. Page No. Book No. Series of _____ ANNEX B CHECKLIST OF REQUIREMENTS IN THE ACCREDITATION OF SALES MACHINES AND/OR SALES RECEIPTING SYSTEM SOFTWARE Mark check if included in documents presented ____ 1. SWORN STATEMENT containing the following information: Name, Address, business name/style and TIN/branch code, the word VAT or Non-VAT of the distributor/dealer/vendor of the machine; For CRMs: brand, model type of all its parts, whether electronic or mechanical, memory feature (whether with resettable or non-resettable accumulating grand total) and machine properties (whether new or second hand); For POS machines: brand, model, machine properties (whether new or second hand) and software to be used; Maximum accumulating sales capacity; Reset counter number (maximum digit) Other essential features ____ 2. Current Annual Registration Fee Return (BIR Form No. 0605); ____ 3. Certificate of Registration issued by the Bureau of Internal Revenue (BIR); ____ 4. Certificate of Registration of Business Name issued by the Department of Trade and Industry (DTI) in case of single proprietorship; ____ 5. Certificate of Registration issued by the Securities and Exchange Commission (SEC) in case of corporation and partnership; _____ 6. A sample receipt generated by the machine legibly showing the data required under RR 11-2004; _____ 7. A sample receipt showing the reading of the daily sales and accumulated grand total recorded in the machine; _____ 8. A Demo or Evaluation copy of the software to be used in the actual operation of the POS machines; _____ 9. The System Description and Design/Structure of the machine being submitted for accreditation; _____ 10. The Master Reset key (CRM)/password (POS), whichever is applicable, that can be used in reading sales data of all units of the particular model being accredited. _____ 11. Machine brochure; _____ 12. Operating Manual. ANNEX C CERTIFICATE OF ACCREDITATION ANNEX D LETTER OF DENIAL ON APPLICATION FOR ACCREDITATION OF SALES MACHINES AND/OR SOFTWARE _______________ (Date) ___________________ (Taxpayer) ___________________ ___________________ (Address) Sir/Madam: We regret to inform you that your Application for Accreditation of machine brand/model and/or software ( pls. specify ) has been "denied" per recommendation of the Machine Accreditation Board due to the following reason(s)/deficiency(ies): 1. 2. 3. 4. 5. Wherefore, you are hereby advised to re-configure your machine/software based on the reasons herein above stated and submit a new application together with the documentary requirements to be submitted to LTAD I/LTAD II/LTDO/RDO having jurisdiction over your head office. Very truly yours, COMMISSIONER OF INTERNAL REVENUE By: ____________________________________________ Head, (National/Regional) Machine Accreditation Board (LTAD I/ LTAD II/LTDO/RDO) ANNEX E FUNCTIONAL AND TECHNICAL EVALUATION/APPRAISAL CHECKLIST OF SALES MACHINES AND/OR SALES RECEIPTING SYSTEM SOFTWARE APPLIED FOR ACCREDITATION (For Each Model/Brand/Software) Name of Applicant (Supplier/Vendor of machine) __________________________ Business Name/Trade Name __________________________________________ Business Address __________________________________________________ TIN/Branch Code __________________________________________________ E-mail Address ___________________ Telephone Number _________________ Machine Brand/Model: ______________________________________________ Applying for Accreditation of: (Please check appropriate answer) _______ Hardware only _______ Software only _______ Hardware & Software Please specify software: __________________ DESCRIPTION/SPECIFICATION YES NO REMARKS A. Technical Aspect 1. Does the machine have a non-volatile _____ _____ __________ memory? 2. If answer to # 1 is NO, does the machine have a back-up system? Specify back-up procedures, indicate on the remarks column. _____ _____ __________ 3. Is the machine used as stand alone or linked to a server (CAS)? _____ _____ __________ 4. Does the machine have a non-resettable accumulating grand total? If yes, specify the maximum number of digits including decimal place of the accumulated grand total sales. _____ _____ __________ 5. Is the machine capable of generating at least ten (10) digits or 12 digits including decimal points for its grand total sales? _____ _____ __________ 6. Is the machine equipped with a reset counter that advances by one (1) every time the accumulating grand total is reset to zero? _____ _____ __________ 7. Is the machine capable of generating sequential number for each transaction entered? _____ _____ __________ 8. Does the machine have a minimum of 6- _____ _____ __________ digit OR number or at least a 4-digit OR number with at least 2-digits visible/ programmable reset counter? 9. Is the machine tamper-free? _____ _____ __________ 10. Can the machine be switched to `training mode" or `no sale transaction mode" or other manipulations that will avoid the recording of sale transactions? _____ _____ __________ 11. Is the machine capable of printing the words "THIS IS NOT AN OFFICIAL RECEIPT", if it is switched to "Training Mode" or `No Sale Transaction" mode? _____ _____ __________ 12. For CRM machine: are the machines equipped with two (2) rollers or their equivalent (1 tape for audit and other internal revenue purposes and the other tape to be given to the customer which shows the itemized and consecutively numbered receipts? _____ _____ __________ 13. If only one roller is used, does the machine have safety mechanisms to prevent its use? _____ _____ __________ 14. Can the data printed on the Official Receipt be preserved/stored for at least three (3) years from its issuance? _____ _____ __________ 15. When machine is punched for purposes of recording sales discounts, refunds, etc., can the machine automatically print such discount, refunds on the customer's tape receipt and the audit journal tape? _____ _____ __________ 16. For POS machines, are all sales automatically and completely recorded in a central server (back-end server)? _____ _____ __________ 17. Does the POS have a native back-up of all its sales transactions (database) and how long will the machine hold the data until such time that it is being purged? _____ _____ __________ 18. POS linked/or not linked to a server - does the machine store an Electronic Journal (EJ) in its own hard disk? _____ _____ __________ 19. Can the machine preserve the data stored in the central server for a minimum period of 3 years from the time of the transaction? _____ _____ __________ 20. Can the machines/central server generate a report showing the reading of daily sales and the accumulated grand total sales recorded therein? _____ _____ __________ 21. Will the distributor/dealer/vendor of the machine attest that BIR can view, validate and verify the machines especially on sales transactions? _____ _____ __________ 22. Is the machine capable of clearly indicating separately in words, sales that are subject to VAT & sales that are exempt from VAT (in case the user of the machine is engaged in other VATable and Non-VATable transactions)? _____ _____ __________ 23. Is the machine capable of generating a report summarizing all VAT sales and Non-VAT sales? _____ _____ __________ 24. Are the monitoring controls & verification techniques to identify voided sales & actual sales not recorded in the Proprietor's record, disclosed by distributor/dealer/vendor of the machine to the BIR? _____ _____ __________ 25. Are the following data required to be _____ _____ __________ reflected on the tape receipt or invoice _____ _____ __________ indicated on the sample print of the tape _____ _____ __________ receipt/invoice? _____ _____ __________ Business Name; Registered taxpayer's name with BIR; _____ _____ __________ TIN (12 digits including branch code); Address where the machine will be used; _____ _____ __________ Receipt/invoice Number (minimum 6 digits); _____ _____ __________ Machine Model Accreditation Number; _____ _____ __________ Date of Transaction; Quantity; _____ _____ __________ Product Description; Amount of transaction (separate totals for VAT & Non-VAT); Word "THIS SERVES AS AN OFFICIAL RECEIPT" B. Other Aspect of System 1. Is the receipt/invoice number systems generated? _____ _____ __________ 2. Does the system post the sales at the back-end at `real-time'? If not, what is the mode/time of recording the sales at the back-end? _____ _____ __________ 3. Once sales are posted at the back-end, can adjustments be done by the user/taxpayer? If yes, specify control mechanism of the machine/system that can detect such adjustments. _____ _____ __________ 4. Is there a report that will show summary of adjustments, void transactions, etc.? _____ _____ __________ 5. Can the sales report be generated at anytime? _____ _____ __________ 6. Does the computer application system prevent users from having the capability to override edits within computer programs? _____ _____ __________ 7. Is the system capable of detecting the user of the machine at anytime or does the system have an activity log or transaction log? Individual that created the transactions? _____ _____ __________ 8. Does the system automatically total and double-check/cross-check totals of all accounts and report an out-of-balance condition? _____ _____ __________ 9. Is the system capable of generating reportorial requirement of BIR such as but not limited to: Daily sales with classification as to the type of sales _____ _____ __________ Accumulated grand total sales with classification (i.e. cash sales, credit card sales, gift check sales, etc. _____ _____ __________ List of voided transactions _____ _____ __________ List of adjustments made to sales _____ _____ __________ RECOMMENDATION: (please check) ______ Approved ______ Disapproved Reason/s: _____________________________________ _____________________________________ _____________________________________ National/Regional Accreditation Board: _________________________ _______________________ Member Member (Representative LTAD I/LTAD (Representative LTAID I/LTAID II/TSS-LTDO/RDO) II/Assessment Section -LTDO/RDO) _______________________ _______________________ Member Asst Head, NMAB/RMAB (RDC/ISOS-DC Representative) (Chief, CONED) _______________________ Head, Accreditation Board (Chief, LTAD I & II/LTDO/RDO) ANNEX F LETTER OF WARNING/REVOCATION ANNEX G JOINT SWORN STATEMENT ______________________ Date The Revenue District Officer Revenue District No. ______ ______________________ Sir: Pursuant to Revenue Regulations No. ________, dated ___________, please be informed that Sales Machine (pls. specify), Brand _________, Model _________, Serial No. _________, has been repaired. It will be re-used on ______________. 1. Kind of Machine Electronic _____ Mechanical ______ 2. Name of taxpayer and/or business using machine _______________________________ 3. Address of taxpayer and/or business where the machine is used _______________________________ 4. Date repair started and finished Before Repair After Repair 5. Reset Counter No. _____________ ______________ 6. Accumulated grand total sales _____________ ______________ 7. Last and beginning receipt numbers _____________ ______________ Explanation of variation in the detector or reset counter number and accumulated grand total sales in the machine before and after repair, and also, if the receipt number after repair is not consecutive to the last receipt number before repair. (use additional sheets if necessary). (1) _________________________ (2) _________________________ Person/Company Repairing Taxpayer-User TIN ________________ TIN ______________ SUBSCRIBED AND SWORN TO before me this ______ day of __________, 20___, affiants exhibited to me their Community Tax Certificate Nos. _________ and _______________, issued at _________ and ____________, on ______________, 20___, and _________________, 20 ___ respectively. ________________________________ Officer Authorized to Administer Oath Doc. No. :____ Book No. :____ Page No. :____ Series of :____ ANNEX H APPROVAL FOR WITHDRAWAL OF SALES MACHINES FROM ITS USE (Retirement/Sale) ________________ Date Sir/Madam: Your request to withdraw from use your sales machine (pls. specify), as of __________________________, described hereunder is hereby granted: Brand ____________________________________ Model ____________________________________ Serial No. _________________________________ BIR Permit No. _____________________________ Verification of the said machine and the accounting records kept in connection therewith, as of the last day it was used, disclosed the following: Reset Counter No. ___________________________ Accumulated Grand Total Sales _________________ Number of the last receipt issued ________________ Very truly yours, _______________________ Chief LTAD I & II/LTDO/RDO ANNEX I LIST OF SALES OF MACHINES SOLD TO BE REGISTERED PER TAXPAYER-USER ANNEX J PERMIT TO USE SALES MACHINES ANNEX K DECAL ANNEX L LIST OF SALES OF MACHINES FOR REGISTRATION ANNEX M PROVISIONAL PERMIT TO USE SALES MACHINES ANNEX N LIST OF SPECIAL PURPOSE MACHINES FOR REGISTRATION ANNEX O PERMIT TO USE SPECIAL PURPOSE MACHINES ANNEX P STICKER FOR SPECIAL PURPOSE MACHINES