Penalties for Failure or Refusal to Issue Receipts or Sales or Commercial Invoices

October 25, 1978 REVENUE REGULATIONS NO. 16-78 SUBJECT : Penalties for Failure or Refusal to Issue Receipts or Sales or Commercial Invoices, for Violations Related to the Printing of Such Receipts or Invoices and for Other Violations of Section 220-A of the T ax Co de TO : All Internal Revenue Officers and Others Concerned Pursuant to the provisions of Sec. 326 and Sec. 4 of the National Internal Revenue Code of 1977, as amended, in relation to Section 220-A of the same Code, these Regulations are hereby promulgated: SECTION 1. Definition of Terms and Phrases. For purposes of these Regulations, the following terms and phrases are defined as follows: a. "First offense" refers to a first violation of any of the provisions of Section 220-A of the Tax Code which is reported to the BIR and/or charged in the Fiscal's Office, whether or not terminated by compromise; or a first violation which has been prosecuted in court and resulted in conviction. b. "Second offense" is any violation of the provisions of Section 220-A committed after the first offense. c. "Subsequent offenses" are violations committed after a conviction for a second offense. SECTION 2. Compromise. Pursuant to Sec. 295 of the National Internal Revenue Code, the Commissioner may compromise a first violation of any of the provisions of Sec. 220-A, other than one involving fraud, before the case is filed in court. cdt Where the case involving the first violation is already filed in the Fiscal's Office for preliminary investigation the same may be compromised by the Commissioner upon prior consultation with the Fiscal. The criminal liability arising from the second and subsequent offenses cannot be compromised. cdta SECTION 3. Violation penalized under Sec. 220-A of the Tax Code. a) FAILURE OR REFUSAL TO ISSUE RECEIPTS OR SALES OR COMMERCIAL INVOICES. There is failure to issue a receipt or sales or commercial invoice when the taxpayer required to issue the same fails to issue such receipt or invoice at the time the transaction is effected. There is refusal to issue a receipt or sales or commercial invoice when the taxpayer required to issue the same refuses to issue the required receipt or invoice at the time the transaction is effected. The person required to issue a receipt or invoice is not relieved of the obligation to issue the same by the mere failure of the buyer, customer or client to ask or demand for one. The mere absence of registered receipts or invoices in the place of business of the person required to issue the same or his failure to provide himself with registered receipts or invoices before actually engaging in business or in the practice of a profession shall constitute a prima facie presumption of his failure and/or refusal to issue receipts and invoices. b) ISSUANCE OF RECEIPTS THAT DO NOT TRULY REFLECT AND/OR CONTAIN ALL THE INFORMATION REQUIRED TO BE SHOWN THEREIN. Pursuant to Secs. 216 and 216-A of the Tax Code, as amended, a receipt, or sales or commercial invoice, shall be prepared at least in duplicate and must contain the following information: 1. As to the prescribed form of the receipt or invoice: a) Name, business style, if any, and business address of the taxpayer; b) Tax Account number of taxpayer; c) Serial number of receipt or invoice; d) Name and address of printer; e) Authority number of printer and date of issue; 2. As to contents: a) Date of transaction; b) Quantity, unit and total cost and description of merchandise or nature of service; and (1) where the total sale, receipt or transfer is valued at P100.00 or more or (2)where the sale or transfer is made by producers, manufacturers, importers, wholesalers or (3) where the receipt is issued to cover payment made as rentals, commissions, compensations or fees, the receipt or invoice shall further show the name, address and business style, if any, of the purchaser, customer or client. Any person who issues a receipt or sales or commercial invoice which does not contain or reflect the above data, commits a violation of the provisions of Sections 216 and 216-A in relation to Section 220-A of the Tax Code. c) POSSESSION OR USE OF UNREGISTERED RECEIPTS OR INVOICES. A receipt is unregistered if it is not registered in accordance with the provision of Sec. 216 -A of the Tax Code, as amended, and Rev. Reg. No. 2-78. The mere possession of unregistered receipts or invoices is punishable under Sec. 220-A of the Tax Code. The use or issuance of unregistered receipts or invoices is likewise a violation punishable under the same section of the Code. d) POSSESSION OR USE OF MULTIPLE OR DOUBLE RECEIPTS OR INVOICES. Multiple or double receipts or invoices exist when there are more than one set of receipts or invoices of the same kind and bearing the same serial numbers, whether or not, any or all sets were printed with authority and/or registered. The mere possession of multiple or double receipts or invoices is punishable under Sec. 220-A of the Tax Code. The use or issuance of multiple or double receipts or invoices is likewise a violation punishable under the same section of the Code. e) PRINTING, CAUSING, AIDING OR ABETTING IN THE PRINTING OF 1. Receipts or invoices without authority from the BIR; 2. Double or multiple sets of receipts or invoices; 3. Unnumbered receipts or invoices; 4. Receipts or invoices not bearing the name, business style, taxpayer account number and business address of the person or entity to use the same; 5. Receipts or invoices not bearing the name, address, date and number of authority of the printer. f) FAILURE OF PRINTER TO SUBMIT THE REQUIRED QUARTERLY REPORT UNDER SEC. 216 -A OF THE TAX CODE. The requirement provided for under Sec. 216-A of the Tax Code is mandatory. Failure, therefore, on the part of the printer to submit within twenty (20) days from the end of every calendar quarter a report containing the names, addresses and taxpayer account numbers (TAN) of the persons or entities for whom receipts or invoices were printed during the preceding quarter and the quantity of receipts or invoices printed and the serial numbers of the receipts or invoices in each booklet, makes him liable to the penalties provided for under Sec. 220-A of the Tax Code. SECTION 4. Persons Liable; Penalties. Any person who commits any of the acts or omissions enumerated under Sec. 220-A of the Tax Code is liable to the penalties prescribed therein. An employer is also liable for the acts or omissions of his employees. In the case of associations, partnerships, or corporations, the penalties herein prescribed shall be imposed upon the partners, president, general manager, branch manager and/or officer-in-charge as well as the employee directly responsible for the violation. A printer is liable for the acts enumerated in the same Section of the Tax Code and for failure to submit the required quarterly report under Section 216-A of the Tax Code. The following are the penalties under Sec. 220-A: "a. For the first offense A fine of not more than two hundred pesos and imprisonment of not more than six months; "b. For the second offense A fine of not less than two hundred pesos but not more than three thousand pesos and imprisonment of not less than six months but not more than three years; "c. For subsequent offenses A fine of not less than three thousand pesos but not more than six thousand pesos and imprisonment of not less than three years but not more than six years, and cancellation of license to do business." In case the offender is an alien, or a public officer or employee, he shall, aside from being meted out the above penalties, suffer the additional penalties of: a) Deportation without further proceedings after service of his sentence, if the offender is an alien; and b) Dismissal from public service and perpetual disqualification from holding any public office, if the offender is a public officer or employee. In the case of a professional, he shall be reported to the Professional Regulation Commission or the proper regulatory body for disciplinary action, which may include suspension or absolute revocation of his license to practice his profession. SECTION 5. Repealing Clause. All regulations, rules, orders or portions thereof contrary to or inconsistent with the provisions of these regulations are hereby modified and/or repealed accordingly. ALFREDO PIO DE RODA Acting Minister of Finance Recommended by: EFREN I. PLANA Acting Commissioner