e-Invoicing in the Philippines: Timeline, Guidelines, Process, and Steps for Implementation

The Philippines has been making steady progress towards going digital with its taxation in the form of e-Invoicing. It was first introduced by the Tax Reform for Acceleration and Inclusion (TRAIN) Act of 2018, which required large taxpayers and exporters to issue e-Invoices and transfer sales data to the Bureau of Internal Revenue (BIR) within five years. 

Then, in July 2022, the scope was extended and made e-Invoicing mandatory for the top 100 taxpayers, including government invoices (B2G). Moving forward, in 2024, the BIR imposed mandatory e-Invoicing for the majority of its taxpayers. The system adopts the Electronic Invoicing/Receipting System (EIS) based on a structured XML or JSON format. This blog covers the e-Invoicing timeline, guidelines, process, and implementation steps to help businesses remain compliant.

What is e-Invoicing in the Philippines?

e-Invoicing in the Philippines refers to the electronic transmission of sales invoices or official receipts between a buyer and a supplier. It is managed by the Bureau of Internal Revenue (BIR). The system caters to B2B invoices and B2C receipts, as well as credit and debit notes under the TRAIN Act. Invoices need to be presented in the JSON format through the Electronic Invoicing/Receipting System (EIS) either manually or by a shared API. Invoices also need to be signed digitally and kept for 10 years. 

e-Invoice Implementation Timeline

e-Invoice implementation in the Philippines was carried out in a phased approach. Here’s a quick overview of the same: 

e-Invoicing Process in the Philippines

Here are the key steps involved in the creation and transmission of e-Invoices to the EIS portal of BIR: 

1. Issuing an e-Invoice: Create the electronic receipt or invoice in JSON format using any invoice software. Add sales invoices, official receipts, credit and debit notes, and other accounting documents as the case may be. Digitally sign the document to authenticate its origin.
2. Accessing the EIS Portals: The system contains three principal portals:

• EIS Taxpayer Portal: For uploading and maintaining invoices.
• EIS Certification Portal: For registration and compliance certification.
• EIS Portal for Revenue Officers: For BIR officials to monitor and verify data.

To create an account, upload a scanned copy of one of the following (in jpg/jpeg/pdf format): Board Resolution or Secretary's Certificate (for corporations) or Special Power of Attorney (for individuals) and an authentic government-issued ID. Moreover, businesses will also need a TIN number. 

3. Submitting the e-Invoice to the EIS: There are two ways to submit electronic documents to the Electronic Invoicing System (EIS). First is manually uploading documents directly through the EIS Taxpayer Portal or using the common API for automated submission of data. 
4. Reporting Sales Data: Ensure to follow these guidelines while reporting the sales data: 

• Transmit data in real time or within three calendar days.
• Maximum 1,000 line items per invoice.
• All these documents should be submitted in a JSON file format. 

e-Invoicing Compliance Guidelines

To ensure compliance with e-Invoicing regulations in the Philippines, follow these key points:

• Submit invoices in JSON/XML format with a digital signature.
• Report sales data within 3 calendar days of the transaction.
• Archive e-Invoices for 10 years.
• Register on the EIS Certification Portal and upload the required authorization documents.

Who Needs to Comply with e-Invoicing in the Philippines?

As per Sections 237 and 237-A of the Tax Code of 1997 (as amended), the following taxpayers shall be given electronic receipts or invoices instead of manual receipts or invoices and remitting sales information electronically to the Bureau:

• Taxpayers who are exporting goods and/or services.
• Taxpayers who are engaged in e-commerce.
• Taxpayers subject to the Large Taxpayers Service (LTS) mandate.

Furthermore, the BIR proposed a draft revenue proposal to cover more entities apart from the aforementioned. These are as follows: 

• Businesses using digital accounting systems such as CAS, CBA, or other invoicing software.
• Registered Business Enterprises (RBEs) with tax incentives under Section 304(D).
• Taxpayers using POS systems.
• Other taxpayers as required by the BIR Commissioner.

Benefits of e-Invoicing in the Philippines

Here are the multiple benefits of e-Invoicing: 

• Improved Accuracy: Avoids manual errors and maintains correct data entry.
• Improved Processing Speed: This facilitates quick invoice preparation and submission.
• Cost-Effectiveness: Reduces paperwork and costs related to it.
• Transparency: It provides real-time reporting and tracking of transactions.
• Fraud Prevention: Allows for VAT fraud prevention through electronic records.

Moreover, BIR has also proposed several deductions for entities implementing e-Invoicing systems. These deductions are as follows: 

• 100% cost deduction for micro and small enterprises while setting up an electronic sales reporting system. 
• 50%  cost deduction for medium and large enterprises while setting up an electronic sales reporting system. 

Penalties for Non-Compliance

Non-compliance with e-Invoicing and CTC e-reporting requirements shall be penalized under Section 264-A of the Tax Code.

How can ClearTax help a business with e-Invoicing in the Philippines?

ClearTax, a reliable e-Invoicing solution provider, helps companies follow the Philippines' e-Invoicing rules by providing:

• Simple ERP & POS Integration: Invoices are automatically generated and forwarded to the BIR.
• Real-Time Compliance Checks: Ensures that invoices meet the Philippines' e-Invoicing compliance standards.
• Cloud-Based e-Invoicing Platform: Automates invoice tracking, reconciliation, and invoice management.
• Automated Reporting & Compliance Alerts: Eliminates the risk of late filing or non-compliance penalties.

Conclusion

e-Invoicing in the Philippines is revolutionizing the way companies handle invoicing and tax compliance by making the whole process automated. It involves creating, sending, and storing invoices digitally and ensuring timely and correct reporting to the Bureau of Internal Revenue (BIR).

Businesses can simply create compliant invoices and automate the reporting using ClearTax's end-to-end e-Invoicing feature, which smoothly integrates with the existing systems. Stay compliant and simplify your invoicing with ClearTax today!