Should the taxpayers and concerned citizens understand the Definition of Terms stated in Revenue Regulations (RR) No. 7-2024?
In connection with the "Ease of Paying Taxes Act", the bureau has issued Revenue Regulations (RR) No. 7-2024 of the Registration Procedures and Invoicing Requirements.
The Definition of Invoice and Supplementary Documents is stated in Section 2 of the RR No. 7-2024 as follows:
SECTION 2. Definition of Terms -
1. Invoice - it is a written account evidencing the sale of goods and/or services issued to customers in the ordinary course of trade or business. This is includes Sales Invoice, Commercial Invoice, Cash Invoice, Charge/Credit Invoice, Service Invoice, or Miscellaneous Invoice. It is also referred to as a "principal invoice" and is categorized as follows:
1.1 VAT Invoice - it is a written account evidencing the sale of goods, properties, services and/or leasing of properties subject to VAT issued to customers or buyers in the ordinary course of trade or business, whether cash sales or on account (credit) or charge sales. It shall be the basis of the output tax liability of the seller and the input tax claim of the buyer or purchaser.
1.2 Non-VAT Invoice - it is a written account evidencing the sale of goods, properties, services and/or leasing of properties not subject to VAT issued to customers or buyers in the ordinary course of trade or business, whether cash sales or on account (credit) or charge sales. It shall be the basis of the Percentage Tax liability of the seller, if applicable.
Invoice may also sere as a written admission or acknowledged of the fact that money has been paid and received for the payment of goods or services.
2. Supplementary Document - it is a written document, other than sales or commercial invoice, which serves as source of accounting entries in the books of accounts.
This includes but not limited to official receipt, delivery receipt, order slip, debit and/or credit memo, purchase order, acknowledgement or cash receipt, collection receipt, bill of lading, billing statement, statement of account and any other documents, by whatever name it is known or called, whether prepared manually (hand written information) or preprinted/pre-numbered loose leaf (information typed using spreadsheet program or typewriter) or computerized as long as they are used in the ordinary course f business and being issued to customers or otherwise.
For purposes of VAT, Supplementary Documents are not valid proof to support the claim of input taxes by the buyers/purchasers of goods and/or services.
Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202024/RR%20No.7-%202024.pdf of the full text of RR No. 7-2024
