Revenue Regulation (RR)  7-2024:  Transition from Official Receipts to Invoice – 2024 Guide

The Bureau of Internal Revenue (BIR) sent an email regarding Official Receipts. In accordance with RR No. 7-2024, Official Receipts must be converted to Invoices for documenting sales transactions.

Do you aim to have your existing receipts updated in compliance with the now-implemented BIR Revenue Regulations No. 7-2024? This article will detail the necessary steps towards that.

• What is an Invoice?
• How does a Supplementary Document differ from an Invoice?
• Who must issue an Invoice?
• What happens to your current Official Receipts?
• What are the requirements for updating the Official Receipts to an Invoice?
• How Can InCorp Help You? 
• Frequently Asked Questions

Definition of Invoice

It is a written proof or document evidencing the sale of goods and/or services and issued to customers or buyers in the ordinary course of trade or business. Invoices are often classified as either a “sales invoice,” “service invoice,” “cash invoice,” “charge/credit invoice,” or a “miscellaneous invoice.” Invoices, depending on the sale of goods or services if they are subject to Value-Added Tax, are then categorized as either a VAT Invoice or a Non-VAT Invoice.

The VAT Invoice shall be the basis of the output tax liability of the seller and the input tax claim of the buyer, while the Non-VAT Invoice shall be the basis of the Percentage Tax liability of the seller if applicable.

Additionally, invoices may generally serve as the written confirmation or acknowledgment of the fact that money has been received for the payment of goods sold or services rendered.

Difference between Supplementary Document and Invoice

On the other hand, a Supplementary Document is a written document, separate from an invoice, that provides financial transaction entries in an individual or company’s books of accounts. Such supplementary documents are credit memos, purchase orders, acknowledgment receipts, and billing statements, to name a few. The previously mandatory Official Receipts now fall under the Supplementary Document classification.

Consequently, for VAT purposes, Supplementary Documents are not valid proof for the claim of input taxes by buyers of goods and/or services. Thus, Official Receipts will no longer serve as evidence for claiming input taxes.

Invoice Issuance

Apart from registering under the BIR and securing a Certificate of Registration, all business taxpayers must strictly comply with the issuance of an invoice. Business taxpayers are all persons engaged in the business or practice of a profession, self-employed and professionals not under employer-employee relationship, juridical entities, and online sellers, including those engaged in providing digital goods and/or services.

When it comes to manual issuance of invoices, business taxpayers must obtain a BIR Form 1921 or an Authority to Print or avail of the BIR Printed Invoices. On the other hand, business taxpayers who process their invoices through computer-aided issuance must secure the Permit to Use Loose Leaf invoices along with the BIR Form 1921. Business taxpayers with a Computerized Accounting System (CAS) and/or components thereof must secure the Acknowledgement Certificate.

Lastly, all business taxpayers must secure their “Notice to Issue Invoices” from their respective BIR Revenue District Offices.

What Happens to Official Receipts

Past June 30, 2024, all unused or unissued Official Receipts may still serve as supplementary documents until fully consumed by the business taxpayer. However, the phrase “THIS DOCUMENT IS NOT VALID FOR CLAIM OF INPUT TAX” must be stamped on the face of the Official Receipt.

Requirements for Updating Official Receipt to Invoice

Alternatively, business taxpayers may opt to convert their remaining Official Receipts as Invoice through the following:

• Putting a strikethrough over the word “Official Receipt” on the face of the manual and loose leaf receipt
• Stamping the words “Invoice,” “Invoice,” “Invoice,” “Invoice,”  or any name describing the specific transaction must be stamped on the receipt and this can be issued as the primary invoice to the buyer.
• Submission of an Inventory List of Unused Official Receipts to be Used as Invoices (before June 30, 2024)
• Note, however, that the usage of the converted invoices is only permissible up until December 31, 2024.

How Can We Help You

In order to fully complete the transition of your company’s use of Official Receipts into Invoices, we can offer assistance on the following matters:

• Swift preparation and processing of the Inventory list of Unused official receipts to be Used as Invoices before the June 30, 2024, deadline
• Application of the new BIR Form 1921 (Authority to Print) for Printing and Issuance of Invoices