[Ask the Tax Whiz] BIR e-invoicing: Is your company ready for December 31?

The Philippine Tax Whiz explains what RMC No. 98-2026 means for large taxpayers, multinational companies, and digital businesses—from permits and system requirements to branch coverage and billing errors.

Your company may already issue thousands of invoices through a global accounting system. But can it generate structured invoice data, deliver invoices electronically, and meet Philippine authorization requirements?

Under Revenue Memorandum Circular No. 98-2026, covered taxpayers must comply with electronic invoicing requirements on or before December 31, 2026.

For chief financial officers, tax directors, and technology teams, this is a business readiness issue. It affects billing, customer records, accounting systems, and the controls that keep transactions accurate and traceable.

1. Who must comply?

The circular identifies the following covered taxpayers, subject to its exemption for micro taxpayers:

• Small, medium, and large taxpayers engaged in e-commerce or internet transactions;
• Taxpayers under the jurisdiction of the Large Taxpayers Service (LTS);
• Taxpayers classified as large under the Ease of Paying Taxes Act and RR No. 8-2024;
• Taxpayers using a Computerized Accounting System (CAS), Computerized Books of Accounts with Accounting Records with electronic invoicing, or other invoicing software; and
• Other taxpayers required by the Commissioner of Internal Revenue.

Companies should assess each applicable category. Being outside the Large Taxpayers Service (LTS) does not, by itself, establish exemption.

The definition of e-commerce also extends beyond online retail. It includes commercial transactions involving physical or digital goods and services conducted through electronic networks.

2. Does the requirement cover foreign companies and multinational groups?

A Philippine subsidiary or registered branch should assess its own taxpayer classification, activities, and invoicing systems. Foreign ownership or the use of a regional billing center does not replace that assessment.

For multinational groups, the practical questions are: Which entity makes the sale? Which entity issues the invoice? Does its system meet Philippine requirements?

Nonresident digital service providers require a separate analysis. RR No. 3-2025 contains specific invoicing rules for nonresident VAT-registered providers, allowing electronic sales or commercial invoices that need not be registered with the BIR, provided prescribed information and language requirements are met. Companies should therefore avoid assuming that the domestic PTI process automatically applies to every overseas platform selling to Philippine customers. 

3. Is an emailed PDF already a valid electronic invoice?

An emailed PDF alone does not establish compliance.

Under RMC No. 98-2026, an electronic invoice must:

• Be generated through duly registered, approved, or accredited accounting or invoicing software in a structured electronic format;
• Be electronically generated and delivered through recognized electronic channels, such as email, online viewing, QR codes, applications, or web platforms; and
• Contain data capable of electronic extraction, processing, and transmission to the BIR for sales reporting.

Invoices manually prepared using Word, Excel, Google Docs, Google Sheets, or similar productivity applications do not qualify.

A PDF may serve as the customer-facing copy of a compliant system-generated invoice. The underlying structured data and system capabilities remain essential.

Printed copies are also allowed under the circular and must be provided upon the buyer’s request. Printing an invoice does not cure a system that lacks the required electronic capabilities.

4. Must every covered company start transmitting sales data to the BIR by December 31?

The circular separates electronic invoice issuance from electronic sales reporting.

Electronic invoicing concerns generating and issuing compliant invoices. Electronic sales reporting concerns transmitting sales data to the BIR.

Under RMC No. 98-2026, the electronic sales reporting obligation for the covered taxpayers is subject to the BIR’s issuance of implementing policies, guidelines, and procedures. The requirement to secure a Permit to Transmit applies upon notification or directive from the Commissioner.

Companies must prepare systems capable of transmission, but should not confuse that technical capability with an across-the-board reporting commencement date.

5. What permits and certification are required?

Taxpayers must secure a Permit to Issue (PTI) Electronic Invoice before generating or issuing electronic invoices.

The application must be filed with the Revenue District Office or Large Taxpayer Office where the taxpayer is registered, supported by the prescribed documents. The circular provides for evaluation and determination of compliance within 20 working days from receipt of complete documents.

An existing CAS Permit to Use or Acknowledgement Certificate does not, by itself, authorize electronic invoice issuance.

Taxpayers must also obtain Electronic Invoicing and Sales Reporting (EIS) Certification within six months from PTI issuance. Failure to obtain certification constitutes grounds for PTI revocation.

The certification validates the system’s ability to extract, process, and transmit sales data according to BIR standards. Technical specifications and guides are available through the EIS Certification Portal⁠.

The six-month certification period should not be treated as an extension of the December 31 invoicing deadline.

6. Can we retain our global ERP or existing billing platform?

The circular allows an in-house solution, commercially acquired software, or services offered by an Electronic Invoicing Service Provider (ESP).

It also permits businesses to retain other structured formats for internal operations, provided the required sales data can be converted into and transmitted using the BIR-prescribed format. The existing EIS uses JavaScript Object Notation, or JSON, for sales data transmission.

For multinationals, this means assessing whether the current enterprise resource planning system can support Philippine requirements through configuration or integration.

As a practical readiness exercise, finance and IT teams should test customer and taxpayer identifiers, branch information, VAT treatment, discounts, withholding tax details, invoice references, and reconciliation with accounting records.

The circular reserves ESP policies and guidelines for a separate issuance. Businesses should verify a provider’s claimed authorization and distinguish vendor marketing from the taxpayer’s own permit and certification requirements.

7. Do all branches need to comply?

Yes. Where the taxpayer is covered, compliance extends to its head office and all registered branches, even if the covered activity takes place only at a particular branch.

The circular provides for PTIs for the head office and individual branches bearing the same PTI number and identifying the relevant branch. However, each distinct invoicing system requires a separate PTI, identifying the offices or locations authorized to use it.

Changes to the approved platform or core system details—including migration or replacement—require a new or amended PTI, as applicable.

For corporations with multiple billing platforms, mapping systems to branches and business units should therefore be an early implementation step.

8. What happens during outages, cyber incidents, or system failures?

The obligation to issue invoices continues.

Where an interruption prevents electronic invoice issuance, the taxpayer must issue a BIR-authorized manual invoice. Once the system is restored, the manual invoices must be replaced with corresponding electronic invoices bearing their reference numbers.

For businesses, this calls for a documented contingency procedure: authorized manual invoices, clear staff responsibilities, and reconciliation after restoration to prevent missed or duplicate recording of sales.

9. Can an incorrect electronic invoice be edited or deleted?

No. Issued electronic invoices cannot be deleted, altered, or modified.

Corrections must use a separate document referencing the original invoice:

• A decrease in the amount requires a duly authorized credit note or credit memo.
• An increase requires a new electronic invoice.

If an invoice incorrectly states ₱50,000 instead of ₱5,000, a ₱45,000 credit note or memo corrects the overstatement while preserving the original record.

Companies should review whether their billing systems permit users to overwrite issued invoices. Approval controls and traceable adjustments are particularly important for high-volume billing, refunds, and subscription changes.

10. What if the company’s taxpayer classification changes?

Moving to a lower classification does not automatically end the obligation. A covered taxpayer must continue complying unless the BIR expressly provides otherwise through a separate issuance.

For upward reclassification, the circular refers to a compliance period prescribed by the BIR that must not be less than six months from reclassification. This should not be described as a universal requirement to comply “within six months.”

What should corporate leaders do now?

Assign a joint finance, tax, and IT team to confirm coverage, map invoicing systems and branches, identify required changes, prepare PTI applications, and schedule certification testing. Include invoice corrections and outage recovery in testing—not just successful invoice generation.

Electronic invoicing can improve transaction visibility, reduce manual reconciliation, and strengthen tax administration. But implementation must also deliver clearer rules, secure systems, and less repetitive compliance.

For companies navigating complex systems or uncertain requirements, investing in advice from qualified tax experts early can help identify compliance gaps, prevent costly mistakes, and avoid unnecessary penalties and stress.

Electronic invoicing should make honest compliance easier—and deliberate tax evasion harder. Its success should translate into better data, simpler processes, and a more predictable environment for business and investment.

For more tax information and inquiries, visit www.acg.ph⁠.