In late 2024, the Philippine government enacted the CREATE MORE Act, introducing several amendments to the Tax Code, including changes to e-invoicing and to the CTC e-reporting system. The Act removed the five-year deadline for the government to implement e-invoicing and CTC e-reporting – originally set by the TRAIN Law – and introduced tax deduction benefits for taxpayers who adopt e-invoicing and e-reporting.
Following this, the Bureau of Internal Revenue (BIR) published a draft Revenue Regulation proposing additional amendments to the Tax Code’s e-invoicing and CTC e-reporting provisions.
The Draft proposes the following main changes:
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Revised e-invoicing and Electronic Sales Reporting System definitions: An e-invoice must be in a structured data format that can be easily extracted and transmitted electronically to the BIR in compliance with the CTC e-reporting obligation. Non-structured formats will no longer be considered as e-invoices.
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Expanded scope of taxpayers: The proposal broadens the mandate beyond large taxpayers, taxpayers engaged in e-commerce and exporters, to include:
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Taxpayers using Computerized Accounting Systems (CAS), Computerized Accounting Books (CBA), and any other invoicing software
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Registered Business Enterprises benefiting from tax incentives of Section 304(D) of the Tax Code
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Taxpayers using Point-of-Sale (POS) systems
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Other taxpayers as required by the BIR Commissioner
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Tax deductions benefits: Taxpayers who issue and report invoices electronically – whether required or voluntary – may qualify for income tax deductions:
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For micro and small taxpayers: 100% of the cost of setting up an electronic sales reporting system.
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For medium and large taxpayers: 50% of the cost of setting up an electronic sales reporting system.
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Exemption for micro taxpayers: Micro taxpayers under the mandatory scope are exempt from the CTC e-reporting obligation but may choose to comply voluntarily.
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Penalties for non-compliance: Failure to comply with e-invoicing and CTC e-reporting obligations will result in penalties under Section 264-A of the Tax Code, already applicable to failure in transmitting sales data from CRM and POS systems to the BIR.
Unspecified deadlines
The draft does not set a timeline for expanding CTC e-reporting beyond the 2022 pilot program, which included 100 large taxpayers. However, businesses within the expanded scope must comply once a BIR-ready system is available. It remains unclear whether the current e-invoicing system (EIS) used in the pilot phase meets this requirement.
The proposal is still in draft form and open for public comments via email to create_more@bir.gov.ph.
