7.RMC 71-03 CAS Procedures QandA

(1)
June 23, 2003
REVENUE MEMORANDUM CIRCULAR NO. 71-03
SUBJECT : Clarification of Issues Affecting the Revised Procedures in

the Processing and Approval of Applications for Permit to
Adopt Computerized Accounting System (CAS) or
Components Thereof per RMO No. 29-2002
TO : All Internal Revenue Officials and Employees and Others

Concerned
This Circular aims to supply basic information and provide uniform

answers to issues affecting policies on revised procedures in the processing and
approval of application for permit to adopt Computerized Accounting System
(CAS) or Components thereof.
Q-1 What is a CAS?
A-1 It is the integration of different component systems to produce computerized

Books of Accounts and computer generated accounting records and
documents. (RMO 29-2002)
Q-2 What are the components of CAS?
A-2 The components of CAS are:
1. General Journal and other subsidiary records
(Note: For General Ledger, though it is a component of CAS, taxpayer must

apply for Permit to Adopt a complete CAS)
2. Sales Book, Purchases Book, Accounts Receivable Book, Accounts

Payable Book, Inventory Book, Payroll Ledgers, Subsidiary Ledgers and
other accounting records
3. Any application system which generates subsidiary ledger and is part

of official accounting documents such as official receipts (OR), sales and
cash invoices, cash vouchers, journal vouchers, billing statements, sales
tickets, etc.
Copyright 2020 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Taxation Encyclopedia Second Release 2020 1
4. Any application system which generates reports required by the BIR
(e.g. a separate report for void and suspended transactions to explain the
deduction from sale, compilation of their integrated/consolidated sales
report produced every end of the day); and
5. Point of Sale (POS) Machine/Cash Register Machine (CRM)

connected to a network or linked to CAS. (RMO 29-2002)
Q-3 Who are required to apply for a Permit to Adopt CAS or Components
Thereof?
A-3 1. Taxpayers who will use/adopt:
• A complete CAS
• Any or some of the components of CAS
• e-Invoicing System
2. Taxpayers with valid permits to adopt CAS or component/s thereof

but made systems enhancement/modification that result to change in
system release and/or upgrade in version number. (RMO 29-2002)
Q-4 Who shall apply for permit to use CAS or components thereof if taxpayers’
consultants provided the system?
A-4 Taxpayers whose CAS are provided by their consultants (e.g. accounting
firms) shall apply for a separate permit for the use thereof. (RMO 29-2002)
Q-5 In cases of affiliated companies, sister companies, franchisees and closely

held corporations, who shall apply for Permit to Use CAS or Components
thereof?
A-5 Affiliated companies, sister companies, franchisees and closely held

corporations shall secure separate permits for the use of CAS at LTAD I or
II, LTDO or RDO. This requirement is without regard whether they are
sharing a server and using exactly the same system previously approved
for use by its mother company or other sister companies. (RMO 29-2002)
Q-6 Where should taxpayers apply for permit to adopt CAS or components
thereof?
A-6 All applications for CAS or components thereof whether by Head Office or
Branches shall be filed by the Head Office at the Large Taxpayer
Assistance Division (LTAD) I or II, Large Taxpayer District Office
(LTDO) and Revenue District Office (RDO) having jurisdiction over the
taxpayer’s Head Office except in the following cases:
• In case the branch adopts CAS ahead of the Head Office, the
application shall be filed by the Branch with the RDO having
jurisdiction over the branch with a certification that the Head Office
does not use a CAS. In the event that the Head Office later adopts the
same CAS and the branch with a previously issued permit shall be
linked to it, the permit to be issued to the Head Office shall include a
new permit for the said branch, which shall supersede the previously
issued permit.
• In case the branch adopts a different CAS from that of its Head
Office, it shall apply for permit to adopt CAS at the BIR office
having jurisdiction over the branch (RMO 29-2002)
Q-7 When should the application be filed?
A-7 The application for permit to use CAS should be applied before the system is
used or the enhanced system is adopted.
Q-8 What are the documents required to be submitted in applying for Permit to
Use CAS?
A-8 1. Accomplished BIR Form 1900 and/or BIR Form 1907
2. Photocopy of BIR Certificate of Registration
3. Photocopy of Previously Issued Permit, if applicable
4. Photocopy of Current Registration Fee Payment
5. Location map of the place of business
6. Inventory of previously approved unused invoices and receipts, if

applicable
7. List of branches that will use CAS, if any
8. Application Name and Software used (Development and Database)
9. Functions and Features of the Application
10. System Flow/s
11. Process Flow
12. Sworn Statement & Proof of System Ownership
13. Back-up Procedure, Disaster and Recovery Plan
14. List of Reports and Correspondences that can be generated from the
system with their description, purpose and sample lay out
15. Facsimile of System Generated Loose-leaf Books of Accounts and

List thereof, Receipts/Invoices
16. Photocopy of previously issued permit of mother/sister company,

another branch using the same system, if applicable
17. Certification from Computerized System Evaluation Team (CSET)

which previously evaluated the approved system, if applicable (RMO
29-2002)
Q-9 Is the CSET limited to the requirements indicated in the checklist stated in
RMO 29-2002?
A-9 As a general rule, yes, provided that CSET shall be allowed to ask for
additional requirements if the need arises during a system demo or upon
evaluation of the application. Provided further, that the taxpayer shall
submit the additional requirements within the required period to process
the application otherwise, the same shall be denied.
Q-10 Will the BIR issue a temporary permit for the use of CAS?
A-10 As a general rule, no temporary permit to adopt CAS shall be issued except
upon approval of the Deputy Commissioner for Operations Group.
Temporary permit shall be issued only based on valid and meritorious
cases (e.g., systems enhancement that need to be done abroad)
The validity of temporary permit approved by the Deputy Commissioner of

Operations may either be shortened or renewed depending on the
compliance on the reason(s) for issuance of the temporary permit by the
taxpayer. (RMO 29-2002)
Q-11 After filing the application, when will the Permit to Adopt CAS and/or
Components Thereof be issued?
A-11 Application not requiring systems demo and no cross 10 days
RDO evaluation
Application not requiring systems demo with cross 20 days
RDO evaluation
Application requiring systems demo with no cross 30 days
RDO evaluation
Application requiring systems demo with cross 40 days
RDO evaluation (RMO 29-2002)
Q-12 In applying for permit to use CRM/POS machines linked to CAS, is it part of
the procedure that it should pass the Case Monitoring System (CMS) of the
Bureau?
A-12 For monitoring purposes, LTAD I and II, LTDOs and computerized RDOs
shall create a case for the CRM/POS Machines in the CMS and assign the
same to a case officer prior to the preparation and issuance of the
corresponding stickers. The corresponding template for CRM/POS shall
likewise be filled out by the case officer assigned. (RMO 29-2002)
Q-13 In case there is an open case, would the issuance of permit be allowed?
A-13 Existence of open cases (stop-filer (RCS) cases, audit cases, accounts
receivable (AR) cases, etc.) in the name of the applicant-taxpayer should
not be a hindrance to the issuance of the permit to use CAS and/or
Components thereof.
Q-14 Will BIR hold the issuance of permit in case the taxpayer has a penalty
payable, pending collection or audit case?
A-14 No, the collection of the penalty or pending collection or audit case is not a
condition precedent in the issuance of permit.
Q-15 In case there is a transfer of application to adopt CAS of the taxpayer from
one district to another, who shall issue the permit to adopt CAS?
A-15 In case the evaluation on the application for permit to adopt CAS or
components thereof requires a system demonstration, the RDO that
performed the system demonstration shall issue the permit to adopt CAS
or components thereof. Otherwise, if system demonstration was not yet
conducted, the application including the corresponding documents
submitted should be forwarded to the transferee RDO within five (5) days
upon receipt of notice of transfer who shall then continue the processing of
the application. The period to process shall start as day one (1).
In cases where system demonstration is not required, the originating office

where the application for CAS was submitted shall issue the permit if at
least 80% of the required period (10, 20 days whichever is applicable) to
process/issue the permit has been consumed. Otherwise, the permit shall
be issued by the transferee RDO.
Q-16 In cases of applications for permit requiring Cross-RDO evaluation, who

shall co-ordinate?
A-16 The CSET of the BIR office where the application was filed shall coordinate
with the CSET of the other concerned BIR Office in case of evaluation of
application involving branch within the jurisdiction of other office.
Q-17 What is Point-Of-Sale (POS) Terminal?
A-17 A point-of-sale (POS) terminal is a computerized replacement for a cash

register. Much more complex than the cash registers of even just a few
years ago, the POS system can include the ability to record and track
customer orders, process credit and debit cards, connect to other systems
in a network, and manage inventory. Generally, a POS terminal has as its
core a personal computer, which is provided with application-specific
programs and I/O devices for the particular environment in which it will
serve. A POS system for a restaurant, for example, is likely to have all
menu items stored in a database that can be queried for information in a
number of ways. POS terminals are used in most industries that have a
point of sale such as a service desk, including restaurants, lodging,
entertainment, and museums.
Increasingly, POS terminals are also Web-enabled, which makes remote

training, and operation possible, as well as inventory tracking across
geographically-dispersed locations.
Q-18 What is Cash Register Machine (CRM)?
A-18 Cash Register Machine uses a firmware, which is installed on a chip called
electronic programmable Read only Memory (EPROM). In electronic
engineering, the term firmware is interpreted as a program which is burned
on a non-volatile memory, and which is used for the organization of an
exactly defined field of application. A machine-near program code ensures
shortest execution times and highest operation/s and data security.
Compared with traditional PC-systems, the hardware of firmware
controlled machines is usually specially made, that enables to take also
ergonomic requirements into consideration.
Q-19 What is CRM/POS Machines Linked to CAS?
A-19 Cash Register Machines/Point of Sale Machines that are electronically

connected to a CAS or connected to a CAS through a central server via
network. (RMO 29-2002)
Q-20 What is e-Invoicing (Electronic Invoicing System)?
A-20 The electronic invoicing system or e-Invoice System refers to the system
developed and maintained by the e-Buyer or e-Seller or both in issuing
invoice electronically through the Internet.
E-Invoice shall include sales invoice, official receipt, billing invoice,

debit/credit notes or such other similar accounting documents issued
electronically through the internet.
Q-21 Is Authority To Print (ATP) Receipts/Invoices still required if the taxpayer

adopts CAS?
A-21 Yes. In case of systems downtime, taxpayer shall be required to use

pre-printed receipts and invoices with ATP which shall not exceed one
thousand (1,000) sets or issue its remaining receipts/invoices out of the
inventory of previously approved unused manually printed receipts and
invoices. Also, in cases wherein the taxpayer’s system cannot generate
official receipts and invoices and the like, ATP shall be applied following
RMO No. 28-2002. (RMO 29-2002)
Q-22 Is automatic resetting of the range of serial numbers on POS machines

allowed?
A-22 As a general rule, automatic resetting of serial numbers on POS machines is

not allowed.
Q-23 In cases where taxpayers do not qualify under the guidelines on RR No.
10-99 and RMO No. 29-2002, what guidelines shall be imposed?
A-23 Applications for permit that do not qualify in either issuance shall be
elevated to CSET for proper evaluation and necessary recommendation.
Q-24 What BIR issuance/guidelines shall be applied in processing application for

use of CRM/POS machines not linked to taxpayer’s CAS? Is it RMO No.
29-2002 or RR No. 10-99?
A-24 Application for use of stand-alone (not linked to CAS) POS Machine/CRM
shall be processed under the provisions of RR No. 10-99 or any later
regulations that may be issued amending RR No. 10-99. (RMO 29-2002)
Q-25 Under what issuance applications for permit to use vending machines shall
be processed?
A-25 Applications for permit to use Vending Machines shall be processed

following the provisions of RR No. 10-99.
Q-26 What does a pool of CRM/POS machines mean?
A-26 These are CRM/POS machines reserved for use during peak season by the
taxpayer and which shall be registered under the Head Office. These
machines shall only be allowed to be transported and be used to rove
around the branches of the taxpayer upon written approval from BIR
concerned office having jurisdiction over the Head Office on the
corresponding CRM/POS machines stating therein the duration of use and
the branch/place where said machines shall be used. (RMO 29-2002)
Q-27 Will the taxpayers be allowed to have or maintain a pool of Cash Register
Machines (CRM)/Point of Sale (POS) machines linked to CAS?
A-27 Yes. Taxpayers that opt to maintain a pool of CRM/POS Machines in their
business operations during peak season (stand-by/roving machines) shall
identify such in their applications. These machines shall be treated as Head
Office machines and shall be issued permits by LTAD I or II, LTDO or
RDO having jurisdiction over the Head Office. Only CRM/POS machines
belonging to the pool shall be allowed to be transported for use in the
branches or to any place of business of the taxpayer.
Transfer to the taxpayer’s branch/es of CRM/POS machines belonging to the

pool shall be subject to the approval of LTAD I or II, LTDO or RDO
having jurisdiction over the Head Office, which shall then inform the
branch/es’ RDOs where the machines shall be used. (RMO 29-2002)
Q-28 Is the roving of stand-alone POS machines allowed?
A-28 Roving of stand-alone CRM/POS machines is not allowed. Only CRM/POS

machines belonging to the pool may be transferred to the taxpayer’s
branch/es or other place of business. (RMO 29-2002)
Q-29 How do we monitor pool of CRM/POS machines?
A-29 The taxpayer shall give prior notice to the BIR that the CRM/POS machines
shall be transferred from Head Office to its branch. (RMO 29-2002)
Q-30 How can we identify machines belonging to the pool of CRM/POS

machines?
A-30 The pool of CRM/POS machines is registered under the Head Office. To
properly identify the CRM/POS machines belonging to the pool, the
issuing BIR office shall indicate in the Permit to Use Cash Register
Machine (CRM) or Point of Sale (POS) Machine (Annex “G” of RMO
29-2002) after the box for Head Office the word “Pool” in parenthesis.
[e.g. Head Office (Pool)].
Q-31 Who shall issue stickers for CRM/POS machines linked to CAS?
A-31 Stickers for CRM/POS machines linked to CAS shall be issued by the
following:
1. For machines to be used by the branch/es
— By the BIR office having jurisdiction over the branch/es

upon presentation by the taxpayer and submission of a copy of
the Branch Permit issued by the BIR office having jurisdiction
over the Head Office.
2. For machines to be used by the Head Office and those belonging to

the pool
— By the BIR office having jurisdiction over the Head Office.

(RMO 29-2002)
Q-32 How can the CRM/POS Machines stickers issued under RMO No. 29-2002
and RR No. 10-99 be distinguished?
A-32 A template for the CRM/POS machines sticker was provided in RMO No.
29-2002. This shall serve as a format that shall distinguish the stickers
issued under RMO No. 29-2002 from that issued under RR No. 10-99.
Q-33 Is the manual cash register machine sales book still to be maintained in case
the taxpayer adopts CAS?
A-33 Taxpayer with approved CAS capable of generating reports such as but not
limited to daily sales, accumulated sales, etc. need not be required to
maintain manual Cash Register Machine Sales Book provided that all
information required in the manual CRM Sales Book are reflected in the
computerized reports.
However, these computerized reports shall be made available during post

system evaluation of CAS, or duly authorized tax audit of taxpayer’s
records. (RMO 29-2002)
Q-34 What are the procedures in the application/approval of the range of serial
numbers to be used for computer-generated receipts and invoices?
A-34 Taxpayers shall be required to fill up BIR Form No. 1907 in applying for the
initial range of serial numbers of computer generated invoices/receipts
which shall be issued.
For the 2nd and succeeding range of serial numbers to be issued in the
generation of invoices/receipts using a Global/National System of
Environment, the following procedures shall be followed:
1. Taxpayers with approved CAS adopting a Global/National System

shall be required to fill up Annex “A” (Application for Authority to Use
the Range of Serial Number in Generating Invoices/Receipts for a Global
and National System of Environment) for the succeeding range of serial
numbers to be issued in generating computerized invoices/receipts;
2. The properly accomplished Annex “A” shall be submitted to the TSS

of the BIR office having jurisdiction over the taxpayer’s principal place of
business;
3. The TSS shall receive the properly accomplished Annex “A” and
evaluate the succeeding range of serial numbers to be issued in generating
invoices/receipts; and
4. After evaluation, the TSS shall prepare a Letter of Approval for the
Range of Serial Numbers to be Used in Generating Invoices/Receipts in a
Global/National System Environment (Annex “B”) for signature of
approving official and shall issue it to the taxpayer.
Q-35 Are taxpayers with Global System and using invoices and receipts printed
abroad, required to seek advance approval of the range of serial numbers
for said invoices/receipts?
A-35 No, taxpayers with Global System and using invoices and receipts printed
abroad (BIR Ruling No. DA 295-98) shall not be required to seek
advance approval of the next set of pre-approved range of serial number
for use in the Philippines but shall present the pre-numbered invoices and
receipts to BIR concerned office for registration prior to their use. The
invoices/receipts herein referred to shall be tracked using office
automation tools of the BIR Office.
For global system under which invoices and receipts are system-generated,
the serial number of invoices/receipts issued or used during the year shall
be stated/presented in chronological sequence of issuance by date of issue
in the CD-ROM that will be registered, together with other accounting
records, with the BIR office having jurisdiction over the taxpayer within
30 days following the end of the accounting period.
The taxpayer shall also submit a report on the range of serial numbers of
receipts and invoices which have been consumed and/or canceled during
the immediately preceding taxable year to the concerned office within 30
days from the close of the taxable year (RMO 29-2002).
Q-36 For Stand Alone POS Machine that can generate a detailed Cash
Register/POS Machine Sales Report, would the taxpayer still be required
to maintain a Cash Register Sales Book?
A-36 Taxpayer with stand alone POS Machine not linked to CAS is still required
to maintain a Cash Register Sales Book except when said taxpayer applies
for a permit to use a Component of CAS on Sales, provisions under RMO
29-2002 shall be adhered to.
Q-37 Is the taxpayer adopting a CAS required to maintain a hardbound computer

generated books of accounts, receipts and invoices and other accounting
records and have them stamped?
A-37 The requirement of binding and stamping of a hardbound computerized

books of accounts, receipts and invoices and other accounting records shall
no longer be necessary provided that the taxpayer shall submit an Affidavit
on the Post Reporting Requirements for CAS in Lieu of Hardbound
Computer Generated Books of Accounts, Receipts and Invoices and other
Accounting Records/Documents (Annex N of RMO 29-2002) and a soft
copy in text file format of the books of accounts and other accounting
records in CD-ROM properly labeled with the name of taxpayer, taxable
year and serial no. and volume no. of the books of accounts and other
accounting records, within 30 days from the close of the taxable year.
However, in case the taxpayer has no capability to submit in CD-ROM form,

procedures under the manual system shall prevail.
Q-38 Where does a taxpayer with a permit to use CAS, register his books of
accounts and submit other accounting records?
A-38 The taxpayer shall register with the LTAD I or II, LTDOs or RDOs having
jurisdiction over the principal place of business of taxpayer.
Q-39 Are taxpayers with web-enabled electronically generated receipts/invoices

(e.g. payment through credit card, payment through ATM and other
similar web-enabled electronically operated receipts/invoices) required to
secure permit to adopt CAS?
A-39 Yes, taxpayer with web-enabled electronically generated receipts and

invoices are required to secure permit to adopt a complete CAS.
Q-40 Who shall conduct the post system evaluation of the approved CAS of a
branch?
A-40 The CSET of LTAD I or II, LTDO or RDO having jurisdiction over the
Head Office of the branch shall conduct the post system evaluation of the
approved CAS, provided that there should be proper coordination with the
concerned CSET having jurisdiction over the branch.
Q-41 If during the Post System Evaluation, the CSET members discovered that the
taxpayer is using a system other than that of the approved CAS or a
modified version of the approved CAS, would the recommendation for
revocation of permit be final?
A-41 Yes, the revocation of the previously approved permit to use CAS shall be
final and executory. Hence, it is mandatory for the taxpayer to apply for a
new permit.
Q-42 Shall the CSET members be allowed to conduct post system evaluation in
case the taxpayers modify/enhance its CAS?
A-42 The CSET shall have the authority to conduct post system evaluation
through a Mission Order that shall be secured prior to its conduct.
Q-43 What shall be the alternative course of action by CSET members in case the
taxpayer prohibits them to check into its server during the post system
evaluation?
A-43 The CSET members shall report the taxpayer to the Legal and Enforcement
Service, Attention: Tax Fraud Division.
Q-44 Is the six (6)-month period of interval from the date of approval of permit
required before the CSET can conduct post system evaluation?
A-44 There is no required period of interval to post evaluate the approved CAS of
the taxpayer. The CSET can conduct post system evaluation of the
approved CAS as the need arises.
Q-45 What are the guidelines/procedures for stamping the CDs of books of
accounts and other accounting records submitted by the taxpayer?
A-45 Taxpayer Service Section (TSS) shall:
1. Check if the CD is properly labeled (using the Checklist for checking

CD Annex “C”) in permanent ink with name, TIN, taxable year and the
serial number and volume number of the books of accounts and other
accounting records/documents;
2. Scan the CD using the prescribed virus scan utilities (it should be
virus free);
3. Get the file size (in case there are two (2) or more file for a month, it
should be properly labeled as volumes 1, 2, etc. of that particular month
etc);
4. Open the file using any text editor (example: WordPad, Notepad,
etc.);
5. Check the validity of the content of the file (it should be on a

monthly basis and in a text file format.)
6. If CD passes the check criteria, stamp the CD “Registered” with a

permanent ink and affix the signature of the BIR employee and the date
(see below for illustration)
7. Return duly stamped CD to the taxpayer.
• However, if any of the above requirements is not satisfied,

return the CD to the taxpayer with the CD Checklist indicating the
reason for rejection.
Q-46 What are the responsibilities of TSS in receiving the CD?
A-46 The TSS shall be responsible in the following:
1. Ensure that they have the latest version of the virus signature;
2. Raise all technical issues relative to the submission of the CD which

should be forwarded to RDC – Helpdesk;
3. Monitoring the issues raised;
4. Keep the CD checklist for future use.
Q-47 What is the difference between cash receipts and invoices under CAS and
loose-leaf receipts/invoices under the manual system?
A-47 As long as the contents of the receipts/invoices, in accordance with Sections

237, 238 and 113 of the Tax Reform Act of 1997, are
generated by the system, taxpayer’s receipts/invoices shall be considered
under CAS. Loose-leaf receipts/invoices under the manual system shall
refer to invoices/receipts that are not generated by CAS or components
thereof. Hence, the CRM/POS machines not linked to CAS used to
generate receipts/invoices shall adhere to the provisions of Revenue
Regulations No. 10-99. CTacSE
Q-48 Is it necessary for the RDO having jurisdiction over the branch that adopts a
CAS to issue a certification of the last serial number of Sales
Invoice/Receipt consumed/canceled?
A-48 The RDO having jurisdiction over the branch is not required to issue a
certification of the last serial number of Sales Invoice/Receipt
consumed/canceled. Instead, the Taxpayer shall inform the BIR Office
having jurisdiction over the branch by accomplishing Annex “M” of RMO
No. 29-2002 (Report of the Range of Serial Numbers of Receipts and
Invoices Consumed/Canceled). (RMO 29-2002)
Q-49 Is modification of header of receipt allowed? Is modification of the header

of accounting reports allowed?
A-49 Modification of header of receipt shall be allowed provided that the taxpayer
shall follow the provisions of Sections 237 and 238 of the NIRC of 1997.
Modification of report header is allowed which shall depend on the

taxpayer’s nature of business. Provided however, that it should comply
with Sec 232 of the NIRC and its implementing Bookkeeping
Regulations and other related issuances.
Q-50 In cases of taxpayers adopting an Off The Shelf CAS, would there be a need
to evaluate and conduct Demonstration of the system?
A-50 In case there is prior evaluation and approval of an Off The Shelf CAS,
hence a precedent application, the system shall not undergo systems
demonstration in its evaluation. Provided that the Off the Shelf CAS has
not been customized in any manner.
In this regard, a list of approved off-the-shelf CAS shall be monitored and

provided by Information System Group (ISG) to all the CSET members
through a technical bulletin for proper reference.
Q-51 What is the jurisdictional limitation of the divisions under Large Taxpayer
Service in the issuance of permit to use CAS or components thereof?
A-51 LTAD I or II and LTDOs, are authorized to issue permit to use CAS or
components thereof of branches of identified taxpayers of LTAD I or II
and LTDOs nation-wide. Provided however, that the concerned RDO
where the branch(es) is(are) located shall be properly notified and
necessary coordination shall be made.
All internal revenue officials and employees are enjoined to give this
Circular as wide a publicity as possible.
(SGD.) GUILLERMO L. PARAYNO, JR.

Commissioner of Internal Revenue
ANNEX A
Application for Authority to Use the Range of Serial Numbers in Generating

Invoices/Receipts for Global/National System Environment
ANNEX B
Letter of Approval for the Range of Serial Numbers to be used in Generating
Invoices/Receipts in a Global/National System Environment
ANNEX C
(2)
September 16, 2002
REVENUE MEMORANDUM ORDER NO. 29-02
SUBJECT : Revised Procedures in the Processing and Approval of

Applications for Permit to Adopt Computerized Accounting
System (CAS) or Components Thereof Amending RMO
21-2000
TO : All Internal Revenue Officials and Employees and Others

Concerned
I. OBJECTIVE
This Order is issued to further prescribe policies, guidelines and procedures

as well as define duties and responsibilities relative to the processing and approval
of applications for Permit to Adopt Computerized Accounting System or
Components Thereof.
II. DEFINITION OF TERMS
For purposes of this Order, the following definitions are provided:
A. Affiliated Corporations. This means that two or more

organizations are allied with or closely connected with one
another, or with a central body but each organization continues
to exist. It does not bear the construction that one of the
"affiliated" organizations is in all particulars identical with or
covered by the parent or main organization with which it is
affiliated.
B. Branch. A fixed establishment in a locality which conducts

operation of the business as an extension of the principal office
with at least one tax type.
C. Computerized Accounting System [CAS]. The integration of

different component systems to produce computerized books of
accounts and computer-generated accounting records and
documents. For purposes of this issuance, it shall also refer to
applications for the use of any or all of the CAS components.
D. Component of CAS. Any system application adopted to generate

accounting records, reports and/or documents.
E. Computerized Books of Accounts. These refer to books of

accounts such as General Ledger, General Journal, Sales Book,
Purchase Book, Disbursement Book, etc., which are systems
generated.
F. Computer Generated Accounting Records. This refers to

official receipts, sales and cash invoices, cash vouchers, journal
vouchers, billing statements, sales tickets and other underlying
accounting records.
G. Computer Generated Receipts and Invoices. These are part of

accounting records which are generated by the system with a
capacity to produce sequential range of numbers.
H. Computer Generated Subsidiary Accounting Records. These

refer to Cash Receipt Book, Cash Disbursement Book,
Accounts Payable Book, Accounts Receivable Book,
Debit/Credit Memo Book and other underlying subsidiary
accounting records being generated under a computerized
system.
I. CRM/POS Machines Linked to CAS. This refers to Cash

Register Machines (CRM)/Point of Sale (POS) Machines that
are electronically connected to a CAS or to a central server via
network.
J. Database. A collection of information organized in such a way

that a computer program can quickly select desired pieces of
data.
K. Development Software. Programs used to compile, interpret and

assemble many sort of programming languages.
L. Disaster Recovery Procedure (DRP), Backup and Recovery

Strategy. A routine of procedures to restore from backup losses
due to natural disasters, loss of power, internal sabotage or any
form that can damage components of a computerized system.
This describes how an organization is to deal with potential

and/or actual disasters; i.e., plan consisting of precautionary and
remedial actions to be undertaken to minimize, maintain and /or
immediately resume mission-critical functions in case of
potential and/or actual disasters.
M. Electronic Archive. A copy of files in a long-term storage

medium for back-up/retention purposes.
N. Functional Description. This refers to documents showing a

high level description of the functions and features of a
computerized accounting system under evaluation.
O. Global System. Refers to a system which is simultaneously used

by a taxpayer for its Head Office and Branches worldwide.
P. Head Office. This refers to the principal place of business as

appearing in the Articles of Incorporation. In the case of
individual, the head office shall be the principal place of
business where the main books of accounts and other related
accounting records are kept and maintained.
Q. In-House/Customized CAS. This refers to the accounting system

developed internally in accordance with prescribed user
requirements.
R. Large Taxpayer. This refers to a taxpayer who has been

classified and duly notified by the Commissioner of Internal
Revenue as a Large Taxpayer (regular and excise) for having
satisfied any or a combination of the set criteria as to tax
payments, financial condition, and results of operations as
prescribed in Revenue Regulations No. 1-98 and Section
245 of the NIRC of 1997, including amendatory provisions
of law and regulations.
S. National System. Refers to a system, which is simultaneously

used by a taxpayer for its head office and branches nationwide.
T. Off-the-Shelf. This refers to a ready-made software or solution

that is readily available in the market to support the business
requirements of an establishment/company. It is also called
packaged software.
U. Pre-printed Invoices/Receipts. Sequentially pre-numbered

receipts/invoices with approved Authority to Print (ATP)
reserved for systems downtime.
V. Process Flow. This refers to the flow of procedures presented in

diagram form.
W. Regular Taxpayer. This refers to a taxpayer that has not been

classified and notified as a large taxpayer pursuant to Sec. 245
of the Tax Code of 1997 and Revenue Regulations No. 1-98,
including amendatory law and regulations.
X. Sales or Commercial Invoice. This is a written account of goods

sold or services rendered and the prices charged therefor used
in the ordinary course of business evidencing sale and transfer
or agreement to sell or transfer of goods and services. For this
purpose, Sales or Commercial Invoices shall be limited to the
following:
X.1. Cash Sales Invoice. This is an invoice issued for every

transaction involving sale or transfer of goods or
rendition of services whether the same is paid in cash,
check, or any other similar mode of payment.
X.2. Charge sales invoice. This is an invoice issued for every

transaction involving sale or transfer of goods/rendition
of services but the payment or consideration of which is
on deferred or account basis.
X.3 Official Receipt. A receipt issued for the payment of

services rendered or of goods sold on account.
Y. Stand alone CRM/POS Machines — are those that can run

independently from CAS.
Z. System Demonstration. This refers to the presentation of the

actual use of an accounting system or any of its components
either on a test or production environment.
AA. System Enhancement. Any change or modification in the

system software or architecture components of a computerized
application system that will add value or further improve the
system.
BB. System Flow. This represents the inputs, outputs and processes
of a system.
CC. System Generated Number. Number generated automatically by

a computerized system used in reference to a particular
accounting document.
III. SCOPE OF IMPLEMENTATION
A. All taxpayers engaged in business, whether classified as regular

or large taxpayers, who have Computerized Accounting System
or components thereof shall apply for permit prior to its use.
B. Components of Computerized Accounting System shall be the

following: CASIEa
1. General Journal and other subsidiary records except

General Ledger. (Note: It shall be mandatory to apply
for permit to adopt a complete CAS instead of applying
a permit for General Ledger only);
2. Sales, Purchases, Accounts Receivable, Accounts

Payable, Inventory, Payroll ledgers, subsidiary ledgers
and other accounting records;
3. Any application system which generates subsidiary

ledger which is part of official accounting documents
such as official receipts [OR], sales and cash invoices,
cash vouchers, journal vouchers, billing statements, sales
tickets, etc.;
4. Any application system which generates report as

required by the BIR (e.g., a separate report for void and
suspended transactions to explain the deduction from
sale, compilation of their Integrated/consolidated sales
report produced every end of the day); and
5. Point of Sale (POS) machine/Cash Register Machine

(CRM) connected thru a network or linked to CAS.
C. Taxpayer applying for e-invoicing system shall apply for a

complete CAS provided the system is capable of generating
hard copy of the invoice anytime.
IV. COMPUTERIZED SYSTEMS EVALUATION TEAM (CSET)
A. For purposes of this Order, a Computerized System Evaluation

Team [CSET] shall be created in the National Office and
Regional Offices. The CSET shall convene at least twice a
month to conduct the appropriate evaluation and recommend
the approval of applications to adopt Computerized Accounting
System [CAS] or components thereof. The CSET shall be
composed of the following members:
1. National Office
Group I
Head : Chief, Large Taxpayers Assistance

Division (LTAD) I
Asst. Head : Chief, Computer Operations, Network and

Engineering Division (CONED) —
Information Systems Operations Service
Data Center (ISOS–DC)
Members : Representative of Information Systems

Operations Service — Data Center (ISOS-
DC) Representative of LTAD I
Representative of Large Taxpayers Audit
and Investigation Division I
Group II
Head : Chief, Large Taxpayers Assistance

Division (LTAD) II
Asst. Head : Chief, CONED – ISOS-DC
Members : Representative of ISOS-DC

Representative of LTAD II
Representative of Large Taxpayers Audit
and Investigation Division II
2. Large Taxpayers District Office (LTDO)
Head : Concerned Large Taxpayer District

Officer
Asst. Head : Chief, CONED of the nearest RDC (As
determined by DCIR, ISG)
Members : Representative of concerned RDC

Representative of Assessment Section of
the LTDO
Representative of Taxpayer Service
Section of the LTDO
3. Regional Office/Revenue District Office (RDO)
Head : Concerned Revenue District Officer
Asst. Head : Chief, CONED of the Revenue Data

Center (RDC) concerned
Members : Representative of concerned RDC

Representative of Assessment Section of
the RDO Representative of Taxpayer
Service Section of the RDO
B. CSET shall refer for resolution legal issues that may arise in the
course of their evaluation of the application for CAS to Law
Division in the National Office or Legal Division in the
Regional Offices.
C. Travel allowance or provision of service vehicle in shuttling

CSET members to and from the taxpayer's site, per diem and
other related expenses for training, briefing, system
demonstration, and ocular inspection shall be allocated and
made available for the use of CSET.
CSET member shall secure a Certificate of Appearance from

the taxpayer for any task undertaken at the taxpayer's site.
D. A workshop shall be undertaken by the Human Resource

Development Service (HRDS) in coordination with the
Operation and Information Systems Groups to orient both the
technical and the functional groups on the scope, substance and
evaluation of CAS.
A group of Revenue Officers (ROs) from the Large Taxpayers

Assistance Divisions I & II and Taxpayer Service Section and
Assessment Section of the LTDOs and Revenue District
Offices shall be trained in this workshop. Furthermore, these
ROs shall undergo on-the-job training in the evaluation of CAS
on a rotation basis.
E. ROs who shall observe the taxpayer's system demo, shall act as
trainers/coaches of other ROs relative to the evaluation of
applications for the use of CAS and/or components thereof and
other functions relative to the use of CAS.
V. POLICIES
A. All applications for CAS, whether by Head Office or branches,

shall be filed by the Head Office at LTAD I or II, LTDO and
RDO having jurisdiction over the Head Office except in the
following cases:
1. In case the branch adopts CAS ahead of the Head Office,

the application shall be filed by the Branch with the
RDO having jurisdiction over the branch with a
certification that the Head Office does not use a CAS. In
the event that the Head Office later adopts the same CAS
and the branch with a previously issued permit shall be
linked to it, the permit to be issued to the Head Office
shall include a new permit for the said branch, which
shall supersede the previously issued permit.
2. In case the branch adopts a different CAS from that of its

Head Office, it shall apply for permit to adopt CAS at
the BIR office having jurisdiction over the branch.
B. Affiliated companies, sister companies, franchisees and closely

held corporations shall secure separate permits for the use of
CAS at LTAD I or II, LTDO or RDO. This requirement is
without regard whether they are sharing a server and using
exactly the same system previously approved for use by its
mother company or other sister companies.
C. Actual systems demo shall be dispensed with in cases of

application for CAS of the following taxpayers provided a
photocopy of the permit previously issued and a certification of
the approved system from the concerned CSET Technical Team
shall be submitted:
1. Head Office applying for CAS of additional branch/es.
2. Branch adopting the same system being used by another

branch with previously issued permit.
3. Affiliated companies, sister companies, franchisees and

closely held corporations using exactly the same system
previously approved for use by its mother company or
other sister companies.
D. Taxpayers whose CAS are provided by their consultants (i.e.

accounting firms) shall apply for a separate permit for the use
thereof. Taxpayers whose CAS is being outsourced to an
accounting firm shall be required to keep and maintain copies
of its book of accounts (whether in soft or hard copies) and
other related accounting records and documents in its place of
business.
E. Taxpayer applying for CAS or components thereof without

computer generated receipts and invoices shall apply for
Authority to Print (ATP) for his official receipts, invoices and
the like following prevailing rules and procedures on the
issuance of ATP.
F. Application for use of Point of Sale (POS) Machine/Cash

Register Machine (CRM) linked to CAS shall be processed
following the provisions of this RMO.
Application for use of stand-alone (not linked to CAS) POS

Machine/CRM shall be processed under the provisions of RR
10-99 or any later regulations that may be issued amending
RR 10-99.
G. Taxpayers who opt to maintain a pool of CRM/POS Machines

in their business operations during peak season
(stand-by/roving machines) shall identify such in their
applications. These machines shall be treated as Head Office
machines and shall be issued permits by LTAD I or II, LTDO
or RDO having jurisdiction over the Head Office. Only
CRM/POS Machines belonging to the pool shall be allowed to
be transported for use in the branches or to any place of
business of the taxpayer.
Transfer to the taxpayer's branch/es of CRM/POS machines

belonging to the pool shall be subject to the approval of LTAD
I or II, LTDO or RDO having jurisdiction over the Head Office
which shall then inform the Branch/es RDOs where the
machines shall be used.
H. In evaluating application for CAS by Head Office involving

branches located outside the jurisdiction of the BIR concerned
office having jurisdiction over the Head Office, the concerned
CSET shall coordinate and refer to the other CSET having
jurisdiction over the branch/es the evaluation of the CAS of the
branch/es concerned. The results of the cross RDO evaluation
of the branch/es' CAS shall be submitted to the CSET having
jurisdiction over the Head Office which shall recommend
approval/disapproval for issuance of permit to use CAS. The
RDO having jurisdiction over the head office of the taxpayer
shall issue to the said taxpayer-head office the applied permit
for the branch.
I. Permit to adopt CAS and/or components thereof shall be issued

to the taxpayer within the following period:
Application not requiring systems demo and no

cross RDO evaluation 10 days
Application not requiring systems demo

with cross RDO evaluation 20 days
Application requiring systems demo with no

cross RDO evaluation 30 days
Application requiring systems demo with cross

RDO evaluation 40 days
J. Stickers for CRM/POS Machine linked to CAS to be used by

the branch/es shall be issued by the BIR office having
jurisdiction over the branch/es upon presentation by the
taxpayer and submission of a copy of the Branch Permit issued
by the BIR office having jurisdiction over the Head Office.
K. No temporary permit to adopt CAS shall be issued except upon

approval of the Deputy Commissioner for Operations Group.
Temporary permit shall be issued only based on valid and
meritorious cases (e. g., systems enhancement that need to be
done abroad).
The validity of temporary permit approved by the Deputy
Commissioner of Operations may either be shortened or
renewed depending on the compliance on the reason(s) for
issuance of the temporary permit by the taxpayer.
L. Taxpayers with approved CAS capable of generating reports

such as but not limited to daily sales, accumulated sales, etc.
need not be required to maintain manual Cash Register
Machine Sales Book provided that all information required in
the manual CRM Sales Book are reflected in the computerized
reports. However, these computerized reports shall be made
available during post system evaluation of CAS, or duly
authorized tax audit of taxpayer's records.
M. In case of systems downtime, taxpayers using computer

generated receipts and invoices but whose system has no
redundancy/automatic switchover shall be allowed to issue
manual receipts using any of the following:
1. Remaining receipts/invoices out of the inventory of

previously approved unused manually printed receipts
and invoices; or
2. Manually pre-printed and pre-numbered receipts and

invoices with approved authority to print (ATP) reserved
or set aside for use during systems downtime which shall
not exceed one thousand (1,000) sets.
N. Taxpayers with approved CAS capable of generating receipts

and invoices, whether global or national system, shall be
required to:
1. Secure advanced approval of the next set of

Pre-Approved Range of Serial Number from BIR
concerned offices within 30 days before full
consumption or utilization of the previously approved
range of serial numbers. The first number of the series of
number to be issued or used by the taxpayer shall be the
continuation in the next set of range of serial number for
approval. (e.g. 1st Pre-Approved Range of Serial
Number of Invoice: 1000-5000; next set of
Pre-Approved Range of Serial Number of Invoice should
be 5001-10000)
2. Submit a report on the range of serial numbers of
receipts and invoices which have been consumed and/or
cancelled during the immediately preceding taxable year
to the concerned office within 30 days from the close of
the taxable year.
However, taxpayers with global system and using

invoices and receipts printed abroad (set as a precedent
in BIR Ruling No. DA-295-98) shall not be required to
seek advance approval of the next set of Pre-approved
Range of Serial Number for use in the Philippines but
shall present these pre-numbered invoices and receipts to
BIR concerned office for registration prior to their use.
The invoices/receipts herein referred to shall be tracked
using office automation tools of the BIR office.
For global system under which invoices and receipts

are system-generated, the serial number of invoices/receipts
issued or used during the year shall be stated/presented in
chronological sequence of issuance by date of issue in the
CD-ROM that will be registered, together with other
accounting records, with the BIR office having jurisdiction
over the taxpayer within 30 days following the end of the
accounting period.
O. With the implementation of the E-Commerce Law, the

requirement of binding and stamping of computerized books of
accounts and/or receipts and invoices generated by a duly
approved Computerized Accounting System shall no longer be
necessary, provided that:
1. Soft copy of the computerized books of accounts and

other accounting records/documents in text file format
shall be made available in any of the following mode:
a. In CD-ROM (read only) properly labeled with the

name of taxpayer, taxable year and the Serial No. and
Volume No. of the books of accounts and other
accounting records/documents, duly stamped
registered and signed by LTAD I or II, LTDO or RDO.
Adjustments to books of accounts and other accounting
records/documents may still be submitted in a separate
CD-ROM (read only) before the deadline for annual
income tax return duly certified by the independent
auditor indicating therein the adjustments made. The
separate CD-ROM (read only) containing the
adjustments to books of accounts and other accounting
records/documents shall be properly labeled with the
name of taxpayer, taxable year and the Serial No. and
Volume No. of the books of accounts and other
accounting records/documents duly stamped registered
and signed by LTAD I or II, LTDO or RDO; or
b. Electronically archived information in the books of

accounts and other accounting records/documents.
Archive of the books of accounts and other accounting
records/documents shall be retained for three (3) years
from due date of filing or actual filing of annual
income tax return, whichever comes late.
In case taxpayer has no capability to submit in CD-ROM

form, procedures under the manual system shall prevail.
2. A duly notarized certification in the form of an affidavit

ascertaining/attesting the accuracy of the following shall
be submitted to LTAD I or II, LTDO or RDO within 30
days from the close of taxable year:
a. The number of receipts and invoices used during the

year; and
b. The soft copy of the books of accounts and other

accounting records/document in text file format for the
taxable year in CD-ROM duly stamped "Registered"
and signed in the label by authorized official of LTAD
I or II, LTDO or RDO or the archived books of
accounts and other accounting records/documents for
the taxable year, if applicable.
P. The taxpayer shall apply for a new permit to use CAS in case of
any system enhancement that shall result in change in systems
release and/or version number. In case a taxpayer is found using
an enhanced system without the approval of the BIR, the permit
originally issued shall be deemed automatically revoked from
the time the enhanced system is adopted.
VI. PROCEDURES
A. Large Taxpayers Assistance Divisions I & II, Large Taxpayers
District Office and Revenue District Office [Taxpayer Service
Section (TSS)]:
1. Require the taxpayer to submit the following

requirements:
a. Accomplished BIR Form 1900 Application for

Authority to Use Computerized Accounting System
and/or Components Thereof/Loose-leaf Books of
Accounts, 2002 Enhanced version (Annex "A") and/or
BIR Form 1907 Application for Permit to Use Cash
Register Machine/Point of Sale Machine, 2002
Enhanced version (Annex "B")
b. Company Profile
b.1 Photocopy of BIR Certificate of Registration
b.2 Photocopy of Previously Issued Permit, if

applicable
b.3 Photocopy of Current Registration Fee Payment
c. Location map of the place of business;
d. Inventory of previously approved unused Invoices and

receipts, if applicable;
e. List of Branches that will use CAS, if any;
f. Technical Requirements
f.1 Application Name and Software Used

(Development & Database)
f.2 Functions and Features of the Application.
f.3 System Flow/s
f.4 Process Flow
f.5 Back-up Procedure, Disaster and Recovery Plan
f.6 Sworn Statement (Annex "C") and Proof of
System Ownership
f.7 List of Reports and Correspondences that can be

generated from the system with their
description, purpose and sample layout
f.8 Facsimile of System generated Loose-Leaf

Books of Accounts and list
thereof/Receipts/Invoices
g. Additional requirements in case of affiliated

companies/sister companies, franchisees and branches:
g.1 Photocopy of Previously Issued Permit for

mother/sister company or another branch using
the same system, if applicable.
g.2 Certification from the CSET which previously

evaluated the approved system.
2. Receive the requirements submitted by the

taxpayer-applicant.
3. Evaluate validity of the application and review

completeness of requirements submitted by checking the
appropriate boxes in BIR Form 1900.
4. If requirements are complete, stamp "Received" BIR

Form 1900 and/or BIR Form 1907, otherwise, return the
documents submitted to the taxpayer-applicant with
instruction to complete the requirements.
5. Distribute copies of submitted applications and

requirements to CSET for evaluation.
6. Coordinate with CSET and taxpayer-applicant the date

and the venue for the actual system demonstration of the
proposed Computerized Accounting System applied, if
deemed necessary.
7. Coordinate with the taxpayer and members of CSET for

the timely resolution of issues and concerns raised
during actual system demonstration.
8. Receive CSET's recommendation for
approval/disapproval of application together with the
accomplished Functional and Technical
Evaluation/Appraisal Checklist (Annex "D") or for
issuance of temporary permit upon approval of
DCIR-Operations
8.1. If recommended for approval:
a. Prepare Permit to Adopt Computerized Accounting

System or Components Thereof (Annex "E") with the
Schedule of Attachments in the Permit (Annex "E-1")
and if applicable, Branch Permit to Adopt
Computerized Accounting System or Components
Thereof, (Annex "F") with the corresponding Schedule
of Attachments in the Branch Permit (Annex "F-1");
Assign/indicate Permit Number using the following
format:
For Permit per Annex "E": Month and Year,

RDO No. and Sequence Number
(MMYY-RDO#-XXXXX). E.g. 0102-039-00001
For Branch Permit per Annex "F": Month and

Year, RDO No., Sequence Number and Branch Code
(MMYY-RDO#-XXXXX-XXX). E.g.
0102-039-00001-001)
b. If applicable, prepare stickers for CRM/POS Machines

(Annex "G") linked to CAS to be used by the taxpayer-
applicant himself.
(Note: LTAD I and II, LTDOs and

computerized RDOs shall create a case for the
CRM/POS Machines in the CMS and assign the same
to a case officer prior to the preparation and issuance
of the corresponding stickers. The corresponding
template for CRM shall likewise be filled out by the
case officer assigned.)
c. Forward permit or CRM/POS stickers, if applicable,

for approval of the concerned officials:
c.1 For large taxpayers under LTS — ACIR, LTS
c.2 For large taxpayers under LTDO — Concerned
LTDO officer
c.3 For regular taxpayers — RDO concerned
8.2. If recommended for disapproval; prepare Letter of

Denial for Permit to Adopt CAS or Components
Thereof (Annex "H") and forward to the concerned
officials mentioned in Item 1.8.1.c above for signature.
8.3. If recommended for issuance of temporary permit:
a. Prepare the Temporary Permit (Annex "I") and

transmittal/endorsement memo.
b. Forward Temporary Permit together with the

transmittal/endorsement memo to Taxpayer
Assistance Service for evaluation.
9. Receive from the concerned officials approved/signed

permit/temporary permit and/or CRM/POS stickers or
Letter of Denial.
10. Release the approved permit/Temporary Permit and/or

CRM/POS stickers, if applicable or Letter of Denial to
taxpayer-applicant.
11. Explain the contents of the permit to the taxpayer and

instruct him/it to adhere and comply with the provisions
stated in the issued permit.
12. Maintain and regularly update the MS Excel — based

Register of Permit to Adopt Computerized Accounting
System (Annex "J").
13. Furnish the RDOs concerned of the List of Permits

Issued to Branches (Annex "K") within their respective
area of jurisdiction on or before the 5th day after the end
of each month.
14. Maintain files of the List of Permits Issued to Branches

within its area of jurisdiction furnished by other
RDOs/LTDO, LTAD, for reference purposes.
15. If a taxpayer requests for stickers for CRM/POS

Machines linked to CAS for use by branch/es within its
area of jurisdiction:
15.1 Require taxpayer to present the Branch Permit which

includes CRM/POS Machines linked to CAS.
15.2 Verify authenticity of the presented Branch Permit by

checking from its file of List of Permits Issued to
Branch/es within its area of jurisdiction furnished by
other RDOs/LTDO/LTAD or from the office which
issued the permit.
15.3 Prepare CRM/POS stickers for signature of authorized

officials. (Note: LTAD I and II, LTDOs and
computerized RDOs shall create a case for the
CRM/POS Machines in the CMS and assign the same
to a case officer prior to the preparation and issuance
of the corresponding stickers. The corresponding
template for CRM shall likewise be filled out by the
case officer assigned.)
15.4 Issue CRM/POS stickers to taxpayer.
16. Prepare and submit Quarterly Inventory of Issued

Permits to Use CAS and Taxpayers with Pending
Applications (Annex "L") to Taxpayer Service Programs
and Monitoring Division (TSPMD) on or before the 15th
day after the end of each quarter.
17. Receive from taxpayers with approved CAS capable of

generating receipts and invoices the Report of the Range
of Serial Numbers of Receipts and Invoices
Consumed/Cancelled (Annex "M") during the
immediately preceding year within 30 days from the
close of taxable year; File the said reports for reference
purposes during audit of taxpayers.
18. In lieu of stamping of hardbound computer generated

books of accounts and receipts and invoices and other
accounting records:
18.1 Receive from the taxpayer an Affidavit on the Post

Reporting Requirements for CAS in lieu of Hardbound
Computer Generated Books of Accounts, Receipts and
Invoices and other accounting records (Annex "N"),
and soft copy in text file format of the books of
accounts and other accounting records in CD-ROM
properly labeled with the name of taxpayer, taxable
year and serial no. and volume no. of the books of
accounts and other accounting records, within 30 days
from the close of the taxable year.
18.2 Stamp "Registered" and sign on the label of the

CD-ROM.
18.3 Return CD-ROM to taxpayer.
B. Computerized System Evaluation Team (CSET):
1. Receive and conduct preliminary evaluation of the

submitted application form together with the attachments
provided by LTAD I & II/LTDO/RDO.
2. Determine the need for a systems demo and coordinate

with LTAD I/II/TSS of LTDO/RDO for scheduling with
the taxpayer of the date and venue and/or coordinate
with the CSET of concerned BIR offices in case of
evaluation of application involving branches within the
jurisdiction of other offices.
3. Attend systems demonstration, which may be conducted

on a test or production environment, if necessary.
4. Evaluate application and determine compliance to both

technical and functional requirements.
(Note: CSET shall ensure that the computer generated invoice

shall show the name and business style of seller, its address
and TIN indicating whether it is a VAT or Non-VAT
taxpayer, date of transaction, quantity, unit cost, description
of merchandise or nature of service, total amount, name,
business style, if any, and address of the purchaser, customer
or client and its TIN and prepared at least in duplicate
pursuant to Sec. 237, 238 and 113 of the Tax Reform Act of
1997)
5. Raise all issues and concerns before, during and after

actual system demonstration, if any and coordinate with
the taxpayer thru LTAD I/II, TSS of LTDO/RDO for
their early resolutions.
6. Evaluate resolution/s provided.
7. Accomplish Functional and Technical

Evaluation/Appraisal Checklist.
8. Prepare and forward recommendation for approval or

disapproval of permit to LTAD I/II/TSS of LTDO/RDO
together with accomplished Functional and Technical
Evaluation/Appraisal Checklist or recommendation for
issuance of temporary permit.
9. Conduct evaluation of the CAS of branch/es falling

under its jurisdiction referred by the CSET of the BIR
concerned office having jurisdiction over the Head
Office where the application for CAS was filed; submit
results of evaluation to the concerned office.
10. Conduct post system evaluation based on the Mission

Order issued by Assistant Commissioner, Large
Taxpayers Service or the Regional Director. Accomplish
an updated Functional and Technical
Evaluation/Appraisal Checklist.
11. Upon completion of post evaluation, submit to the

approving office the recommendation for revocation or
continued use of the permit issued to the taxpayer.
12. Receive periodically from ISG the Technical Bulletins

on approved CAS software and file them for reference
purposes.
C. Taxpayer Assistance Service (TAS)
1. Receive Temporary Permit together with the

transmittal/endorsement memo from LTAD I or II,
LTDO or RDO.
2. Evaluate justifications/reasons for issuance of

Temporary Permit and if valid and meritorious, initial on
the Temporary Permit.
3. Forward Temporary Permit to Deputy Commissioner,

Information Systems Group for signature as
recommending official and then to Deputy
Commissioner, Operations Group for approval.
D. Taxpayer Service Programs and Monitoring Division (TSPMD)
1. Receive Quarterly Inventory of Permits Issued and

Pending Applications to Use CAS (Annex "L") from
LTAD I/II/LTDOs/RDOs.
2. Consolidate reports and submit to ACIR, Taxpayer

Assistance Service and DCIR, Operations Group.
3. Monitor and conduct verification of permit register and

inventory of pending applications to use CAS or
components thereof maintained by LTAD I & II, LTDOs
and RDOs, whenever necessary.
E. Information Systems Group
1. Prepare and maintain the updated list of Off-the-Shelf

CAS approved by CSETs.
2. Issue periodically to the different CSETs a Technical

Bulletin containing information on the approved CAS
software for reference purposes.
VII. TRANSITORY PROVISION
Permits issued before RMO 21-2000 including those issued through

BIR Rulings shall be subject to re-evaluation by CSET but shall be valid until
revoked whereas permits issued under RMO 21-2000 shall remain to be valid
unless revoked upon post evaluation of the system or sub-systems previously
approved.
VIII. REPEALING CLAUSE
This Order amends RMO No. 21-2000 dated July 17, 2000 and repeals
and/or modifies accordingly all other issuances or portion/s thereof inconsistent
herewith.
IX. EFFECTIVITY
This Order shall take effect immediately.
(SGD.) GUILLERMO L. PARAYNO, JR.
Commissioner of Internal Revenue
ANNEX A
ANNEX B
ANNEX C
ANNEX D
ANNEX E
REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE
Office: ________________________
Permit No. _________________________

(Mo & Yr/RDO#/Sequence #)
Permit to Use Computerized Accounting System or Components thereof
_________________________
(Date)
_________________________
(Name of Company)
_________________________
(Address)
TIN: _____________________
Gentlemen :
Permit is hereby granted on your Application dated __________ for:
Complete Computerized Accounting System (CAS)
e-Invoicing System
General Journal
Computerized Books of Accounts Subsidiary Ledger(s):
Specify _______
Point of Sales Machines (POS) linked to CAS
Number of POS Units _____ (Refer to attached List of POS

Machine)
Cash Register Machine (CRM) linked to CAS
Number of CRM Units ______ (Refer to attached list of

CRM Machine)
Others ____________
Pertaining to a system which is: (check only one box)
Integrated or Independent
Applied by:
Head Office or Branch (only for independent system)
This Permit shall take effect ________________ subject to the provisions of Revenue
Memorandum Order No. _________ dated _________________ and shall be valid until
revoked. DCSETa
The approved software to be used is ____________________. It shall be

understood that any upgrading, integration or modification made in the systems without
prior approval shall mean automatic revocation of this permit and shall be subject to
penalties and sanctions pursuant to the provisions of the Tax Reform Act of 1997.
Note: Schedules duly attached under Annex "E-1" (if applicable)
Dry Seal
Very truly yours,
COMMISSIONER OF INTERNAL REVENUE
By:
______________________________________
(ACIR-LTS/LTDO/RDO)
ANNEX E-1
ANNEX F

Office: ________________________
Branch Permit No. ___________________________

(Mo & Yr/RDO#/Br Sequence #/Branch Code #)
Branch Permit to Use Computerized Accounting System or Components thereof
_________________________
(Date)
_________________________
(Name of Company)
_________________________
(Address)
TIN: _____________________
Branch Code _______________
Gentlemen :
Permit is hereby granted on your Application dated __________ for:
Complete Computerized Accounting System (CAS)
e-Invoicing System
General Journal
Computerized Books of Accounts Subsidiary Ledger(s):
Specify _______
Point of Sales Machines (POS) linked to CAS
Number of POS Units _____ (Refer to attached list of POS

Machine)
Cash Register Machine (CRM) linked to CAS
Number of CRM Units ______ (Refer to attached list of

CRM)
Others ____________
This Permit shall take effect ________________ subject to the provisions of Revenue
Memorandum Order No. _________ dated _________________ and shall be valid until
revoked.
The approved software that will be used is ____________________. It shall be

understood that any upgrading, integration or modification made in the systems without
prior approval shall mean automatic revocation of this permit and shall be subject to
penalties and sanctions pursuant to the provisions of the Tax Reform Act of 1997.
Note: Schedules Duly Attached Under Annex "F-1" (if applicable)
Dry Seal
Very truly yours,
By:
______________________________________
(ACIR-LTS/LTDO/RDO)
(Note: This permit is to be issued only by the LTAD I or II/LTDO/RDO of the applicant
taxpayer-Head Office for its application for branch permit.
ANNEX F-1
ANNEX G
(STICKER)
OFFICE Head Office
Branch
Permit No. _________________________

(Yr./RDO#/Br. Code/Serial #)
Permit to Use Cash Register Machine (CRM) or Point of Sale (POS) Machine
PERMIT IS HEREBY GRANTED TO (Name of Company) , of

(Address) with TIN ____________ effective (date) to use CRM/POS
machine linked to an approved Computerized Accounting System under permit no.
_________, with brand _________, model ______________ and serial no.
_____________, pursuant to the provisions of the National Internal Revenue Code, as
implemented by Revenue Memorandum Order No. __________ dated
_______________.
This approved CRM/POS machine shall be used in _____________ branch with

address at _____________. It is understood that any reversion on the approved maximum
range of serial numbers and sales capacity shall mean an automatic revocation of this
permit and shall be subject to penalties and sanctions pursuant, to the provisions of the
Tax Reform Act of 1997.
By:
______________________________________
(ACIR-LTS/LTDO/RDO)
Instructions: Standard size of POS/CRM sticker should be 11 x 14 cm.; color white;

letters in blue ink with BIR Logo.
ANNEX H
LETTER OF DENIAL OF APPLICATION FOR PERMIT TO ADOPT
COMPUTERIZED ACCOUNTING SYSTEM OR COMPONENTS THEREOF
_________________________
(Date)
_________________________
(Taxpayer)
_________________________
_________________________
(Address)
Sir/Madam:
We regret to inform you that your Application for Authority to Use Computerized
Accounting system or Components thereof has been "denied" per recommendation of the
Computerized System Evaluation Team due to the following reason(s)/deficiency(ies):
1.
2.
3.
4.
5.
Wherefore, you are hereby advised to comply based on the reasons herein-above
stated and submit a new application together with the documentary requirements to be
submitted to the Large Taxpayer's Service/Large Taxpayer District Office/Revenue
District Office having jurisdiction over your head office.
Very truly yours,
By:
______________________________________
(ACIR-LTS/LTDO/RDO)
ANNEX I

Office: ________________________
Temporary Permit to Use Computerized Accounting System or Components thereof
_________________________
(Date)
_________________________
(Name of Company)
_________________________
(Address)
TIN: _____________________
Gentlemen :
You are hereby granted a temporary permit relative to your application for (Type
of Application) dated (Date, of Application) due to the following reason(s):
1.
2.
3.
4.
5.
This temporary Permit shall take effect (Date) . subject to the provisions of
Revenue Memorandum Order No. _________ dated _________________ and shall be
valid for _____ days.
The validity of this temporary permit may either be shortened or renewed

depending on your compliance on the reason(s) for issuance of the temporary permit
unless application for Permit to Use Computerized Accounting System or components
thereof is revoked thereby a new application is required.
The software to be used on the basis of this permit is (Name of System Software) It
shall be understood that the system(s) used shall be subject to further evaluation of the
Computerized System Evaluation Team.
Very truly yours,
__________________
ACIR/LTS/LTDO/RDO
Recommending Approval: Approved by:
__________________ __________________
Deputy Commissioner Deputy Commissioner
Information Systems Group Operations Group
ANNEX J
ANNEX K
ANNEX L
ANNEX M
ANNEX N
Post Reporting Requirement for Computerized Accounting System in Lieu of Hardbound

Computer Generated Books of Accounts, Receipts and Invoices and other Accounting
Records/Documents
AFFIDAVIT
KNOW ALL MEN BY THESE PRESENTS:

I, (Name of Taxpayer's Representative , (Nationality of Representative) , of
legal age, designated as (Position) of (Name of Company/Corporation)
, with business address located at __________________, do hereby certify the following:
1. That, (Name of Corporation) with business address at _________________

is a duly registered corporation organized under the laws of the Philippines. HEacDA
2. That the above-mentioned corporation maintains a Computerized Accounting

System (CAS) under Head Office/Branch Permit No. ____ issued at LTAD/LTDO/RDO
on ______.
3. That for Purposes of compliance under RMO ____________ dated ___________

the above-mentioned corporation in lieu of hardbound computer generated books of
accounts/other accounting records/documents for taxable year __________ hereby
maintains in CD-ROM form duly labeled with the name of taxpayer, taxable year. Serial
number and Volume number of Books of Accounts duly stamped "registered" and signed
by the Authorized Revenue Official or maintain the above-mentioned Books of Accounts
and other accounting records/documents in an Archive Information Form.
4. That the aforementioned Books of Accounts/Accounting Records are herein listed

as follows:
Book of Accounts/Accounting Records Volume No. Series No.

(Please specify)
1.
2.
5. That the Receipts/invoices or other related documents duly assigned with serial
numbers stated as follows have been Consumed/Cancelled for the taxable period covering
_____________.
Type of Accounting Documents Series No.

1.
2.
6. That the Books of Accounts, Invoices and Receipts and other accounting
records/documents of the above-mentioned company is in the form of CD-ROM or in an
Electronic Archive Information which have the capacity to retain the information (read
only and in report format) installed and shall be kept for a period of not less than three (3)
years and that the duly authorized Internal Revenue Officer of the BIR shall be allowed
access the aforementioned information.
In WITNESS WHEREOF, I have hereunto set my hand this day of _________ in
the Republic of the Philippines.
__________________________
(Affiant/Authorized Representative)
SUBSCRIBED AND SWORN TO BEFORE ME, a Notary Public for and in
(City/Municipality) , (Province) , this ________ day of (month and year)
affiant exhibiting to me her Community Tax Certificate No. _______ issued on (date)
at (place) and Tax Identification Number ____________.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial

Seal on the date and place above written.
Notary Public
Doc No. _____
Page No. _____
Book No. _____
Series of _____
Endnotes
1 (Popup - Popup)
Annex A
Annex B
Annex C
2 (Popup - Popup)
Annex A
Annex B
Annex C
Annex D
Annex E
Annex E-1
Annex F
Annex F-1
Annex G
Annex H
Annex I
Annex J
Annex K
Annex L
Annex M
Annex N

7.RMC 71-03 CAS Procedures QandA

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7.RMC 71-03 CAS Procedures QandA

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(1)

June 23, 2003

REVENUE MEMORANDUM CIRCULAR NO. 71-03

SUBJECT : Clarification of Issues Affecting the Revised Procedures in

TO : All Internal Revenue Officials and Employees and Others

This Circular aims to supply basic information and provide uniform

Q-1 What is a CAS?

A-1 It is the integration of different component systems to produce computerized

Q-2 What are the components of CAS?

A-2 The components of CAS are:

1. General Journal and other subsidiary records

(Note: For General Ledger, though it is a component of CAS, taxpayer must

2. Sales Book, Purchases Book, Accounts Receivable Book, Accounts

3. Any application system which generates subsidiary ledger and is part

5. Point of Sale (POS) Machine/Cash Register Machine (CRM)

A-3 1. Taxpayers who will use/adopt:

• Any or some of the components of CAS

2. Taxpayers with valid permits to adopt CAS or component/s thereof

Q-5 In cases of affiliated companies, sister companies, franchisees and closely

A-5 Affiliated companies, sister companies, franchisees and closely held

Q-7 When should the application be filed?

A-8 1. Accomplished BIR Form 1900 and/or BIR Form 1907

2. Photocopy of BIR Certificate of Registration

3. Photocopy of Previously Issued Permit, if applicable

4. Photocopy of Current Registration Fee Payment

5. Location map of the place of business

6. Inventory of previously approved unused invoices and receipts, if

7. List of branches that will use CAS, if any

8. Application Name and Software used (Development and Database)

9. Functions and Features of the Application

10. System Flow/s

11. Process Flow

12. Sworn Statement & Proof of System Ownership

13. Back-up Procedure, Disaster and Recovery Plan

15. Facsimile of System Generated Loose-leaf Books of Accounts and

16. Photocopy of previously issued permit of mother/sister company,

17. Certification from Computerized System Evaluation Team (CSET)

The validity of temporary permit approved by the Deputy Commissioner of

In cases where system demonstration is not required, the originating office

Q-16 In cases of applications for permit requiring Cross-RDO evaluation, who

Q-17 What is Point-Of-Sale (POS) Terminal?

A-17 A point-of-sale (POS) terminal is a computerized replacement for a cash

Increasingly, POS terminals are also Web-enabled, which makes remote

Q-18 What is Cash Register Machine (CRM)?

Q-19 What is CRM/POS Machines Linked to CAS?

A-19 Cash Register Machines/Point of Sale Machines that are electronically

Q-20 What is e-Invoicing (Electronic Invoicing System)?

E-Invoice shall include sales invoice, official receipt, billing invoice,

Q-21 Is Authority To Print (ATP) Receipts/Invoices still required if the taxpayer

A-21 Yes. In case of systems downtime, taxpayer shall be required to use

Q-22 Is automatic resetting of the range of serial numbers on POS machines

A-22 As a general rule, automatic resetting of serial numbers on POS machines is

Q-24 What BIR issuance/guidelines shall be applied in processing application for

A-25 Applications for permit to use Vending Machines shall be processed

Q-26 What does a pool of CRM/POS machines mean?

Transfer to the taxpayer’s branch/es of CRM/POS machines belonging to the

Q-28 Is the roving of stand-alone POS machines allowed?

A-28 Roving of stand-alone CRM/POS machines is not allowed. Only CRM/POS

Q-29 How do we monitor pool of CRM/POS machines?

Q-30 How can we identify machines belonging to the pool of CRM/POS

1. For machines to be used by the branch/es

— By the BIR office having jurisdiction over the branch/es

2. For machines to be used by the Head Office and those belonging to

— By the BIR office having jurisdiction over the Head Office.