Invoices can substitute for receipts — BIR

SALES INVOICES can also serve as principal evidence of the sale of goods or properties for audit purposes, the Bureau of Internal Revenue (BIR) clarified.

QUESTIONS were raised with regard to requirements by government auditors. Revenue Memorandum Circular (RMC) 2-2014, dated Jan. 14, states that a sales invoice “shall serve in lieu of official receipt in the sale of goods or properties for evidentiary purposes in terms of audit.”

The bureau said it issued the clarification in light of queries from taxpayers concerning the validity of invoices as evidence of sales, in particular to government entities.

“The bureau has been receiving numerous queries regarding the requirement of government auditors on the issuance of official receipt as the acceptable evidence of receipt of payment for disbursements where the payee/recipient is a dealer, supplier or business establishment required by the BIR to issue the same in the sale/lease of goods or properties, and/or sale of services,” the issuance read.

“That sales invoices are demanded as evidence of delivery, agreement to sell or transfer of goods and services, and official receipt as evidence of payment. In fine, both sales invoices and official receipts are required on one transaction by some government agencies.”

The bureau noted that under the National Internal Revenue Code, a sales invoice issued for cash or charge, like an official receipt, is in itself considered “principal evidence” in the sale of goods and/or properties.

Meanwhile, commercial receipts/invoices such as delivery receipts, job orders and other similar documents that form part of the accounting records of the taxpayer and/or issued to their customers will be considered “supplementary evidence” only.

Under Revenue Memorandum Order 12-2013 issued last May 12 last year, the buyer of goods evidenced by a charge sales invoice shall be entitled to claim input taxes. Thus, upon collection of the account by the seller, a receipt (supplementary) shall be issued to evidence payment.

“[T]his Circular … reiterate[s] that the provisions … in the issuance of principal and/or supplementary receipts/invoices in the ordinary course of business and the consequent examination of evidence of receipt of payment, shall be strictly observed,” the BIR said. –Bettina Faye V. Roc, Reporter, BUsinessworld