The Bureau of Internal Revenue (“BIR”) continues to modernize Philippine tax administration through the implementation of electronic invoicing and electronic sales reporting requirements. With the issuance of Revenue Regulations (“RR”) No. 11-2025, as subsequently amended by RR No. 26-2025, certain taxpayers are now required to transition to electronic invoicing, with covered taxpayers given until December 31, 2026 to comply with the prescribed electronic invoice issuance requirements.
RR No. 11-2025 was issued to implement Sections 237 and 237-A of the National Internal Revenue Code of 1997, as amended by Republic Act No. 12066, otherwise known as the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy or “CREATE MORE Act.” The Regulations introduced rules governing the issuance of electronic invoices and the electronic reporting of sales and invoice data to the BIR. RR No. 26-2025 thereafter extended the compliance period for certain taxpayers until December 31, 2026 in recognition of the operational adjustments, system reconfiguration, and technological changes required for implementation.
Under RR No. 26-2025, taxpayers presently given until December 31, 2026 to comply with the electronic invoicing requirements include taxpayers engaged in electronic commerce or internet transactions that are classified as Small, Medium, or Large Taxpayers; taxpayers under the jurisdiction of the Large Taxpayers Service (“LTS”); taxpayers classified as Large Taxpayers pursuant to the Ease of Paying Taxes Act and RR No. 8-2024; and taxpayers using a Computerized Accounting System (“CAS”), Computerized Books of Accounts (“CBA”) with Accounting Records and electronic invoicing, or other invoicing software.
The foregoing coverage must, however, be read together with the exemption provided under RR No. 11-2025 for Micro Taxpayers. The Regulations exempt covered Micro Taxpayers from the mandatory requirement to use and issue electronic invoices. This does not prevent a Micro Taxpayer from voluntarily adopting electronic invoicing. In the absence of an electronic invoice, a Micro Taxpayer may continue issuing registered manual invoices and may also use a CAS, Cash Register Machine (“CRM”), or Point-of-Sale (“POS”) System in lieu of electronic invoices, subject to applicable BIR requirements.
For purposes of taxpayer classification, RR No. 8-2024 classifies a Micro Taxpayer as one whose annual gross sales are below ₱3 million; a Small Taxpayer as one with annual gross sales of ₱3 million to below ₱20 million; a Medium Taxpayer as one with annual gross sales of ₱20 million to below ₱1 billion; and a Large Taxpayer as one with annual gross sales of ₱1 billion or more. Gross sales generally refer to total sales revenue, net of Value-Added Tax (“VAT”), if applicable, without other deductions.
Consequently, the electronic invoicing requirement is not limited to large corporations. A Small or Medium Taxpayer engaged in e-commerce or internet transactions may already fall within the December 31, 2026 compliance deadline. Conversely, a Micro Taxpayer does not become mandatorily covered merely because it conducts transactions online or uses an invoicing system falling within the categories identified in RR No. 11-2025.
The requirement is likewise not confined to businesses selling goods or services through online platforms. A business that does not principally engage in e-commerce may still be covered if it falls under the LTS, is classified as a Large Taxpayer, or uses a CAS, CBA with electronic invoicing, or other covered invoicing software, subject to the applicable exemption for Micro Taxpayers. Businesses should therefore determine their coverage based not only on the manner in which they sell their products or services, but also on their BIR taxpayer classification and the accounting or invoicing systems presently being used.
An electronic invoice for purposes of RR No. 11-2025 involves more than the mere generation of an invoice using a computer or accounting system. The Regulations require covered systems to generate invoices containing structured invoice data that can be electronically extracted and readily transmitted to the BIR for electronic sales reporting.
Accordingly, an invoice generated through a computerized accounting system, cash register machine, point-of-sale system, or other invoicing software and subsequently printed on paper does not, by that fact alone, qualify as an electronic invoice. Where the underlying system does not have the capability or readiness to electronically report the corresponding sales and invoice data, the invoice is treated under the Regulations as a traditional manually issued invoice. Thus, the mere fact that an invoice is computer-generated or transmitted electronically does not necessarily make it a compliant electronic invoice under RR No. 11-2025.
This distinction is significant for companies that have already computerized their accounting operations. The use of accounting or invoicing software does not necessarily mean that a company’s existing invoicing process already satisfies the electronic invoicing requirements. Covered taxpayers should review whether their current systems generate the required structured invoice data and whether their accounting or invoicing software can support the technical requirements contemplated by the BIR.
The Regulations likewise have implications for businesses operating through several branches. Where the taxpayer or covered business activity is registered as a Branch Office, RR No. 11-2025 provides that the taxpayer’s Head Office and all its Branch Offices shall likewise be required to issue electronic invoices. Compliance may therefore require a company-wide review and system adjustment rather than a modification limited only to the particular branch or business unit that initially brings the taxpayer within the coverage of the Regulations.
RR No. 26-2025 also separately identifies other taxpayers that may subsequently become subject to mandatory electronic invoicing once the BIR establishes a system capable of storing and processing the required information and issues the necessary separate Revenue Regulations. These include taxpayers engaged in the export of goods and services, Registered Business Enterprises availing themselves of tax incentives, taxpayers using POS systems, and such other taxpayers as may subsequently be required by the Commissioner of Internal Revenue.
However, a taxpayer falling within any of these categories may already be subject to the December 31, 2026 deadline if it independently falls within one of the taxpayer groups presently required to comply. Thus, the nature of the taxpayer’s business, BIR classification, registration status, and invoicing system should all be considered in determining whether the current deadline applies.
It is also important to distinguish between the obligation to issue electronic invoices and the obligation to electronically report sales information to the BIR. RR No. 26-2025 provides that mandatory compliance with the Electronic Sales Reporting System for the taxpayers identified in the Regulations will be implemented once the BIR establishes a system capable of storing and processing the required data and issues the corresponding Revenue Regulations.
Accordingly, December 31, 2026 should not be understood as a general deadline requiring every taxpayer covered by the electronic invoicing rules to begin transmitting all sales and invoice data to the BIR on that date. The present deadline relates to compliance with the electronic invoice issuance requirements applicable to the covered taxpayers. Existing electronic sales reporting obligations applicable to taxpayers already covered by separate BIR implementation arrangements should nevertheless continue to be observed.
The distinction does not remove the need for early preparation. The electronic invoice contemplated by the Regulations must be structured in a manner that allows the information to be electronically extracted and ultimately transmitted in accordance with applicable BIR electronic sales reporting requirements. Companies that wait until the end of 2026 to review their systems may encounter difficulties involving software modification, vendor coordination, BIR registration requirements, internal controls, branch implementation, and the migration of existing invoicing processes.
With the December 31, 2026 compliance deadline approaching, affected businesses should begin reviewing their BIR taxpayer classification, the nature of their e-commerce or internet transactions, their registration under the Large Taxpayers Service, and the accounting and invoicing systems presently being used. Coordination among the company’s finance, tax, information technology, and legal teams may likewise be necessary to determine whether existing systems comply with the requirements of RR No. 11-2025, as amended, or require further reconfiguration.
The transition to electronic invoicing represents a significant development in Philippine tax administration. While the new framework is intended to facilitate the digitalization of tax compliance and prepare taxpayers for broader electronic sales reporting, its implementation may require substantial changes to existing accounting and invoicing practices. Businesses that may fall within the coverage of the Regulations are therefore encouraged to determine their status and assess their existing systems well before the December 31, 2026 deadline.
This guide provides a general overview of the above matters at the time of writing only and is not intended to be comprehensive legal or tax advice. This should also not be taken as an opinion on the topic. For more details and information, you may coordinate with any GVES Law Partner regarding the matter.
Atty. Ludanielle N. Legarde is a Partner at GVES Law