
Everything you need to know about Official Receipts 2 years ago
As a startup business owner, you must understand the importance of documents supporting your business transactions and records if you are currently operating a business.
Under Section 237 of the Tax Code, all taxpayers involved in business or trade must issue an official receipt or sales invoice for each sale and transfer of goods and services.
What is an Official Receipt?
An official receipt, often known as an OR, is a record that confirms the completion of a service-related sale transaction. Here’s an example:
A business's official receipt will serve as proof of transaction, whether providing or receiving services. As part of your accounting and bookkeeping procedures, you must maintain file copies of these receipts. When it comes time to review your yearly transactions, you can audit these receipts and claim any tax deductions. Utilizing accounting software streamlines this process, ensuring accurate tracking and organized record-keeping for financial efficiency.
Official Receipt vs. Sales Invoice?
Sales Invoices are issued and required in the sale of goods, which will validate and prove the occurrence of transactions made on products.
Whereas Official Receipts are required for the sale of services, they will serve as proof that services were rendered.
How is the sales invoice different from other billing invoices?
Billing Invoice is an additional sales document for the selling of services. In contrast, the sales invoice is regarded as the primary or most significant document for the sale of goods because it serves as the official record of the transaction.
How long should you keep receipts?
Taxpayers are expected to keep their books of accounts, like subsidiary books and other accounting records, for three (3) to ten (10) years beginning the day after the return filing deadline or the date of filing the return.
This would benefit those who wanted to claim a tax deduction or simply for record-keeping in case the BIR asked for proof.
How long are receipts valid?
After receiving complaints from taxpayers highlighting the added expense of printing new receipts, the Bureau of Internal Revenue (BIR) revoked the five-year validity of receipts and invoices. This would mean that validity of receipts can now last forever.
Types of Receipts
Manual Official Receipts
There are several types of official receipt booklets that you can register with the BIR, depending on your preferences and allotted budget.
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With Carbon: This is more expensive, and cardboard is needed to stop the information from being copied on the following page.
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Carbon-less: This is a less expensive option, but you will need carbon paper to recreate the details in the duplicate or triplicate copy (if needed).
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Duplicate or Triplicate Copy: The official receipt is available in duplicate or three copies. One white copy is given to the customer, and the second copy is kept in the booklet for bookkeeping and documentation. The third copy of a triplicate copy may be submitted to other departments apart from the accounting.
Looseleaf Official Receipt
This is commonly used as proof of the sale of a good or service, leasing of real estate, or other sales documents like acknowledgment receipts, collection receipts, billing invoices, etc., that are issued in typewritten or digital format.
What are acknowledgment receipts?
Acknowledgment Receipt, or Reimbursement Expense Receipt, is used when the payee is not a business entity and the BIR requires the payee to issue Official Receipts. An improvised receipt different from those set forth by the BIR shall be accepted for disbursements (ORs).
Who has the Authority to print?
No one is allowed to just simply print a receipt without the authorization of the BIR. A taxpayer business must apply to the Bureau of Internal Revenue (BIR) in order to receive the Authority to print a certificate.
Once registered, you must ensure that a BIR-accredited printer physically prints the Official Receipts.
What are the penalties for not complying?
Without the official receipt, it will be difficult for government agencies to regulate or monitor a business whether they are paying their taxes correctly.
Here are some of the penalties for incorrect or failure to issue receipts:
First offense |
|
Failure to issue receipts or sales or commercial invoices |
₱10,000 |
Refusal to issue receipts or sales or commercial invoices |
₱25,000 |
Issuing receipts that do not accurately represent and/or include all the information that must be displayed therein |
₱1,000 |
If the transaction's correct amount is missing from the information |
₱2,000 |
If the duplicate copy of the invoices is blank but the original copy thereof is detached from the booklet |
₱10,000 |
Possession or use of unregistered receipts or invoices |
₱10,000 |
For the use of unregistered cash register machines in lieu of invoices or receipts |
₱25,000 |
Possession or use of multiple or double receipts or invoices |
Not subject to Compromise |
For printing or causing, aiding or abetting the printing of: |
|
a) Receipts or invoices without authority from the BIR |
₱10,000 |
b) Double or multiple sets of receipts or invoices |
Not subject to Compromise |
c) Receipts or invoices not bearing any of the following: Consecutive numbers
|
₱5,000 |
Due to the printer's failure to file the necessary quarterly report as required by Section 238 of the Tax Code as amended |
₱1,000 |
Do freelancers or online sellers have to issue receipts?
Any income made is taxable, and that includes earnings from jobs/projects done as a freelancer. To avoid future problems, it is important to register your freelance business as soon as possible.
Recordkeeping provides insight into your business transactions regardless of whether a receipt is printed, digital, or written. Keeping your official receipt allows you to pay the precise amount due without missing any important detail.
In addition, it allows you to identify the most effective sales and marketing techniques, which lets you know which goods and services are in demand.
If you are uncertain of various taxes and their respective requirements or how to comply with tax filing deadlines, head on to Digest.ph to find more resources related to managing your business finance.
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