New Rules on Keeping, Maintaining and Registering Books of Accounts

Re-publishing the new rules on keeping, maintaining and registering of books of accounts pursuant to the new TRAIN Law. The memorandum circular is dated February 22, 2019 which re-emphasized the manner of keeping of books of accounts, the deadline for the registration of the books, the examination of the books and the retention period of accounting records. New to this rule are the registering of the books of accounts set prior to the deadline of filing the quarterly or annual income tax return, and the examination of books if gross sales or earnings exceed the VAT threshold which is P3,000,000.00 within the year.

The circular is set below:


REVENUE MEMORANDUM CIRCULAR No. 29-1019
Date :  February 22, 2019

SUBJECT : Keeping, Maintaining and  Registration of Books  of Accounts
TO : All lnternal Revenue Officers and Other Concerned

Pursuant to Section 232 of the National Internal Revenue Code (NIRC) as amended by Republic Act (R.A.) No.   10963 and in relation to R.A. No. 11032 otherwise  known as Ease of Doing Business  and Efficient Government  Service Delivery Act of 2018,  this Circular  is being issued  to continuously  support our  government  programs  in  improving  our  country's competitiveness ranking in starting a business relative to (1) keeping and maintaining of books of accounts, and (2) registration deadline of books of accounts.


Section  1. Keeping of Books of Accounts

All  corporations, companies,   partnerships  or  persons  required  by  law  to  pay  internal revenue  taxes  shall  use  and  keep  relevant  and  appropriate  set  of  bookkeeping  records  duly authorized  by  the Secretary  of  Finance  wherein  all  transactions  and  results  of operations  are shown and from  which all taxes due the Government  may readily and accurately  be ascertained and determined  any time of the year, pursuant to Sec. 232 of R.A. No. 10963.

Taxpayers  may maintain its books of accounts in any of the following manner:
(1) Manual Books of Accounts;
(2)  Loose leaf Books of Accounts (with Permit to Use);
(3) Computerized  Books of Accounts (with Permit to Use).

Books of Accounts shall be kept at all times in the place of business of the taxpayer. Such books and registers, together with records, vouchers, and other supporting  papers and documents prescribed  by the Bureau of Internal Revenue (BIR), kept by taxpayers shall be preserved  intact, unaltered  and  unmutilated.  Keeping  of two or  more  sets  of  records  or  books  of  accounts  is prohibited.

All  entries  in   the Manual Books  of  Accounts  shall  be  handwritten.  Printouts  of the accounting   records  pasted/glued/inserted   onto  pages/sheets  of  the  registered  Manual  Bound Books of Accounts are prohibited and subject to penalty pursuant to existing revenue issuances.

Section  2. Registration of Books of Accounts

The manual books of accounts shall be registered before the deadline for filing of the first quarterly income tax return or the annual income tax return whichever comes earlier.

Loose leaf books of accounts/invoices/receipts and other accounting records shall be permanently  bound  and presented for registration together with a sworn  statement  attesting  to the correctness  of the entries made, and the number of all invoices, receipts, books of accounts used  for  the  period  covered  to  the  RDO/LTAD/ELTRD/  LTD-Cebu/LTD-Davao   where  the Head Office  or Branch  is duly  registered  on or before “15  days the end of each taxable year"  or "within   15 days from  the  closure of business  operations"  whichever  comes  earlier, unless extended  by the Commissioner  or his duly authorized  representative, upon request of the taxpayer  before the lapse of said period.

Computerized Books of Accounts and other accounting  records in electronic  format shall be  submitted   and  registered  to  the  RDO/LTAD/ELTRD/LTD-Cebu/LTD-Davao   where  the Head Office  or Branch is duly registered within thirty (30) days from the close of each taxable year  or "within  30  days  from the  closure  of  business  operations"  whichever  comes  earlier, unless extended  by the Commissioner  or his duly authorized  representative,  upon request of the taxpayer  before the lapse of said period.

Section  3. Examination of Books of Accounts

Corporations,  companies,   partnerships  or  persons  whose  gross  annual  sales,  earning, receipts  or  output  exceed  Three  million  pesos  (Php3,000,000),   shall  have  their  books  of accounts  audited and examined yearly by independent Certified Public Accountants.

Section 4. Retention Period

All taxpayers are required to preserve their books of accounts, including subsidiary  books and other accounting records, for a period of ten (10) years reckoned from the day following  the deadline  in filing a return. or if filed after the deadline,  from the date of the filing of the return, for the taxable  year when the last entry was made in the books of accounts:  Provided that,  within the first five (5) years reckoned from the day following  the deadline in filing a return. or if filed after  the deadline,  from  the date  of  the filing of the  return, for the taxable  year when the  last entry  was  made in the  books of accounts,  the taxpayer  shall  retain hardcopies of the  books of accounts,  including  subsidiary  books and other accounting  records. Thereafter,  the taxpayer may retain only an electronic  copy of the hardcopy (paper) of the books of accounts, subsidiary  books and  other  accounting   records  in  an  electronic  storage  system  which  is  compliant  with the requirements set forth under Section  2-A of Revenue Regulations No. 5-2014.

This Circular revokes all other issuances inconsistent herewith and shall take effect immediately.  All  internal  revenue  officers  and  employees  are  hereby  enjoined   to  give  this Circular  a wide publicity as possible.


(Original Signed)
CAESAR  R. DULAY
Commissioner  of Internal Revenue



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