e-Invoicing in the Philippines: navigating the mandatory compliance since 2019

Back in 2019, the Philippines rolled out its Digital Transformation Strategy initiative for 2022 in an attempt to digitize the economy. From 2024, all taxpayers are expected to adopt the system, which means overhauling how you invoice your clients and submit your tax returns. 

While it might seem like a big change, it’s easy to get to grips with using an e-invoice when you understand what’s expected of you. Keep reading for a deep dive into e-invoicing in the Philippines, so you’re ready to file next April. 

Key Takeaways:

• e‑Invoicing is now mandatory for Philippine businesses, gradually covering all taxpayers to improve digital tax compliance.
• Electronic invoices must be submitted to the BIR’s Continuous Transaction Control (CTC) platform within three days of each transaction.
• The BIR validates e‑invoices and confirms acceptance or denial, helping reduce errors and ensure compliance.
• e-Invoicing aims to improve tax compliance, reduce errors and fraud, automate invoicing workflows, and make VAT reporting and audit processes easier for businesses.
• All e-invoices must be stored and retrievable for compliance purposes, with long-term archiving (up to ten years) required under the BIR guidelines.

What is electronic invoicing? An overview for Philippine businesses

If you’re a business operating in the Philippines, you’re probably asking yourself: “What is electronic invoice, and what is required of me?” 

An electronic invoice system is the process of sending, receiving and storing an invoice report with the Philippine government through the Continuous Transaction Control platform. This is done after final invoices are submitted to B2B clients and includes these documents:

• Sales invoices 
• Receipts
• Debit and Credit notes
• Accounting documents

You must do this up to three days after the transaction is complete. The Bureau of Internal Revenue (BIR) will then validate these documents and send you confirmation of acceptance or denial.

Getting rid of physical invoices and adopting a digital approach makes it far easier to keep track of documents that you will need to meet your taxation requirements. It’s designed to automate invoicing so you can reduce the chance of errors and speed up payments to your business. It also makes it far easier to stay compliant with the BIR.  

Why e-invoicing is mandatory in the Philippines

Electronic invoicing services (EIS) were made mandatory in the Philippines to improve how businesses settle their taxes with the BIR, making it far easier to meet their tax obligations. 

It’s also a way for the Philippine government to reduce tax fraud since all documents must be submitted as proof online. Digitalizing invoices also makes VAT reporting easier, as businesses can verify that they’ve paid their VAT. 

Transitioning to e-invoicing is a great move if you’re a Philippine business. It allows you to automate how you process your invoices so that you can avoid errors when reporting your income. It also speeds up invoicing, meaning you can get paid for your services far quicker. 

South Korea is one of the earliest pioneers of e-invoicing, introducing its own system in 2010. Under this, they saw a major reduction in tax evasion. Businesses also reported finding managing their VAT returns and audits far easier. South Korea played a major part in helping the Philippines develop its own electronic invoice system.

The benefits of e-invoicing for Philippine businesses

Switching to e-invoicing is designed to make tax reporting far easier for your Philippine business. Here are the main advantages of digitizing your business records:

• Instant VAT reporting: submit VAT in real-time to better understand your obligations. 
• Automated invoicing: using electronic invoicing software makes it much easier to streamline your accounting tasks. 
• Faster payments: Electronic invoicing solutions allow you to issue invoices instantly and receive quicker payments for your services. 
• Comply with tax regulations: e-Invoicing ensures you meet requirements set by BIR so you can minimize the risk of audits.

How e-Invoicing works in the Philippines

e-Invoicing involves inputting your data in JSON format into the electronic invoice system. This can be accessed on the web, and there are three portals you need to be aware of. These are:

• EIS Taxpayer Portal 
• EIS Certification Portal 
• EIS Portal for Revenue Officers 

The portal you will use as a business is the EIS Taxpayer Portal, where you can generate, submit, and manage your electronic invoices. Once submitted, invoice reports will be sent to the Continuous Transaction Control (CTC) platform, where documents will either be confirmed or denied. 

You can also choose to use e-invoicing and receipt providers like QuickBooks, but you must register this with the BIR before using it to generate any of your electronic invoices. Once your invoices are generated and signed using external software, you can submit them to the BIR through the EIS Taxpayer portal. 

In the Philippines, all invoices must be submitted to the BIR and stored for up to ten years.

Choosing the right e-invoicing provider in the Philippines

An e-invoicing provider will make it easier to comply with Philippines tax regulations, helping you to streamline digital invoicing. When comparing electronic invoicing solutions, look for: 

• Compliance with the most recent BIR guidelines 
• Integration with other accounting software solutions like Quickbooks 
• Real-time reporting for VAT submissions and the option to track the status of invoices 
• Excellent customer support

The most popular e invoicing providers in the Philippines include Concur, Vertex, and edicomgroup. Each of these e invoicing providers will help your business implement an effective e-invoice system.