Official Receipt and VAT Documentation

What is an Official Receipt?

An Official Receipt (OR) is a document acknowledging that payment was received. Before 2024, service providers issued ORs as their main sales document while sellers of goods issued sales invoices. The Ease of Paying Taxes Act (RA 11976) and RR 7-2024 changed this: the invoice is now the primary evidence for sales of both goods and services, and the OR is a supplementary document.

Legal Basis and Requirements

NIRC §237, as amended by RA 11976, requires all persons subject to an internal revenue tax to issue duly registered sales or commercial invoices for each sale of ₱500 or more, for any sale when the buyer asks, and for every sale by a VAT-registered person. VAT-registered persons must also follow the VAT invoicing rules in NIRC §113. An OR, collection receipt or payment receipt may still be issued, but only as proof of payment.

Information on an Invoice

Under NIRC §237 the invoice shows the seller's name, TIN, date of transaction, quantity, unit cost and description of the goods or nature of the service. A VAT invoice also states that the seller is VAT-registered, shows the VAT as a separate item, and marks exempt or zero-rated sales as such. For sales of ₱1,000 or more to a VAT-registered buyer, it shows the buyer's name, address and TIN (NIRC §113(B)).

Official Receipt vs. Invoice

The invoice records the sale and is the document the buyer uses to claim input VAT. The OR shows that payment was collected. Under RR 7-2024, supplementary documents such as ORs must carry the phrase "THIS DOCUMENT IS NOT VALID FOR CLAIM OF INPUT TAX" and cannot support an input VAT claim.

Registration and Numbering

Businesses using manual invoices and supplementary documents secure an Authority to Print from the BIR, free of charge, before an accredited printer can print them. Invoices must be serially numbered and show the business's name, TIN and address (NIRC §238, as amended by RA 11976). Every number issued, including cancelled documents, must be accounted for.

Transition for Unused ORs

Under RR 7-2024, unused ORs may be used as supplementary documents until used up, stamped "THIS DOCUMENT IS NOT VALID FOR CLAIM OF INPUT TAX". The option to convert unused ORs into invoices by stamping "Invoice" on them ended on December 31, 2024.

VAT Treatment

For VAT-registered businesses, output VAT is supported by the invoices issued, and input VAT may be credited only when evidenced by a VAT invoice (NIRC §110, as amended by RA 11976). The VAT amount must be shown separately from the selling price.

Electronic Invoices

Businesses may issue invoices through BIR-registered cash register machines, POS systems or electronic invoicing software, provided the system produces all the required information and keeps the records available for audit.

Record Retention and Audit Trail

Books of accounts and supporting records, including copies of invoices and receipts, are preserved for five years from the filing deadline of the return for the year of the last entry (NIRC §235, as amended by RA 11976). Missing records can lead the BIR to adjust reported sales or disallow deductions.

Penalties for Non-Compliance

Failure or refusal to issue invoices, issuing invoices that do not reflect the required information, and using multiple or double invoices are punished upon conviction by a fine of ₱1,000 to ₱50,000 and imprisonment of 2 to 4 years for each act (NIRC §264(a)). Printing invoices without BIR authority is also penalized under NIRC §264.

Common Issues in Practice

Common problems include businesses that still issue ORs as their sales document, printing without an Authority to Print, and unaccounted-for or cancelled documents. Buyers should ask for an invoice whenever they need to support an expense or an input VAT claim.