More and more things are going digital or electronic: government IDs and licenses, medical prescriptions, payments, and even notarization of documents-just to name a few. Not to be undone, the BIR is poised to increase its electronic footprint by mandating taxpayers to issue electronic invoices (‘e-invoices’). Based on existing revenue issuances, we are on the cusp of its initial implementation.
Last August 25, 2026, I participated in a public consultation held by the BIR on the draft revenue memorandum circular (RMC) prescribing the policies and guidelines on e-invoicing. While the draft RMC mirrored much of what was already stated in existing regulations, there are more than enough new content to raise new concerns and challenges. Let’s unpack some notable ones.
FIRST. Covered taxpayers (i.e. those engaged in e-commerce/internet transactions, those within the jurisdiction of the Large Taxpayers Service, those that are classified as Large Taxpayers, and those using invoicing software) have only until December 31, 2026 to comply with the e-invoicing requirements.
This has been known pretty much since earlier revenue issuances. However, not many details have emerged since then and the draft RMC contains much of what taxpayers need to know in order to comply with the e-invoicing requirement. Even if the draft RMC is finalized today, it would only give taxpayers barely four months to configure their systems or purchase systems capable of complying with the e-invoicing requirements. The four-month compliance period is an extremely tall order; so much so that requests for extension have been constantly raised in the public consultation. Unfortunately, the BIR wants to push for the December 31, 2026 deadline-at least for now.
SECOND. In order to comply with the e-invoicing requirements, taxpayers may secure the services of an Electronic Invoicing Solution Provider (ESP). While it may be a feasible and effective way for taxpayers to be able to comply, the ESP contemplated under the draft RMC is limited to domestic service providers. In other words, taxpayers cannot secure the services of foreign ESPs.
This may be an issue especially for multinational corporations with centralized systems. It is highly likely that any ESP that these multinational corporations would employ are going to be foreign ESPs. Insisting on having only domestic ESPs would limit the choices available to taxpayers and possibly unduly affect how management maintain their centralized systems.
THIRD. By definition, e-invoices are system-generated invoices that are electronically issued to the buyer. To ensure that these electronically-issued e-invoices are authentic, QR codes would be included in the e-invoice itself. The QR code shall serve as a verification feature and shall contain, at a minimum, the information necessary to validate the authenticity of the e-invoice.
While adding security features on the e-invoice seems to be a very prudent measure, there are technical questions that are too basic to ignore. What would be shown when a QR code is scanned? What are these ‘information necessary to validate the authenticity of the e-invoice’? How can such information validate the e-invoice? Should the QR code instantly show the information or should it direct the scanner to a secure cloud database? If a cloud storage or database is needed, who will shoulder the cost of maintaining it? So far, there are no answers to these questions.
FOURTH. In the event of circumstances that prevent the generation or issuance of an e-invoice, taxpayers would be required to use manual invoices that are duly authorized by the BIR. The words ‘duly authorized’ mean that the manual invoice must be registered with the BIR by virtue of an Authority to Print.
This means that taxpayers mandated to adopt e-invoicing are also required to apply for an Authority to Print manual invoices. To put it differently, covered taxpayers are required to maintain the ability to issue both e-invoices and manual invoices. This puts additional administrative compliance burden on taxpayers since they will be required to simultaneously maintain two separate invoicing systems: electronic and manual.
FIFTH. Existing regulations require the e-invoices to be in a structured electronic format, specifically JSON, XML, or other BIR-prescribed format. On the other hand, the RMC seems to take a more liberal approach in that it allows file formats other than JSON that taxpayers are already using in their respective systems.
The purpose of determining the specific file format for the invoice data is due to the ability of the BIR’s system to receive and read the information contained in such files. Incompatibility between the BIR’s system and the file format may result in failure to recognize the data.
While it is welcome development to expand the acceptable file formats, it is yet unclear if the BIR’s system would be able to make actual use of structured invoice data in format other than those prescribed. If only limited types of file format would actually work, then taxpayers need to know immediately.
SIXTH. Prior to being authorized to transmit e-invoices, the draft RMC requires taxpayers to first secure a Permit to Issue (PTI). The PTI shall serve as the official authorization to generate e-invoices through a duly registered and compliant invoicing system.
While the BIR is trying to make the PTI application and issuance easy (through prescribing just a few documentary requirements and a quick processing period), it should be noted that the PTI is a separate permit from the Permit to Use (PTU) or Acknowledgment Certificate for a CAS/CBA. The draft RMC, therefore, adds another layer of administrative permit requirement on top of already existing ones.
SEVENTH. Perhaps the most glaring issue pertaining to e-invoicing is the express delineation of e-invoicing and electronic sales (e-sales) transmission. While the two are closely related, existing revenue issuances and the draft RMC emphasizes that the policies and guidelines for e-sales reporting are to be provided in future issuances. In other words, all the preparations being done by taxpayers right now are solely for e-invoicing.
Considering the significant effort and resources necessary to configure electronic systems, it may be more efficient to do configurations to accommodate both e-invoicing and e-sales reporting rather than treating them as separate requirements. Unless the BIR can ensure taxpayers that any configuration made to comply with e-invoicing would not be wasted when e-sales reporting is rolled out, I think doing both at the same time is significantly better.
I am sure that the BIR has its own reasons for trying to stick to the December 31, 2026 deadline. Nonetheless, such deadline should be weighed together with reasonableness and the capacity of taxpayers to actually comply.
The author is a partner of Du-Baladad and Associates Law Offices (BDB Law) (www.bdblaw.com.ph).
The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal, or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at jomel.manaig@bdblaw.com.ph or call 8403-2001 local 140.