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As featured on PhilStar:  Five is just a number


“If it won’t matter in five years, don’t spend more than five minutes worrying about it.” Sounds familiar? This concept is popularly known as the “5x5 Rule.” Along with this rule the number five has its own significance in different fields.

In  mathematics, five is the only prime number ending in “5”. In careers, the five-year itch is the belief that people who are about to hit the five-year mark in their chosen profession get less satisfied, causing them to decide whether to stay or leave. In medicine, five years is generally the period that allows doctors to evaluate the prognosis of a disease. 

From the tax perspective, five may be a dreaded number for taxpayers engaged in trade or business because it symbolizes the five-year validity period of their Authority to Print (ATP) or Permit to Use (PTU) Computerized Accounting System (CAS), Cash Register Machines (CRM), and Point-of-Sale (POS). Having a validity period means that there is also a corresponding expiration date. Hence, just like commodities, an expired ATP/PTU needs to be replaced because it is no longer valid in the eyes of the BIR. This translates to an additional cost to the taxpayer.

Most businesses operate using a simple mechanism known as the financial framework: Sales – Costs = Profits. As the framework suggests, the key to delivering profits is keeping the sales and cost components unreasonable. With serious challenges caused by the pandemic on the sales side of the equation, incurring additional costs (e.g., for printing new sets of manual receipts/invoices or applying for the renewal/reissuance of a PTU due to the expiration of the ATP or PTU, respectively) is not written on a taxpayer’s wishlist.

Luckily for taxpayers, the Bureau of Internal Revenue (BIR) paid attention to them and issued Revenue Regulations (RR) No. 06-2022 last 30 June 2022, prescribing the removal of the five (5)-year validity period on receipts/invoices. The RR took effect last 16 July 2022 or fifteen (15) days after its publication in a newspaper of general circulation last 01 July 2022.

According to the RR, it shall cover taxpayers who will apply for the following:

  1. ATP Official Receipts (ORs), Sales Invoices (SIs) and Other Commercial Invoices (CIs) based on Revenue Memorandum Order (RMO) No. 12-2013;
  2. Registration of CAS/Component of CAS based on Revenue Memorandum Circular (RMC) No. 10-2020, RMC No. 5-2021 and RMO No. 9-2021; and,
  3. PTU CRMs and POS machines based on RR No. 11-2004 and RMO No. 10-2005.

Under Section 3 of the RR, the five-year validity period of the PTU and/or system-generated receipts/invoices based on the abovementioned revenue issuances is removed. Hence, all PTUs to be issued shall be valid unless revoked by the BIR on grounds such as the following:

  1. Tampering of sales data/integrity of the data and/or software specification/features to alter/avoid the recording of a sale transaction;
  2.  Any major repair, upgrade, integration and modification/alteration without prior notification and approval by the BIR office concerned, which includes: (a) change in the functionality of the system; addition or removal of modules or submodules within the system that will have a direct impact on the financial aspect of the system; (c) change in the system/software version or Release Number that will have enhancements on the financial aspect of the system; and, (d) all other enhancements that will be deemed as a major system enhancement based on the recommendation of the technical evaluators of the BIR; and,
  3. Any violation(s) on the policies and procedures for registration under RMO No. 10-2005 and RMO No. 9-2021, and other related revenue issuances.

Said section further provides that the phrase “THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE PTU” and the phrase “Valid Until” shall be omitted at the bottom portion of the system generated receipts/invoices. Similarly, ATP principal and supplementary receipts/invoices inclusive of its serial numbers and its usage shall also have no expiration. Thus, the phrase “THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE ATP” and the phrase “Valid Until (mm/dd/yyyy)” on the manual receipts/invoices shall also be omitted or disregarded for unused receipts/invoices.

As to the transitory provisions, the RR provided that for manual receipts/invoices with ATP, the validity date and the validity phrase printed on unused manual principal and supplementary receipts/invoices shall be disregarded and the same may still be issued until fully exhausted. However, the subsequent printing of manual receipts/invoices upon the effectivity of the RR must not reflect the validity phrase and shall no longer adopt the five-year validity. For receipts/invoices generated from CAS, Component of CAS, CRMs and POS machines with PTU or Acknowledgement Certificate (AC), system-generated receipts/invoices that were issued with the validity phrases based on the previously approved system/software with corresponding PTU/AC shall be disregarded. However, the said system/software generating the receipts/invoices must be reconfigured to omit the validity phrases.

RR No. 06-2022 is a sigh of relief for taxpayers whose ATP/PTU shall expire in the next few months or years. Hopefully, taxpayers will appreciate the BIR’s move in heading towards the direction of minimizing taxpayers’ non-added value costs in running their businesses. While the number five may have different meanings, affected taxpayers may now rest easy, focus on what truly matters, and declare that to them, five is just a number.

Ma. Celina Noreen D. Reyes
Assistant Manager
KPMG in the Philippines

Ma. Celina Noreen D. Reyes is Assistant Manager from the Tax Group of KPMG R.G. Manabat & Co. (KPMG RGM&Co.), the Philippine member firm of KPMG International. The firm has been recognized as Tier 1 in Transfer Pricing Practice and Tier 1 in General Corporate Tax Practice in the Philippines by the International Tax Review.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG RGM&Co.

For more information on KPMG in the Philippines, you may send a message through ph-kpmgmla@kpmg.com, social media or visit www.home.kpmg/ph.