Tax Alert No. 8 [Revenue Memorandum Circular (RMC) No. 5-2021 dated 28 December 2020]

Simplified policies on the Application for Registration of Computerized Accounting System, Computerized Books of Accounts and/or its Components, including Electronic Storage System, Middleware and other Similar Systems

The Commissioner of Internal Revenue has issued RMC No. 5-2021 to provide the policies on the application for registration of Computerized Accounting System (CAS), Computerized Books of Accounts (CBA) and/or its components, including Electronic Storage System (ESS), middleware and other similar systems.

All taxpayers intending to use the systems mentioned above shall not be required to secure permit to use (PTU), but instead, shall be registered subject to the following policies:

1. Register the "System" by submitting the documentary requirements stated on the "Checklist of Documentary Requirements" (CDR) to the Revenue District Office (RDO) where the taxpayer is registered. BIR Form No. 1900 shall no longer be required for the submission of application for registration of the System.
2. The "System" shall comply with the standard functional and technical requirements.
3. Upon submission of complete documentary requirements, an Acknowledgement Certificate (AC) shall be issued within three (3) working days from receipt of the complete documents by the RDO.
4. System demonstration or pre-evaluation shall not be required prior to the use of the "System". However, post-evaluation shall be conducted to determine compliance with number 2.
5. All taxpayers with existing PTU CAS, CBA and/or its Components shall not be required to apply for registration. The approved PTU shall still be valid, except for the following circumstances:
   1. PTU was revoked upon discovery of its non-compliance with existing revenue issuances during the conduct of authorized audit activity, Tax Compliance Verification Drive (TCVD) or Post-Evaluation.
   2. Existence of major system enhancement or upgrade, which will require the filing of a new application for registration of the "System".
6. Taxpayer must submit a new application for registration in case of major system enhancement, such as but not limited to the following:
   1. Change in the functionalities of the system that will have a direct effect on the financial aspect of the system that includes modified computations and other financial-related issues that were considered;
   2. Addition or removal of modules or submodules within the system that will have a direct impact on the financial aspect of the system;
   3. Change in the system/software Version or Release Number that will have enhancements on the financial aspect of the system; and
   4. All other enhancements deemed as major system enhancement based on the recommendation of the technical evaluators after the comparative functionalities of the old and upgraded systems were presented by the taxpayer.
      
      
      In case of failure to submit a new application prior to the use of the enhanced system, the PTU originally issued shall be automatically revoked and the applicable penalties shall be imposed.
7. In case of minor system enhancements, e.g., user interface modification, bug fixes, performance improvements, etc., the taxpayer must submit a written notification to the RDO/LT Office stating the specific minor enhancements.

You may access the full version of the Circular and its annexes through the BIR website.