Philippines Clarifies and Expands Scope of E-Invoicing Mandate
The Philippine Bureau of Internal Revenue (BIR) has introduced Revenue Regulations 11-2025, outlining updated obligations regarding issuing and reporting electronic invoices. Issued after a series of implementation delays and slower-than-expected progress, the revised regulations also broaden the group of taxpayers required to comply with the forthcoming e-invoicing system, which is now set to take effect in March 2026.
Structured Invoicing Requirements and Format Standards
According to the new rules, taxpayers must generate e-invoices using a BIR-accredited invoicing system that produces data in a structured format, such as XML or JSON, or another format the BIR may mandate. This structured format is a prerequisite for seamless submission to the BIR's system.
While invoices can be transmitted between sellers and buyers in various digital formats, including PDFs via email, they must be derived from a structured data source. The regulations emphasize that a photo or scan of a paper invoice does not fulfill the definition of an electronic invoice under the law.
New Timeline and Broadened Taxpayer Coverage
Effective March 2026, businesses falling within the expanded scope must issue e-invoices. This includes:
- Entities engaged in e-commerce or internet transactions, covering the sale of goods, services, and digital content
- Taxpayers under the jurisdiction of the Large Taxpayers Service (LTS)
- Taxpayers classified as Large Taxpayers
- Taxpayers using Computerized Accounting Systems (CAS), Computerized Books of Accounts (CBA) integrated with accounting records, and other invoicing or sales software.
Reporting Obligation
The obligation to report e-invoice data will come into effect once the BIR’s system infrastructure—capable of receiving, storing, and processing transmitted data—is fully operational. Once in place, both the issuance and reporting duties will apply to:
- Taxpayers engaged in e-commerce regardless of size (classified as Small, Medium, and Large)
- Taxpayers under the jurisdiction of LTS or classified as Large Taxpayers
- Businesses using CAS, CBA with electronic invoicing, and other invoicing software
- Exporters of goods and services
- Registered Business Enterprises availing of Tax Incentives
- Companies using POS Systems
- Any other taxpayers as determined by the Commissioner.
Specific guidelines governing the Electronic Sales Data Reporting system will be issued separately. A release date for these additional rules has not yet been announced.
Exceptions and Enterprise-Wide Obligations
If a branch office is subject to e-invoicing and reporting requirements, these obligations automatically apply to the head office and all other branches within the same corporate structure.
However, micro-taxpayers—provided they are not already using e-invoicing tools—are exempt from these obligations but may still choose to participate voluntarily.
Tax Deductions for Compliant Businesses
To support both voluntary participation and compliance with the mandate, eligible businesses will be allowed to deduct part of their setup costs related to the electronic reporting system from their taxable income:
- Micro and small taxpayers may claim 100% of these costs;
- Medium and large taxpayers may deduct 50% of the qualifying setup expenses.
Penalties for Non-Compliance
Failure to adhere to the invoicing and reporting rules set out in Revenue Regulations 11-2025 will result in penalties, as specified in Sections 264 and 264-A of the Philippine Tax Code.
There’s more you should know about e-invoicing in the Philippines – learn more about the new and upcoming regulations.
