BIR SIMPLIFIES REGISTRATION OF COMPUTERIZED SYSTEMS
System demonstrations, long wait for permit to use computerized accounting system (CAS), and manual recording of accounts pending CAS registration: these are now history. On January 8, 2021, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) №5–2021, which simplified policies on the application for registration of CAS, computerized books of accounts (CBA) and its components, including the electronic storage system (ESS), middleware and other similar systems (Computerized Systems) of taxpayers.
This RMC is not unprecedented. Initially, applications for permit to use CAS, CBA and its components were filed at the respective revenue district or large taxpayers’ offices where the applicants are registered. Applications will only be processed if the requisite documents, such as a detailed description of the functions and features of the CAS, system and process flows, reports generated, and the like, are complete. The application will then be subjected to evaluation and system demonstration by the Computerized System Evaluation Team (CSET) at the BIR National or Regional Office. This particular step was the cause of bottlenecks and delays due to difficulty in scheduling the system demonstration, as well as the applicants having to configure their respective systems to address the comments of the CSET during the demonstration.
Just last year, the BIR issued RMC №10–2020, suspending the required PTU prior to the use of CAS, CBA and its components, subject to the fulfillment of several compliance requirements and post-evaluation by the BIR. However, RMC №10–2020 only applied to taxpayers with pending PTU applications to use CAS, CBA and its components.
RMC №5–2021 makes permanent the suspension of the requirement for permit to use Computerized Systems under RMC №10–2020. Effective in January 2021, RMC №5–2021 completely eliminates the requirement to secure a permit to use Computerized Systems from the BIR. Taxpayers can simply register the Computerized System by submitting the documentary requirements to the Revenue District Office (RDO) where they are registered. Upon receipt of the complete documentary requirements, the RDO shall issue an Acknowledgment Certificate within 3 working days. Taxpayers can then immediately use their Computerized Systems. System demonstration and pre-evaluation, which used to take several months, shall no longer be required. However, post-evaluation shall be conducted by the RDOs to ensure compliance of the Computerized Systems with the standards set forth in the RMC and other pertinent regulations.
While detailed guidelines and procedures on this matter have yet to be released, the simplified policies on registration of Computerized Systems are a welcome change to taxpayers, who will no longer be burdened by the long wait and rigorous pre-evaluation process before they can use their Computerized Systems. After all, it benefits the BIR to marshal the taxpayers to digitize their tax reporting and compliance.
Reychelle May B. Medina is a Mid-Level Associate at Gorriceta Africa Cauton & Saavedra (www.gorricetalaw.com). She is a member of the Tax and Corporate Departments of the Firm. Reychelle’s practice includes the handling and management of tax audit investigations, tax planning and restructuring, and conducting legal and financial due diligence.