March 17, 1947

REVENUE REGULATIONS NO. V-1

THE BOOKKEEPING REGULATIONS
(As Amended)

TO : All Internal Revenue Officers and Others Concerned

CHAPTER I
Scope and Definition of Terms

SECTION 1. Scope. Pursuant to the authority granted in section 338, in relation to section 4 (j) of
Commonwealth Act No. 466, otherwise known as the National Internal Revenue Code, the following
regulations relative to the keeping of books of accounts, records, registers, and the issuance of invoices,
receipts, tickets, and other supporting papers and documents by persons subject to internal revenue
taxes, and the manner of recording business transactions are hereby promulgated and shall be known as
Revenue Regulations No. V-1 or "The Bookkeeping Regulations."
SECTION 2. Definition of Terms. As used in these regulations, the following words and phrases shall
be taken to mean as follows:
"Persons" include natural persons and partnerships, associations companies or corporations, no matter
how created or organized.
"Books of accounts" shall include the journal and the ledger and their subsidiaries, or their equivalents.
"Journal" is a book of original entry in which the happenings or transactions affecting the business of a
taxpayer are recorded consecutively day by day as they occur:
"Ledger" is a book of final entry to which are posted the classified accounts or items of all transactions
entered in the journal or its equivalent.
"Simplified set of Bookkeeping Records" consists of the record of duly sales and cash receipts, the record
of daily purchases, expenses and cash disbursements, record of the summary of transactions, and the
yearly statements of net worth and operations, which may be in combined form or in separate booklets.
Said records should be specially designed for each class or kind of trade or business and prepared by a
certified public accountant, should conform substantially with the forms illustrated in Revenue
Regulations No. V-13, should be regularly bound, and may be printed, mimeographed or typewritten.
(As amended by Sec. 2, Reg. No. V-13 and Sec. 1, Rev. Reg. No. V-43.
An "independent certified public accountant" is one who is in fact independent. In other words, an
accountant will not be considered independent with respect to any person in whose business the
accountant has any financial interest, direct or indirect, or in which he is, or was during the period of the
report, connected as a promoter, underwriter, voting trustee, director, officer, or employee. A certified
public accountant whose work is subject to the supervision and control of the taxpayer, or who is
employed to keep the books of accounts or to supervise the keeping of the said, accounts, cannot audit
the latter's books of accounts. He must, therefore, be employed exclusively to audit the books of
accounts of the taxpayer and not for any other purpose, nor bear to him any business or professional
relationship which may in any way affect the independence of his professional actuations. A firm of
certified public accountants, one of the members of which is actually keeping or supervising the keeping
of the books of accounts of a certain taxpayer, cannot audit or examine the said books of account of the
latter. (As amended by Sec. 1, Rev. Reg. No. V-20.)

CHAPTER II
Books of Accounts and Audit by Independent Certified Public Accountants

"All corporations, companies, partnerships, or persons required by law to pay internal revenue taxes
shall keep a journal and a ledger, or their equivalents: Provided, however, That those whose gross
quarterly sales, earnings, receipts, or output do not exceed five thousand pesos shall keep and use a
simplified set of Bookkeeping Records duly authorized by the Secretary of Finance wherein all
transactions and results of operations are shown and from which all taxes due the Government may
readily and accurately be ascertained and determined any time of the year. And provided, further, That
in the case of corporations, companies, partnerships or persons whose gross quarterly sales, earnings,
receipts or output exceed twenty-five thousand pesos, shall have their Books of Accounts audited and
examined yearly by Independent Certified Public Accountants and their income tax returns accompanied
with certified balance sheets, profits and loss statements, schedules, listing income-producing
properties and the corresponding incomes therefrom and other relevant statements." (Sec. 334,
National Internal Revenue Code, as amended by Sec. 2, Rep. Act No. 438 and Sec. 1, Rep. Act No. 658.)
2(1). RULE NO. 60, RULES AND REGULATIONS OF THE BOARD OF ACCOUNTANCY, DUTIES OF CERTIFIED
PUBLIC ACCOUNTANT: The Board, pursuant to Section 4 of Act 3105, as amended, hereby
recommends that Section 60 be amended to read as follows:
"No Certified Public Accountant shall certify to the financial statement of any enterprise which, during
the period covered by the report, is owned or controlled by him or his spouse, or in which he or his
spouse is a partner, stockholder, promoter, voting trustee, transfer agent and registrar, officer, director
or salaried employee. The same prohibition applies to a firm engaged in the practice of accountancy in
the Philippines if any of the partners or associates thereof be any of the above in the enterprise."
"Neither shall a Certified Public Accountant or a firm engaged in the practice of accountancy in the
Philippines certify to the financial statements of any enterprise which, during the period covered by the
report, is owned or controlled by his, or the partner's or associate's, relatives within the third civil
degree, by affinity or consanguinity, as computed under the rules of civil law; or, in which any of said
relatives is a partner, officer, treasurer, director, manager or voting trustee; or, in which said relatives
own or are committed to own an aggregate of 5% or more of the subscribed capital stock, or even if
their shareholding is less than 5% of the subscribed capital stock but such interest is substantial in
relation to their personal fortune.
"The relatives of a Certified Public Accountant or of the partner or associate in the case of a firm of
accountants, within the third civil degree, by affinity or consanguinity, as computed under the rules of
civil law, are as follows:
1. Parents
2. Grandparents
3. Great grandparents
4. Uncles or aunts and their spouses
5. Brothers or sisters and their spouses
6. Nephews or nieces and their spouses
7. Children and their spouses
8. Grandchildren and their spouses
9. Great grandchildren and their spouses
10. Parents-in-law
11. Grandparents-in-law
12. Uncle or aunt-in-law and their spouses
13. Brothers or sisters-in-law and their spouses
14. Nephews and nieces-in-law and their spouses
"The Board finally recommends that Section 60, as amended, take effect one year after its approval by
the Office of the President. (Amendment to Rule 60 of the Rules and Regulations of the Board of
Accountancy, dated Dec. 27, 1962) (NOTE: The said amendments were indorsed by the Bureau of
Internal Revenue in its indorsement to the Department of Finance dated March 31, 1964).
2(2) INDEPENDENCE OF CERTIFIED PUBLIC ACCOUNTANTS: A certified public accountant may not be
retained by a Company as its external auditor and at the same time appoint him as stock and transfer
agent even if he will not be paid for the latter work. (B.I.R. Ruling No. 251, s. 1961).
2(3) CERTIFIED PUBLIC ACCOUNTANT: As used in section 334 of the Tax Code, the term "certified
public accountant" presupposes one who is qualified to engage in the active practice of accountancy.
(B.I.R. Ruling No. 406, s. 1960)
2(4) PART-TIME EMPLOYMENT OF CHILDREN OF CERTIFIED PUBLIC ACCOUNTANT: A certified public
accountant, whose children are employed as part-time bookkeepers of certain taxpayers, does not lose
his independence as such accountant, it not appearing that he has any financial interest direct or
indirect in the business of the said taxpayers. However, in case said accountant is related by
consanguinity to the taxpayer, to its president, manager or principal stockholder, he must state such fact
in his certificate. (B.I.R. Ruling, May 29, 1963; File No. 106.02)
2(5) KEEPING OF BOOKS OF ACCOUNTS REASONS FOR REQUIREMENT: Taxpayer is a foreign
corporation organized under the laws of Japan and engaged in maritime transportation with vessels
touching Philippine ports. It has been paying, through its local agent, the American Steamship Agencies,
the common carrier's fixed and percentage taxes; however, it does not, either personally or through its
agent, keep books of accounts and other accounting records and so there is nothing upon which may be
based the determination of its taxable gross receipts.
The issue is whether taxpayer, being a non-resident foreign corporation, is exempt from the obligation
of keeping books and other accounting records in the Philippines.
The vessels of taxpayer come to the Philippines and carry passengers and freight therefrom. As it is
subject to common carrier's tax which it is actually paying, the taxpayer should keep the required
records, pursuant to Section 334 of the Tax Code, as implemented by Revenue Regulations No. V-1,
otherwise known as the Bookkeeping Regulations. Moreover, to hold otherwise would be to leave to the
mercy of the taxpayer the amount of taxes it should pay. As correctly stated by the Court of Tax Appeals
in the case of "Maria B. Castro vs. Collector (CTA Case No. 141, Dec. 291, 1956):
"The reason for the requirement to keep books of accounts is stated in the law (Sec. 334, Tax Code)
itself, that is, in order that all taxes due the government may readily and accurately be ascertained and
determined any time of the year." (B.I.R. Ruling No. 108, s. 1962, dated Oct. 3, 1962)
Mere generalization regarding the existence of falsified invoices, without positive indications of
truthfulness, is not sufficient to overthrow the book entries especially when it is made to appear that it
is done to suit the personal convenience of petitioner. (Ibid.)
SECTION 3. Persons Required to Keep Books of Accounts: Persons required by law to pay internal
revenue taxes whose gross quarterly sales, earnings, receipt, or output, whether subject to percentage
tax or not, exceed five thousand pesos (P5,000), are required to keep books of accounts in accordance
with the standard accounting system. The said books of accounts shall consist of journal and a ledger, or
their equivalents, and shall contain all information necessary for the accurate determination of the
internal revenue taxes due on their businesses.
3(1). VENDORS INSIDE PUBLIC MARKET REQUIRED TO KEEP BOOKS OF ACCOUNTS: The fact that
Filipinos selling meat in public market places are exempt from the fixed and sales taxes does not relieve
them from the duty of keeping books of accounts. (B.I.R. Ruling No. 266, s. 1960).
3(2). VENDORS INSIDE PUBLIC MARKET, LIABLE TO KEEP BOOKS. Public market vendors selling meat,
poultry, fish, fruits, vegetables and other food products though exempt from the business tax are,
nevertheless, required to keep books of accounts, because they are, in proper cases, subject to income
and additional residence taxes. (B.I.R. Ruling No. 120, s. 1960)
3(3). GROSS INCOME IN RELATION TO THE USE OF BOOKS OF ACCOUNTS: Where the gross sales,
receipts, or gross value of output of a taxpayer exceeds P5,000 during any quarter of the year, he cannot
avail himself of the use of the simplified set of bookkeeping records even if during the other quarters his
gross sales, receipts, or gross value of output are only P5,000.00 or less. (B.I.R. Ruling No. 42, Jan. 21,
1953)
3(4). BOOKS OF ACCOUNTS TO BE KEPT BY BRANCH ESTABLISHMENTS: An owner of a store who
maintains a branch establishment need not keep two sets of books of accounts if the branch store
merely buys goods or merchandise for the principal store and no sale is effected in the former, provided
that memoranda of transactions therein are kept and duly taken up in the books of accounts of the
principal store; otherwise, the branch establishment should be provided with separate books of
accounts (B.I.R. Ruling dated Sept. 12, 1955, File No. 106.02)
Purchases of the branch store made in the name of the principal store should be treated by keeping a
memorandum thereof and taken up in the books of accounts of the principal store. (Ibid.)
3(5). ACCRUAL AND CASH BASIS IN KEEPING BOOKS OF ACCOUNTS: A taxpayer cannot be permitted
to keep his books of accounts on both the accrual and cash basis. (B.I.R. Ruling dated Sept. 23, 1953)
SECTION 4. Journals, Ledgers, and Their Equivalents: The journal may consist of only one book, the
general journal. Its equivalents may consist of several books such as sales book, purchase book, cash
book and such other books as the taxpayer may find convenient for his business. Such books are also
books of original entries where all the daily transactions, whether cash or otherwise, are recorded in
their chronological order. A journal, in order to comply with the provisions of these regulations, must
contain all the transactions affecting the business. Every entry in the general journal shall carry a brief
but complete explanation of the nature of the business transaction and be supported by proper
vouchers. The general journal shall be in bound form. Where subsidiary journals are used, the same may
be either bound or in loose-leaf form provided that the entries in loose-leaf sheet shall be summarized
at the end of every month in the general journal which shall then be posted to the ledger.
The ledger, like the journal, may consist of one book, the general ledger. Its equivalents, may consist of
several ledgers such as customers' ledger, creditors' ledger, stock ledger, and such other books as the
taxpayer may find convenient for his business. All entries in the journal must be posted to the ledger not
later than seven days from the date of the transaction and shall be classified in the ledger so as to show
the assets, liabilities, capital, and the operating accounts from which a balance sheet, and a profit and
less statement covering the operation of the business can be prepared. No entry shall be made in the
ledger or its equivalents unless said entry originates from the journal or its equivalents. The general
ledger shall be in bound form. Where subsidiary ledgers are used, the same may be either in book form
or in loose-leaf form, provided that the entries in the loose-leaf subsidiary ledger are reflected in the
general ledger by a controlling account.
In meritorious cases and upon written authority of the Commissioner of Internal Revenue the use of the
general journal and the general ledger in loose-leaf form may be allowed. 1
4(1) PROCEDURE IN THE ISSUANCE OF PERMITS TO USE LOOSE-LEAF BOOKS OF ACCOUNTS, RECORDS,
INVOICES AND RECEIPTS.

TO: All Regional Directors, Chief Revenue Officers, Collection Agents and Others Concerned:
In order to insure effective control and supervision in the issuance of permits to use loose-leaf books of
accounts, records, invoices and receipts, the following procedure is hereby promulgated for the
guidance of all concerned:
1. All requests for permit to use loose leaf books of accounts, records, invoices and receipts should
be filed either in the office of the Chief Revenue Officer or the Regional Director. The said request
should be referred to the fieldmen of the inspection district who has jurisdiction over the taxpayer, for
appropriate investigation.
2. The investigation should be conducted in accordance with the following:
(a) The necessity of the use of the loose leaf forms requested should be determined and the reason
or reasons for recommending the approval or disapproval of the request should be clearly stated in the
report;
(b) The report should, likewise, include a statement of the privilege or fixed taxes paid by the
taxpayer by citing the official receipt number, date of payment, amount paid and the corresponding
paragraph and schedule, including a statement whether the business of the taxpayer has been duly
registered with the Bureau of Internal Revenue. The examiner should investigate whether all the
privilege and fixed taxes due on the activities engaged in by the taxpayer have been duly paid;
(c) The taxpayer should be informed by the investigating examiner that a condition precedent to the
issuance of a permit to use loose-leaf invoices and receipts is that the taxpayer upon receipt of the
permit should immediately register with the Collection Agent or the Chief Revenue Officer, a register
which should be a bound book. The bound book should show in detail and in column the serial numbers
of the invoices or receipts printed for use by the business on the left side of the book. Every additional
printing should be recorded on the same side of the bound book. On the right hand side, the serial
numbers of the invoices and receipts used during the week, together with the total amount involved
should be entered weekly.
3. Upon receipt by the Chief Revenue Officer of the report of the investigating examiner, he must
check with his IBM list of delinquent accounts to determine whether the taxpayer owes anything to the
Bureau. If the taxpayer is delinquent in the payment of his tax liabilities, such fact should be
communicated to the taxpayer with the request that the delinquent taxes should be paid, otherwise his
request to use loose leaf forms will not be given due course. If there is no delinquency, on the part of
the taxpayer, the report should be forwarded to the Regional Office.
4. Upon receipt by the Regional Office, the reports should be processed to determine further
through the Collection Branch whether the taxpayer has no delinquent tax liabilities; through the
Investigation Branch to determine whether the taxpayer has derogatory information regarding tax
evasion; and through the Income and Business Tax Branch to determine whether the taxpayer has any
pending report for processing which will involved a big amount of deficiency tax. In case of positive
information in any of the above-mentioned branches, the Regional Director should inform the taxpayer
of such fact, informing him that his request cannot be given due course.
5. All requests for permit to use loose leaf invoices, receipts, books and other records forwarded
from Regional Offices should be processed in the Business Tax Division of the National Office. The
Business Tax Division, before processing, should forward the papers to the Delinquent Accounts Division
for notation by the latter division of any delinquency of the taxpayer as shown by its record. If the
taxpayer has any delinquency, the Business Tax Division should inform the taxpayer that his permit
cannot be given due course unless he settles his obligations with the bureau.
6. In the preparation of the permit to use loose leaf invoices which should be prepared for the
signature of the Deputy Commissioner, the taxpayer should be required to bind the loose leaf forms
within fifteen (15) days after the end of his taxable year and the condition to register a bound book for
recording of the serial numbers of invoices printed and serial number of invoices used within the week
and the amount involved. The letter should likewise contain a statement that if the taxpayer is
discovered to have violated any of the provisions of the bookkeeping regulations, his permit to use
loose-leaf forms will be immediately cancelled.
7. The permit should be duly numbered and a permit register should be kept in the Business Tax
Division showing the number of the permit, name of the taxpayer, address, nature of loose-leaf form to
be used and such other information as may be necessary for the keeping of the register.
8. All permits to be issued under this Circular are to be considered on a permanent basis unless
otherwise revoked. Permits issued previous to this Revenue Memorandum Circular which were issued
on an annual basis should be renewed at the end of the term of the permit and must undergo the same
process as that required in this Circular.
This Revenue Memorandum Circular revokes all Circulars or Orders previously issued which are
inconsistent herewith.
This Circular shall become effective upon approval.
(Revenue Memorandum
Circular No. 48-64.
dated Oct. 21, 1964)

4(2). REVOCATION OF AUTHORITY TO USE LOOSE-LEAF INVOICES: Repetition of the failure by a

taxpayer to submit within the prescribed period a sworn certificate to use loose-leaf books of accounts
or invoices, will constrain this Office to revoke the authority granted to the taxpayer to use said loose-
leaf books of accounts. (B.I.R. Rulings Nos. 446, s. 1959; 351, s. 1960; and 142, s. 1961).
4(3). PERSONS OPERATING "HOME INDUSTRIES": Persons operating "home industries" are required to
keep and use books of accounts, namely, the journal and the ledger or their equivalents where all their
business transactions should be duly recorded. (B.I.R. Ruling No. 220, s. 1960).
4(4). CERTIFICATE REGARDING THE USE OF LOOSE-LEAF BOOKS OF ACCOUNTS: As in the case of
loose-leaf invoices, the requirements imposed upon persons or corporations authorized to use loose-
leaf books of accounts to submit within a certain period a sworn statement certifying to the number of
pages used during a given period is neither a provision of the Tax Code nor a regulation of the
Department of Finance issued in conformity therewith. Accordingly, failure to submit such statement on
time does not constitute a violation of any internal revenue law or regulations and, therefore no
compromise penalty can be imposed for said failure.
However, as in the case also of loose-leaf invoices, repetition of such failure will constrain the Bureau of
Internal Revenue to revoke the authority granted to use loose-leaf books of accounts. (B.I.R. Ruling No.
351, s. 1960)
4(5). BINDING OF JOURNAL AND LEDGER: As the Bookkeeping Regulations merely requires that the
journal and ledger be in bound form without specifying the manner or the device to be used in binding,
any device may be used as long as said books of accounts are in book form. Accordingly, binding of the
books by the use of post binders and roundhead fasteners is sufficient compliance of the Regulations.
(B.I.R. Rulings No. 138, Feb. 20, 1959).
4(6). CASH RECEIPTS BOOK IN LOOSE-LEAF FORM: A cash receipt book is a part of a journal and,
therefore, the use thereof in loose-leaf form is subject to the requirements on the use of loose-leaf
books of accounts. Accordingly, the certificate attesting to the number of sheets used in a loose-leaf
cash receipts book should be under oath. (B.I.R. Ruling No. 225, s. 1959).
4(7). NO TRANSACTIONS MADE IN THE MAIN ESTABLISHMENT: Where no sales are effected in the
main establishment, no books of accounts and other accounting records needs be kept and used by said
establishment. On the other hand, where sales are made in both the main and branch establishments,
all should keep and use books of accounts and accounting records. (B.I.R. Ruling No. 145, s. 1959).
4(8). UNAUTHORIZED USE OF THE JOURNAL AND LEDGER IN LOOSE-LEAF FORM: The unauthorized
use of loose-leaf general journal and ledger is a violation of section 4 of the Bookkeeping Regulations,
punishable under section 352 of the Tax Code. (B.I.R. Ruling No. 264, s. 1959).
4(9). AUTHORITY TO USE LOOSE-LEAF LEDGER: The authority granted to the main establishment to
use loose-leaf ledgers does not include the branch establishments. The latter cannot use loose-leaf
ledgers without specific authority therefor. (B.I.R. Ruling No. 607, Oct. 2, 1958)
4(10). USE OF JOURNAL AND LEDGER BY BRANCH STORES: Each branch office or store must keep a
journal and a ledger, or their equivalent, or a simplified set of bookkeeping records, depending upon
whether or not their respective gross sales exceed P5,000.00 a quarter. (B.I.R. File No. 105.02, Dec. 23,
1957).
4(11). CERTIFICATE AS TO THE USE OF LOOSE-LEAF BOOKS OF ACCOUNTS: The certificate of the
taxpayer as to the number of sheets of his loose-leaf books of accounts used by him for the previous
year must be under oath. (B.I.R. Ruling dated May, 1957).
SECTION 5. Persons Required to Keep Simplified Set of Bookkeeping Records: Persons required by
law to pay internal revenue taxes on business whose gross quarterly sales, earnings, receipts or output
do not exceed five thousand pesos (P5,000) shall keep and use the simplified set of bookkeeping records
recommended by the Commissioner of Internal Revenue and approved by the Secretary of Finance as
defined in section 1 of these regulations, unless they elect to keep the regular books of accounts. (As
amended by Sec. 3, Rev. Reg. No. V-13).
Simplified sets of bookkeeping records previously authorized under Revenue Regulations No. V-13 which
are not specifically assigned and designated for use of a definite class of trade or business and for which
specific sets of bookkeeping records have been prepared in accordance with and authorized under
Revenue Regulations No. V-43 shall no longer be used. All persons commencing business after the
publication of these regulations shall use the simplified sets provided for in these regulations (Revenue
Regulations No. V-43). However, persons already engaged in business at the time of the publication of
these regulations may continue using their simplified sets of bookkeeping records authorized under
Revenue Regulations No. V-13 until December 31, 1962. Thereafter, beginning January 1, 1963, only
such forms of simplified sets of bookkeeping records approved and authorized for use in particular line
of business or trade under Revenue Regulations No. V-43 are allowed to be used. (Added by Sec. 1, Rev.
Reg. No. 5-62.)
A trade or business for which no specific form has as yet been approved pursuant to Revenue
Regulations No. V-43 may use a simplified set of bookkeeping records approved under Revenue
Regulations No. V-13 until such time when a specific set therefor has been approved under the latter
regulations. (Added by Sec. 1, Rev. Reg. No. 5-62.)
The simplified sets of bookkeeping records enumerated in Annex "A" hereof are the only ones so far
approved by the Secretary of Finance in accordance with Revenue Regulations No. V-43. (Added by Sec.
1, Rev. Reg. No. 5-62.)
5(1). USE OF BOOKS OF ACCOUNTS ON A PARTICULAR KIND OF BUSINESS: Under Revenue Regulations
No. V-43, only simplified sets especially designed for a particular kind of business and approved by the
Secretary of Finance can be used. If no simplified sets has as yet been approved for a particular business,
that business may use simplified sets approved under the provisions of Revenue Regulations No. V-43. A
particular business cannot therefore, use a simplified set specifically designed for another business by
merely changing the title thereof to that corresponding to said business. (B.I.R. Ruling dated Feb. 12,
1964).
5(2). OPERATORS OF BOWLING ALLEYS TO KEEP BOOKS OF ACCOUNTS: Operators of bowling alleys
should keep a journal and a ledger, or their equivalents. However, if their gross quarterly receipts do not
exceed P5,000.00 they may use a simplified set of bookkeeping records only. (B.I.R. Ruling dated Dec.
13, 1961).
5(3). CRITERIA IN DETERMINING THE USE OF BOOKS OF ACCOUNTS. The criterion in determining what
books of accounts a taxpayer should keep is the amount of his gross quarterly sales, receipts, earnings,
or output, and not those derived during a given year. If his sales, receipts, earnings, or output do not
exceed P5,000 he may use only the simplified set of bookkeeping records but unless he chooses the use
of the latter books, he must keep a journal and a ledger, or their equivalents. If the taxpayer realizes
more than P5,000.00 during any quarter of year, he is duty bound to use the journal and ledger, or their
equivalents, even if his total sales for the year do not exceed P20,000.00. (B.I.R. Ruling No. V-20, s.
1960).
5(4). AMENDMENT OF REVENUE REGULATIONS; EFFECT OF: The Secretary of Finance may not, by
amending the regulations promulgated by him, immediately declare as unlawful and illegal simplified
sets of bookkeeping records previously approved by him under regulations also promulgated by him in
accordance with law but superseded later on. While he may always amend his revenue regulations
governing the preparations and submission of simplified sets of bookkeeping records with the end in
view of public good, he should also take into consideration the investments made by persons whose acts
have been approved by him under previous revenue regulations. It should be noted that the approval of
said sets does not contain any specific date of validity. While it may be contended that since they do not
have any specific date of validity they may be declared illegal at any time, such act would work an
injustice to those who invested their time and money, relying on the regulations duly promulgated and
on the subsequent approval of their sets made by the Secretary of Finance. And to follow the theory
advanced by the petitioner to the extreme, we may also say that even now the Secretary can issue
revenue regulations No. V-43 and requiring additional information not contained in the forms,
submitted by the petitioner or deleting others he deems unnecessary and thereby place the petitioner in
the same situation as those whose simplified sets have been approved under Revenue Regulations No.
V-13.
Moreover, it does not appear that the forms prepared by the petitioner and approved by the
respondent Secretary of Finance cover all kinds of conceivable business or trade. Neither was it shown
that there are at present simplified sets of bookkeeping records approved by the respondent Secretary
of Finance cover all kinds of conceivable business or trade. Neither was it shown that there are at
present simplified sets of bookkeeping records approved by the respondent Secretary pursuant to
Revenue Regulations No. V-43, applicable to all kinds of conceivable business or trade. That being the
case, to prohibit the use of simplified sets approved by the Secretary under Revenue Regulations No. V-
13 would create a situation where the merchants or traders whose business, trade or calling is not
covered by sets approved under Revenue Regulations No. V-43, would not have any form to use and
would not be able to comply with the requirements of section 334, as amended, of the Revenue Code.
There is no question that the sets submitted by the petitioner are superior to those approved under
Revenue Regulations No. V-13. However, those who have acquired a right under Revenue Regulations
No. V-13 by virtue of the approval of the sets submitted by them, which sets are now being used by
merchants engaged in different trades for which the petitioner prepared specific sets, should be given
sufficient time to recover their investments and to make a reasonable profit out of said investments.
This should be left to the sound discretion of the Secretary of Finance.
With respect to those sets approved under Revenue Regulations No. V-13 and for which no form has
been approved under Revenue Regulations No. V-43, the same may continue to be used indefinitely.
(Felipe B. Ollada vs. The Secretary of Finance, et al., Civil Case No. 3473 (CFI, Manila, Feb. 23, 1959; G.R.
No. L-15397, Oct. 31, 1960.)
5(5). INCOME RECEIVED BY PILOT ASSOCIATION, HOW RECORDED IN BOOKS: Where members or
pilots of a pilot association share equally in the net income of the latter derived from its business as
such, the respective income received by the former should be treated in their respective books of
accounts as "share or participation in the profits or income" of the pilot association and not as "salary."
(B.I.R. Ruling No. 366, s. 1960)
5(6). BOOKS OF ACCOUNTS TO BE KEPT BY MANUFACTURER OF GARMENTS: A manufacturer of
garments whose expected gross sales in a quarter will not exceed P5,000.00 may keep and use only a
simplified set of bookkeeping records.
As in the case of other books of accounts, said bookkeeping records must be presented for registration
and approval prior to their use. (B.I.R. Ruling No. 214, s. 1960).
5(7). PERSONS EXEMPT FROM THE PAYMENT OF FIXED AND PERCENTAGE TAXES, REQUIRED TO KEEP
BOOKS OF ACCOUNTS: As persons subject to internal revenue taxes are required to keep and use
books of accounts, one exempt from the fixed and percentage taxes is nevertheless, under obligation to
do so, because he remains subject to the income and additional residence taxes. (B.I.R. Ruling No. 427, s.
1960).
5(8). FISHPOND OWNERS OR OPERATORS MUST KEEP BOOKS OF ACCOUNTS: Fishpond owners or
operators must keep a journal and a ledger or their equivalents. However, should their gross quarterly
receipts do not exceed (P5,000.00, they may keep and use only a simplified set of bookkeeping records.
(B.I.R. Ruling No. 339, s. 1959).
5(9). BOOKS OF ACCOUNTS TO BE KEPT BY RETAIL MERCHANTS: The books of accounts which retail
merchants should keep and use are the journal and the ledger. However, if their gross quarterly sales,
receipts, or earnings do not exceed P5,000 they may keep and use the simplified set of bookkeeping
records duly authorized by the Secretary of Finance. (B.I.R. Ruling No. 87, s. 1959).
5(10). POULTRY RAISERS TO KEEP BOOKS OF ACCOUNTS: While a person engaged in the business of
poultry raising is exempt from business taxes, nevertheless, he is under obligation to keep and use books
of accounts, he being subject to the income and additional residence taxes. (B.I.R. Ruling No. 70, s.
1959).
5(11). BOOKS OF ACCOUNTS TO BE KEPT BY LANDOWNERS: Owners of agricultural lands, being
subject to the income and additional residence taxes, should keep and use a simplified set of
bookkeeping records, if their gross quarterly sales, earnings, or receipts do not exceed P5,000.00;
otherwise, they should keep and use a journal and a ledger, pursuant to section 334 of the Tax Code, as
amended. In accordance with section 337 of the same Code, said books of accounts should be preserved
for a period of at least five (5) years from the date of last entry in each book. Failure to keep said books
of accounts and to preserve the same within the prescribed period is punishable under section 352 of
the same Code, as implemented by General Circular No. V-237 dated March 2, 1957. (B.I.R. Ruling dated
May 22, 1957, File No. 106.02).
5(12). AGENTS AND SUB-AGENTS OF THE PHILIPPINE CHARITY SWEEPSTAKES OFFICE. Agents of the
Philippine Charity Sweepstakes Office, as well as their sub-agents, whose gross quarterly sales, earnings
or receipts do not exceed P5,000.00 shall keep and use a simplified set of bookkeeping records duly
approved by the Secretary of Finance wherein all transactions are shown and from which all taxes due
the Government may readily and accurately be ascertained and determined anytime of the year. Said
records must, before being used, first be presented to the deputy provincial treasurer (now Collection
Agent) of the locality where the agent resides or is doing business for registration and approved. (B.I.R.
Ruling dated March 5, 1957, File No. 105.02).
5(13). USE OF SIMPLIFIED SETS OF BOOKKEEPING RECORDS NOT MANDATORY: While Section 334 of
the Tax Code as implemented by Revenue Regulation No. V-1 (Bookkeeping Regulations), and its
amendatory regulations, requires a taxpayer whose gross quarterly sales receipts, earnings or output do
not exceed P5,000.00 to use a simplified set of bookkeeping records, nevertheless, such requirement is
not mandatory. The taxpayer may at his option, use instead of journal and a ledger, or their equivalents.
5(14). MEDICAL PRACTITIONERS AND INSURANCE AGENTS TO KEEP BOOKS OF ACCOUNTS: Medical
practitioners and insurance agents, being persons subject to internal revenue taxes, are required by
section 334 of the Tax Code to keep and use either a journal and a ledger, or their equivalents, or a
simplified set of bookkeeping records duly authorized by the Secretary of Finance, depending on
whether or not their gross quarterly earnings or receipts exceed P5,000.00 (B.I.R. Ruling dated Jan. 3,
1956).
5(15). VENDORS INSIDE PUBLIC MARKET: Market vendors should keep and use either the journal and
the ledger, or their equivalents, or the simplified set of bookkeeping records, depending upon whether
or not their gross quarterly receipts exceed P5,000.00 in accordance with section 334 of the Tax Code.
(B.I.R. Ruling dated Aug. 6, 1956, File No. 105.02).
5(16). VENDORS INSIDE PUBLIC MARKET SELLING EXCLUSIVELY DOMESTIC PRODUCTS: Public market
vendors engaged exclusively in the sale at retail of domestic meat should use and keep either the journal
and ledger or their equivalents, or the simplified bookkeeping records prescribed by section 334 of the
Tax Code, because, while they are exempt from the business tax they remain, nevertheless, subject to
the income and additional residence taxes. (B.I.R. Ruling dated July 10, 1956, File No. 106.02).
5(17). RECORDS TO BE KEPT BY RETAIL TOBACCO DEALERS: Retail leaf tobacco dealers may use in lieu
of purchase books, a simplified set of bookkeeping records provided the following are shown in every
purchase made by them:
1) The date of purchase;
2) The quarterly purchase;
3) The name of the wholesale leaf tobacco dealers from whom the purchase were made;
4) The schedule, paragraph and assessment number of the wholesale leaf tobacco dealers; and
5) The signature of the wholesale leaf tobacco dealer.
(B.I.R. Ruling dated Oct. 2, 1956).
5(18). BAKERY SHOP OWNERS OR PROPRIETORS REQUIRED TO KEEP BOOKS OF ACCOUNTS: An
operator or proprietor of a bakery shop is required to keep a journal and ledger or their equivalents as
required under section 334 of the Tax Code, except when the gross quarterly sales, earnings, receipts, or
output do not exceed P5,000.00, in which case the owner or operator may keep only the simplified
bookkeeping records. (B.I.R. Ruling dated Oct. 8, 1954, File No. 105.02).
5(19). AUTHORITY TO USE SIMPLIFIED SETS OF BOOKKEEPING RECORDS APPROVED UNDER SECTION 2
OF REVENUE REGULATIONS NO. V-1, as amended: In accordance with the introduced amendments,
beginning January 1, 1964, only Simplified Sets of Bookkeeping Records especially designed for each
class or kind of trade or business and prepared by a certified public accountant, are to be registered and
approved. All others not prepared in accordance with the above-mentioned amendments shall no longer
be used, approved or registered. (Revenue Memorandum Circular No. 1-64, dated January 7, 1964)
5(20). AUTHORITY OF THE SECRETARY OF FINANCE RE-USE OF SIMPLIFIED SETS OF BOOKKEEPING
RECORDS:
"While this Department takes cognizance of the difficulties confronting small business taxpayers as
herein pointed out, nevertheless it is not necessary to resort to the outright suspension of the effectivity
of the provisions of Revenue Regulations No. 5-62 to meet such contingency. It is believed that in places
where simplified sets of bookkeeping records specified in Annex "A" of Revenue Regulations No. 5-62
are available and at prices not exceeding P1.00 each, the provisions of the aforesaid Regulations No. 5-
62 could be enforced. However, in places where the simplified sets of bookkeeping records referred to
herein are not available, or available but the cost thereof exceeds P1.00 per copy, the problem could be
met by allowing small merchants to continue using simplified sets of bookkeeping records previously
authorized by this Department in accordance with Revenue Regulations No. V-13.
"In view of the foregoing, the request of that Bureau to have the effectivity of Revenue Regulations No.
5-62 suspended cannot be approved. However, authority is hereby given that Bureau to allow
businesses concerned to continue using simplified sets of bookkeeping records previously approved by
this Department under Revenue Regulations No. V-13, in places where simplified sets of bookkeeping
records mentioned in Annex "A" of said Regulations are not available or altho available the selling price
thereof exceeds P1.00 per copy, but such permit to continue using unspecified class of bookkeeping
records should not extend beyond December 31, 1963. In accordance with the aforequoted
authorization, taxpayers whose gross quarterly sales, earnings, receipts, or output do not exceed P5,000
and whose businesses are located in places where simplified sets of bookkeeping records mentioned in
Annex "A" of Revenue Regulations No. 5-62 are not available, or altho available the selling price thereof
exceeds P1.00 per copy, may be permitted to continue using simplified sets of bookkeeping records
previously approved in accordance with Section 2 of Revenue Regulations No. V-1 (as amended by Rev.
Regs. No. V-13), up to Dec. 31, 1963 only. (B.I.R. Revenue Memorandum Circular No. 5-63, dated Feb.
22, 1963)
SECTION 6. Transactions to be Recorded in the Simplified Set of Bookkeeping Records. The amount
of sales of goods, wares, or merchandise or the value of services rendered for the day, whether in cash
or on credit, shall be entered in the record of daily sales and cash receipts not later than five o'clock in
the afternoon of the day following the date of transaction. The manner of entering the transactions for
the day in the record of daily sales and cash receipts are explained in Appendix I (Form No. 1). If there is
no sale or receipt during the day, that fact shall be noted in the said record within the same period. (As
amended by Sec. 4, Rev. Reg. No. V-13).
All purchases and expenditures whether in cash or on credit and other sundry disbursements shall be
recorded likewise every day in the record of daily purchases, expenses and cash disbursements not later
than five o'clock in the afternoon of the day following the date the particular transaction was effected.
The manner of entering the transactions for the day in the said record of daily purchases, expenses and
cash disbursements are explained in Appendix II (Form No. 2). (As amended by Sec. 4, Rev. Reg. No. V-
13).
Within twenty-four hours after the close of each calendar month, the money columns of the record of
daily sales and cash receipts and record of purchases, expenses and cash disbursements shall be totaled
and posted or transferred to the corresponding columns in the record of the summary of transaction as
shown in Appendix III (Form No. 3). After the end of the accounting year, the money columns of the
summary of transactions shall be totaled and the computations indicated therein properly
accomplished. (As amended by Sec. 4, Rev. Reg. No. V-13.)
The yearly statements of net worth and operations shall be prepared within one hundred and five days
after the end of the accounting year by using the totals for the year in the summary of transactions and
the inventory sheet required by section 13 of Revenue Regulations No. V-1. The said yearly statements
shall be attached to the income tax return to be filed by the taxpayer. (As amended by Sec. 4, Rev. Reg.
No. V-13; See Republic Act No. 2343).
OTHER REQUIREMENTS FOR PERSONS REQUIRED TO KEEP AND USE THE SIMPLIFIED SET OF
BOOKKEEPING RECORDS: Persons required to keep and use the simplified set of bookkeeping records
shall comply with all the requirements regarding the preparation, issuance, use, keeping, the
presentation, and preservation of invoices, receipts, vouchers, as prescribed in Chapter IV and observe
the general administrative provisions provided for in Chapter V, of Revenue Regulations No. V-1. (Sec. 5,
Rev. Reg. V-13).
MEANING OF INTERNAL REVENUE PURCHASES AND SALES BOOKS: Whenever the words "internal
revenue purchases and sales books, appear in the other provisions of these regulations the same shall
read as "simplified set of bookkeeping records." (Sec. 6, Rev. Reg. No. V-13).
PRINTING OF SIMPLIFIED SET OF BOOKKEEPING RECORDS: The printing of any simplified set of
bookkeeping records by any private party for sale to the public may be recommended by the
Commissioner of Internal Revenue to the Secretary of Finance provided said records conform
substantially with the form prescribed herein as minimum requirements. (Sec. 7, Rev. Reg. No. V-13.)
6(1). PURCHASES BY MEANS OF "CHITS" ARE CONSIDERED SALES ON CREDIT: Purchases effected by
means of "chits" are considered sales on credit contemplated by Section 6 of Revenue Regulations No.
V-1, otherwise known as the Bookkeeping Regulations, as amended, implementing Section 334 of the
Tax Code. Since all these sales are properly invoiced and the use of "chits" in lieu of cash does not
constitute violation of any internal revenue law or regulations, the same need not be approved by this
Office. (B.I.R. Ruling No. 83, s. 1963).
6(2). FAILURE TO AFFIXED SIGNATURE IN THE STATEMENT OF NET WORTH AND OPERATIONS: Failure
of a taxpayer to affixed his signature in the Statement of Net Worth and Operations attached to his
income tax returns invalidates the same, pursuant to Revenue Memorandum Circular No. 1-63, dated
January 28, 1963. Such failure amounts to as if no statement of net worth and operations has been
attached to the income tax returns and, therefore, constitutes a violation of section 6 of Revenue
Regulations No. V-1 otherwise known as the Bookkeeping Regulations, as amended by Revenue
Regulations No. V-13, punishable under Section 352 of the National Internal Revenue Code. (B.I.R. Ruling
No. 102, s. 1963.)
6(3). DAILY SALES AND DISBURSEMENT RECORD: The record of daily sales and disbursement is part of
a simplified set or bookkeeping records. Accordingly, as in the case of the simplified sets, said record
should be approved and registered prior to its use. (B.I.R. Ruling No. 65, s. 1961).
6(4). TREATMENT OF COSTS OF RAW MATERIALS IN BOOKS OF ACCOUNTS. The cost of raw materials
incurred in the manufacture of ice such as salt, water, ammonia, fuel and lubricating oil although not
deductible from the gross selling price of such manufactured ice, must be entered in the manufacturer's
simplified accounts and tax records. (B.I.R. Ruling No. 132, s. 1960).
6(5). ONE SET OF BOOKS SUFFICIENT SEGREGATION OF TRANSACTION: A company engaged in the
production of coffee and chocolate need not keep and use more than one set of books of accounts. The
use of a set of books consisting of the journal and the general and subsidiary ledgers is a sufficient
compliance with the bookkeeping regulations.
As the production of coffee and chocolate constitutes a single business, the record of transactions in
each product need not be segregated. (B.I.R. Ruling No. 218, s. 1960).
6(6). SUBMISSION OF STATEMENT OF NET WORTH AND OPERATIONS: A taxpayer whose income does
not exceed P5,000.00 a quarter need not file with his income tax return a balance sheet and profit and
loss statement. However, he should file a statement of net worth and operations, pursuant to Section 6
of the Bookkeeping Regulations, as amended. (B.I.R. Ruling No. 449, s. 1960).
6(7). FAILURE TO SUBMIT STATEMENT OF NET WORTH AND OPERATIONS: A person under obligation
to file with his income tax returns the statement of networth and operations who fails to do so commits
as many violations as there are such failures on his part. (B.I.R. Ruling No. 179, s. 1959).
Professionals whose only source of income is their salary need not file the statement of networth and
operations, but those engaged in the active practice of their professions or in any taxable business
should file said statement. (Ibid.)
6(8). RECORDS TO BE KEPT BY SUB-LESSOR OF BUILDING: A sub-lessor of a building whose gross
quarterly receipts do not exceed P5,000.00 must keep a simplified set of bookkeeping records. He is also
under obligation to submit with his income tax return a statement of his networth and operations.
(B.I.R. Ruling No. 35, s. 1959).
6(9). INCOME RECEIVED CONSIST OF SALARY, DIVIDENDS AND INTEREST: A person whose income
during a given year consists exclusively of salaries, dividends, and capital gains need not accompany his
income tax return with the yearly statement of networth and operations required of those whose gross
quarterly sales, earnings, receipts, or output does not exceed P25,000 under section 6 of Revenue
Regulations No. V-1, as amended. Neither does such person need to attach to his income tax return the
certified balance sheets, profit and loss statements, schedules listing income-producing properties and
the corresponding incomes therefrom, and other relevant statements required of persons whose gross
quarterly sales, earnings, receipts, or output exceed P25,000.00 under Section 334 of the Tax Code.
(B.I.R. Ruling dated Feb. 19, 1958).
6(10). WHEN TO FILE STATEMENT OF NETWORTH AND OPERATIONS: Taxpayers whose gross quarterly
receipts exceeds P5,000.00 but do not exceed P25,000.00 are under obligation to submit with their
income tax return the yearly statement of networth and operations. (B.I.R. Ruling No. 650, s. 1958).
6(11). TREATMENT OF IMPORTED AND LOCALLY PURCHASED ARTICLES IN THE BOOKS OF ACCOUNTS:
Sales of imported and locally purchased articles can be combined in one entry in the books of accounts
of a taxpayer, provided the correct taxes are paid on time and that in case of investigation the taxpayer
can furnish the desired data concerning the business transaction for purposes of assessing the taxes due
and considering that the imported articles are duly tax-paid before release from customs custody. (B.I.R.
Ruling dated Jan. 15, 1953).
SECTION 7. Records of Receipts and Disbursement: All persons subject to any internal revenue tax
on their occupation, pursuit or calling of whatever nature, or on their income, such as professionals,
farmers, property owners, etc., shall, unless they provide themselves with the journal and the ledger or
their equivalents, keep a record of their receipts and disbursements. All entries therein shall be made
not later than five o'clock in the afternoon of the day following the date the transaction was effected.
However, a person whose only source of income is his salary shall be exempt from keeping the records
prescribed in these regulations.
7(1). FARMERS TO KEEP BOOKS OF ACCOUNTS: A Farmer comes within the purview of the term,
"persons required by law to pay internal revenue taxes," found in section 334 of the Tax Code, and
therefore, he is required to keep books of accounts and other accounting records in accordance with
said law, as implemented by Revenue Regulations No. V-1 otherwise known as the Bookkeeping
Regulations. (B.I.R. Ruling No. 141, s. 1962).
7(2). BARBERSHOP OPERATORS TO KEEP BOOKS OF ACCOUNTS: As persons subject to internal
revenue taxes are required to keep and use books of accounts, owners and operators of barbershops
should comply with the requirement notwithstanding the fact that they are not subject to any business
tax, because they are subject to the income and additional residence taxes. (B.I.R. Ruling No. 53, s.
1961).
7(3). SECTION 7 OF REVENUE REGULATIONS NO. V-1 REPEALED BY IMPLICATION: Section 7 of
Revenue Regulations had been impliedly repealed by section 334 of the Tax Code, as last amended by
Republic Act No. 658, because under the latter the only principal books of accounts that can now be
used by taxpayers are the journal and ledgers, or their equivalents, and the simplified set of
bookkeeping records. (B.I.R. Ruling Dated March 30, 1957, File No. 106.02).
7(4). SALARY RECEIVED AS THE ONLY SOURCE OF INCOME: A taxpayer whose only source of income is
his salary need not keep and use any book of accounts, it being material whether or not, for purposes of
the income tax, he has selected the standard optional deduction provided for in section 30(k) of the Tax
Code. (B.I.R. Ruling dated Dec. 2, 1957).
7(5). FARMERS REQUIRED TO KEEP BOOKS OF ACCOUNTS: Pursuant to Section 334 of the Tax Code,
farmers must keep a journal and a ledger or their equivalents. However, if their gross quarterly earnings
or receipts do not exceed P5,000, they may use only a simplified set of bookkeeping records duly
authorized by the Secretary of Finance. Before using said books or records, they must first be presented
for approval and registration with the Regional Director, or the Chief Revenue Officer, of Collection
Agent, as the case may be, in accordance with Sec. 19 of the Bookkeeping Regulations. (B.I.R. Ruling No.
50, s. 1965)
SECTION 8. Entries to be Kept up to Date in Ink or Indelible Pencil. All entries in the books of
accounts and other records must be kept up to date in ink or indelible pencil in a neat and legible
manner, and the figures entered in all columns shall be totalled within twenty-four hours from and after
the close of each calendar month and the totals posted at the foot of the respective columns. All
transactions, the time of posting or entry of which is not specifically provided for in these regulations,
shall be recorded within seven days from the date of transactions were effected.
SECTION 8-A. Audit to be Performed by Independent Certified Public Accountant: (1) Corporations,
companies, partnerships or persons whose gross quarterly sales, earnings, receipts or output exceed
twenty-five thousand pesos, shall have their books of accounts audited and examined yearly by
independent certified public accountants. The audit to be performed by an independent certified public
accountant shall embrace an examination of the accounting for assets, liabilities and capital together
with a review of the income and expense accounts of the taxpayers in accordance with generally
accepted auditing standards and procedures.
(2) ACCOUNTANT'S CERTIFICATE. The accountant's certificates shall be dated, signed and
manually, and shall identify without detailed enumeration the financial statements covered by the
certificate and shall be submitted and filed with the taxpayer's income tax return. However, if the audit
and examination has been performed by a firm of certified public accountants, the certificate shall
indicate the firm's name, signed either by the certified public accountant of the firm who actually
performed the audit and examination or by the responsible officer thereof. The certificate shall include
statements and or answers on the following:
(a) Kinds and amount of taxes payable by the taxpayer during the year.
(b) Degree of relationship by consanguinity or affinity of the accountant to the taxpayer, to its
President, Manager or principal stockholder.
(c) Have all such taxes due or assessed against the taxpayer been fully paid?
(d) How much of such taxes or assessments still remains unpaid?
(e) Has the audit been made in accordance with generally accepted auditing standards and
procedures? If not, in accordance with what accounting standards and procedures was the audit made?
What was the reason or reasons for the omission of any of the audit procedures or the non-compliance
with accepted auditing standards? (Added by Sec. 3, Rev. Reg. No. V-20; See Republic Act No. 658).
8-A(1). ACCOUNTANT'S CERTIFICATE: If the kinds and amounts of taxes payable and whether or not
they have been fully paid are stated in the accountant's certificate, the requirements of the regulations
have been complied with. A statement on the official receipt number and date of payment is not
necessary. (B.I.R. Ruling No. 44, s. 1963).
8-A(2). CERTIFIED BALANCE SHEETS, PROFIT AND LOSS STATEMENT: The moment one's gross sales,
earnings, receipts or output in any quarter of the years exceeds P25,000.00, his books of accounts
should be audited and examined by an independent certified public accountant and his income-tax
return accompanied with certified balance sheets, profit and loss statements, and the other statements
required by section 334 of the Tax Code. (B.I.R. Ruling No. 184, s. 1961).
8-A(3). MANNER OF SIGNING BOOKS AND RECORDS BY AN INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT: From the provisions of Section 8-A of Revenue Regulations No. V-1, as amended by
Revenue Regulations No. V-20, it is quite clear that the cases where the audit and examination have
been performed by a firm of certified public accountants, the certificate should be signed as follows
(taking for granted that the name of the firm is "Cruz, Santos & Co." and "Juan Antonio," is the certified
public accountant thereof who actually performed the audit and examine or a responsible officer of the
firm):
"Cruz, Santos & Co.
Certified Public Accountant
By:
Juan Antonio"
To sign the certificate merely with "Cruz, Santos & Co.", either alone or immediately above the
typewritten name of the firm, would not be a sufficient compliance with the regulations. (B.I.R. Ruling
No. 53, s. 1960).
8-A(4). REGISTER BOOK FOR WHOLESALE DEALERS OF ARTICLES SUBJECT TO SPECIFIC TAX: Under
Revenue Regulations No. V-66, which amended Revenue Regulations No. V-62 wholesale dealers of
liquors, fermented liquors, wines, and tobacco products are required to keep and use the official register
books (BIR Form No. 31.77) wherein only transactions in said article should be entered. However, where
the dealer at the same time deals in other articles, he may enter in the same ledger wherein
transactions in general merchandise are summarized the summary of the transactions recorded in said
official register book, provide that the latter summary is identified from the other entries. (B.I.R Ruling
No. 499, s. 1959).
8-A(5). BOOKS OF ACCOUNTS OF PAWNSHOPS, WHEN AUDITED: Loans given by pawnshops are not
embraced within the meaning of "sales, earnings, receipts, or output" and, therefore, pawnshop brokers
need not have their books of accounts audited and examined by an independent certified public
accountant even if the total amount of the loans given during any quarter exceeded P25,000.00.
However, should the amount of interest realized from the loans, plus the amount of the sales of
unredeemed jewelries minus the amount for which they were pawned, and all other income, earnings,
or receipts derived from the operation of the pawnshop exceed P25,000.00 during any given quarter,
said books must be audited and examined by an independent certified public accountant. (B.I.R. Ruling
No. 112, s. 1958).
SECTION 8-B. Schedule of Income-Producing Properties and the Corresponding Incomes Therefrom and
Other Relevant Statements to Accompany Income Tax Return: Corporations, companies, partnership
or persons whose gross quarterly sales, earnings, receipts or output exceed twenty-five thousand pesos
shall have their income tax returns accompanied with schedules listing income-producing properties and
the corresponding incomes therefrom and other relevant statements. Said schedules shall conform
substantially with the form prescribed in Annex "A" hereof. (Added by Sec. 1, Rev. Reg. No. V-58.)
PROFIT AND LOSS STATEMENT TO ACCOMPANY INCOME TAX RETURN FORM THEREOF: Corporations,
companies, partnership and persons whose gross quarterly sales, earnings, receipts or output exceed
twenty-five thousand pesos shall accompany their income tax returns with comparative profit and loss
statements. Said statement shall conform substantially with the form prescribed in Annex "B" hereof.
(Added by Sec. 2, Rev. Reg. V-58.)

CHAPTER III
Other Books and Records

"All corporations, companies, partnerships, or persons keeping the books of accounts mentioned in the
preceding section may at their option keep such subsidiary books as the needs of their business may
require: Provided, That where such subsidiaries are kept, they shall form part of the accounting system
of the taxpayer and shall be subject to the same rules and regulations as to their keeping, translation,
production, and inspection as are applicable to the journal and the ledger." (Sec. 335, Commonwealth
Act No. 466.)
8-B(1). USE OF DOUBLE ENTRY BOOKKEEPING SYSTEM: The use of the double entry bookkeeping
system is permissible in any business transaction and, therefore, said system may be used by retailers
and wholesalers. (B.I.R. Ruling No. 215, s. 1958).
The use of books of accounts other than those mentioned in Section 334 of the Tax Code cannot be
allowed. (Ibid.)
8-B(2). CERTIFIED PUBLIC ACCOUNTANT EMPLOYED IN A BANK ADMINISTERING PROPERTIES OF A
DECEASED: A certified public accountant employed in a bank which, among others, handles the
administration of estate of deceased persons, cannot duly certify to the statement of estate of deceased
persons, cannot duly certify to the statement of itemized assets, itemized deductions and amount of
taxes due which should accompany the estate returns showing a gross value of P50,000.00 or more, or
to be filed by the bank in behalf of the decendant's estate in its capacity as administrator or executor,
because his employment in the bank might affect his professional actuations as a certified public
accountant. (B.I.R. Ruling, dated July 3, 1957.)
8-B(3). TOTAL SALES SUBJECT TO YEARLY AUDIT: Where the sales, earnings, receipts or output of a
corporation, company, partnership, or person exceed P25,000.00 in any one quarter, the books of
accounts of such corporation, company, partnership or person shall be subject to the yearly audit to be
performed by an independent certified public accountant, even if the total sales, earnings, receipts or
output during the entire year do not reach P100,000.00 (B.I.R. Ruling dated April 10, 1950, File No.
106.02).
8-B(4). BOOKS OF ACCOUNTS OF RELIGIOUS CORPORATIONS TO BE AUDITED BY AN INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANT: A religious corporation whose gross income from another religious
and educational corporation exceeds P100,000 a year, shall have its books of accounts audited and
certified by an independent certified public accountant, pursuant to Section 334 of the Tax Code. (B.I.R.
Ruling dated Feb. 12, 1953).
SECTION 9. Subsidiary Books. Persons required to keep the books and records mentioned in
section 334 of the National Internal Revenue Code may, at their option, keep such subsidiary books as
the needs of their business may require and such other books as may be required by these regulations.
Such books shall be subject to the same rules and regulations as are applicable to the journal and ledger
prescribed in Chapter II hereof.
9(1). USE OF SUBSIDIARY BOOKS: Pursuant to section 335 of the Tax Code, where subsidiary books
are kept, they shall form part of the accounting system of the taxpayer and be subject to the same rules
and regulations as to their keeping, translation, production and inspection as are applicable to the
journal and ledger. Accordingly, the requirement of registration and approval prior to the use of the
journal and ledger is applicable to the subsidiary books. (B.I.R. Ruling dated Sept. 17, 1956, File No.
106.02).
9(3). CHARGE SALES BOOK AND CHARGE PURCHASE BOOK: As charge sales book and charge purchase
book correspond to customers ledger and creditors ledger respectively, the entries in which are
controlled by the general ledger in the corresponding controlling accounts, they are subsidiary books of
accounts, and their use is optional only. Consequently, they may be used without the necessity of prior
approval by and registration in the Bureau of Internal Revenue. (B.I.R. Ruling dated Feb. 23, 1953, File
No. 106.02).
9(4). "POISON" BOOK, "ABORTIVE" BOOK AND "PRESCRIPTION" BOOK, CONSIDERED SUBSIDIARY BOOKS:
The so-called "poison book," "abortive book," and "prescription book" are considered subsidiary
books within the purview of section 335 of the Tax Code and should, therefore, be presented for
approval and registration prior to their use. (B.I.R. Ruling dated Sept. 22, 1953, File No. 106.02).
9(5). DELIVERY RECEIPTS PART OF ACCOUNTING RECORDS:
The so-called delivery order receipts used by a firm in accompanying the delivery of manufactured lead
on sales made by it in its Manila office are, like the regular invoice and receipts, a part of the accounting
records and, therefore, subject to registration and approval by this office before the actual use of the
same, pursuant to Section 14 of the Revenue Regulations No. V-1, (B.I.R. Ruling No. 45, s. 1965).
SECTION 10. Records to be Kept by Proprietors or Operators of Rope Factories, Sugar Centrals, and
Disiccated Coconut Factories: Aside from the books and other records required in Chapter II of these
regulations, proprietors or operators of rope factories, sugar centrals, desiccated coconut factories and
other factories subject to the percentage tax on the gross value of their output or gross sales of their
products shall keep true and correct records of their purchases of raw materials, the finished products
and by products. The records of purchases of raw materials shall indicate the kind and quantity of raw
materials received, the unit price, and the total value of the said raw materials, the date of receipt, the
number of receipt issued therefor, and the name, address and residence certificate of the persons from
whom the raw materials were purchased. The record of finished products and by-products shall state
the date of production, and the kind and quantity of the finished products and by-products, and the
record of removals shall show the date of removal, the number of the invoice issued therefor, the kind
and quantity of the finished products or by-products, the unit price and the total selling price or market
value thereof, and the name, address and residence certificate of the purchaser or the person to whom
delivery is made.
The proprietor or operator of a factory or mill may adopt such system of keeping his records as may be
convenient for his business, provided that the system adopted truly reflects all his transactions and his
books contain all the desired information. All his purchases shall be covered by the corresponding
receipts, except when the person from whom the same are made has issued invoices therefor in which
case, the proprietor or operator may keep the said invoices in lieu of issuing receipts therefor, provided,
that said invoices show the information herein required. Every removal of the finished products or by-
products shall be covered by an invoice showing the date of removal, the kind and quantity of the
finished product or by-product removed, the unit price and the total selling price or market value
thereof, and the name, address and residence certificate of the purchaser or the person to whom
delivery is made.
Proprietors or owners of rice mills and corn mills shall keep the records and issue the receipts and
invoices prescribed in Revenue Regulations No. 1 (Rice and Corn Mills Regulations. 1 ).
10(1). REPUBLIC ACT NO. 3704: Under Section 1 of Republic Act No. 3704 which amends section 182
of the Tax Code, operators or owners of rice or corn mills are now subject to an annual graduated fixed
tax based on the rates provided therein beginning July 1, 1963. However, inasmuch as this is an annual
tax, they may pay only one half (1/2) of the prescribed rates corresponding to the second semester of
1963, payment of which should be made on or before July 22, of this year (1963).
Under Section 2 of the aforesaid law which amends Section 189 of the Tax Code, operators or owners of
rice or corn mills are no longer liable to the 2% miller's tax starting June 22, 1963. However, they are
subject to the payment of said tax on transactions covering the period from June 1 to June 21, 1963,
payment of which should be made not later than July 22, 1963. (B.I.R. Gen. Circular No. 17-63, dated July
9, 1963).
10(2). RICE AND CORN MILLS REQUIRED TO KEEP BOOKS OF ACCOUNTS PRESCRIBED BY REV. REGS. NO.
V-1: Operators or owners of rice and/or corn mills are no longer required to keep and use the books
and records prescribed by Regulations No. 7, the Rice and Corn Mills Regulations, because under the
amendment effected by Republic Act No. 3704, rice and/or corn mills are no longer subject to the 2% tax
prescribed by Section 189 of the Tax Code. In lieu of the books and records prescribed by Regulations
No. 7, they are now required to keep and use the books and records prescribed by Regulations No. V-1,
otherwise known as the Bookkeeping Regulations, as amended. (B.I.R. Ruling No. 84, s. 1964).
Under the provisions of Section 1 of Republic Act No. 3704, which took effect on June 22, 1963,
amending Sections 182 and 189 of the Tax Code, the basis of the graduated fixed annual tax payable by
operators, proprietors or owners of rice and/or corn mills is the milling capacity per machine operated
by the proprietor. (B.I.R. Ruling No. 1, s. 1964).
SECTION 11. Record of Jobs Received by Contractors. Road, building, waterworks, and other
construction work contractors, and other persons subject to tax under section 191 of the National
Internal Revenue Code shall, in addition to the books and other records required in Chapter II of these
regulations, keep a register book for job orders received in which they shall enter immediately upon
making a contract the date, name and address of the customer, a description of the articles to be
constructed or the services desired, the consideration therefor, and the amount of deposit or partial
payment, if any; and upon completion and delivery of the subject matter of the contract, the date of
completion or delivery and the amount paid therefor.
Keepers of hotels and lodging houses may, in lieu of the records of jobs received, keep a guest register
book in which shall be entered immediately upon accepting a guest the date and time of his arrival, the
name and address of the guest, and the number of the room to be occupied; and, upon checking out,
the date and time of his departure; and the amount paid by him. The entries shall be numbered
consecutively for purposes of reference. The books prescribed herein shall conform substantially with
Form "C" of the Appendix.
In case any of the taxpayer enumerated in section 191 of the National Internal Revenue Code finds the
use of the register book for jobs received impracticable for his business he may devise such system of
keeping his books and other records as may be appropriate for his particular business and submit said
books and records for approval to the Commissioner of Internal Revenue, if his place of business is in
Manila, or to the provincial revenue agent, if in the province. No such books and records may be used
until they are duly approved in accordance with section 19 of these regulations.
11(1). REGISTER BOOK FOR JOB ORDERS: One engaged in a machine shop business should, in addition
to the regular books of accounts and other accounting records, keep a register book for job orders
received in which he shall enter immediately upon making a contract the date, name and address of the
customer, a description of the articles to be constructed or the services desired, the consideration
therefor, and the amount of deposit or partial payment, if any; and upon completion and delivery of the
subject matter of the contract, the date of completion or delivery and the amount paid herefor.
However, should he find the use of said register book impracticable for his business, he may devise such
system of keeping his books and other records as may be appropriate for his business and present them
for approval in accordance with section 19 of the Bookkeeping Regulations. (B.I.R. Ruling No. 620, s.
1959).
SECTION 12. Records to be Kept by Brokers. Aside from the books and other records required in
Chapter II of these regulations, stockbrokers, dealers in securities, real estate brokers, real estate
dealers, commercial, customs and immigration brokers shall use serially numbered contract forms,
which shall be issued in chronological order, for each agreement had with their customers, showing the
date and other facts concerning the services rendered or to be rendered and the signature of the parties
thereto. The contracts shall be recorded everyday in a register book showing the date and number of
the contract, the name of the customer, the services desired, the subject matter and the value thereof
(in case of properties), the compensation agreed upon and the duration of the contract; and upon
termination of the contract, a remark as to the date and number of the receipt issued for the
compensation received. The contracts shall be filed in the office of the broker in numerical order
together with copies of all papers concerning the transactions.
In case of commercial brokers representing foreign companies, copies of the orders such as cablegrams,
telegrams, radiograms, etc. shall be filed with the corresponding file copies of the contracts. These
pertinent papers need not be filed with the file copies of the contracts where a filing system is employed
such that said papers are readily available by reference appearing on the file copies of the contracts.
12(1). COMMERCIAL BROKERS REQUIRED TO KEEP BOOKS OF ACCOUNTS: A commercial broker is
subject to 6% tax on the gross compensation received by him as such, pursuant to Section 195 of the Tax
Code. Being subject to the internal revenue tax he is required to keep books of accounts in accordance
with Section 334 of the Tax Code, as implemented by Revenue Regulations No. V-1. (B.I.R. Ruling dated
Nov. 2, 1962).
SECTION 13. Records of Inventories: Persons required by law to pay internal revenue taxes on
business on business shall keep, in addition to the other books and records prescribed in these
regulations, a book of inventories, in which they shall record in detail the quantity, description, unit and
total cost of every item of their stocks-in-trade, materials, supplies and other goods found in the
premises of their establishments at the time they start business and at the close of the calendar year or
accounting period. The inventory at the beginning shall be made and submitted to the Commissioner of
Internal Revenue, if the place of business is in Manila, or to the deputy provincial or city treasurer, if in a
municipality or city, within ten days after securing the privilege tax-receipts or starting the business, and
the subsequent inventories not later than thirty days after the close of the calendar year or accounting
period. This period may, in meritorious cases, be extended by the Commissioner of Internal Revenue.
Deputy provincial and city treasurers shall, upon receipt of such inventories, immediately send the same
to the corresponding provincial revenue agent who shall keep and preserve them for purposes of
reference.

CHAPTER IV
Invoices or Receipts

"All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for
services rendered valued at two pesos or more, prepare and issue sales or commercial invoices or
receipts serially numbered in duplicate, showing among other things, their names, or styles, if any, and
business addresses; PROVIDED, That in case of sales, receipts or transfers in the amount of fifty pesos or
more, the invoices or receipts shall further show the name, or style, if any, and business address of the
purchaser, customer or client. The original of each sales invoice or receipts shall be issued to the
purchaser, customer, or client who, if engaged in any taxable business, shall be kept and preserve the
same in his place of business for a period of five years from the date of the invoice or receipt, the
duplicate to be kept and preserved by the persons subject to tax, also in his place of business for a like
period: PROVIDED, That persons subject to tax, whose gross sales, earnings, or receipts during the last
preceding year exceed twenty thousand pesos shall, for each sale or transaction, issue an invoice or
receipt irrespective of the value of the articles sold or service rendered.
"The Commissioner of Internal Revenue may, in meritorious cases, exempt any person subject to an
internal revenue tax, from compliance with the provisions of this section. In any event, public market
vendors selling exclusively domestic meat, fruits, vegetables, game, poultry, fish and other domestic
food products are hereby exempted from the provisions of this section." (Sec. 204 of Commonwealth
Act No. 466, as amended by Com. Act No. 526; sec. 9, Republic Act No. 48; sec. 18 of Republic Act No.
1612; and by Republic Act No. 1856.)
13(1). SARI-SARI STORE OWNERS TO SUBMIT INVENTORY OF THEIR STOCKS IN TRADE: Sari-sari store
owners being subject to internal revenue tax on business are required to submit an inventory of their
stocks in trades pursuant to Section 13 of the Bookkeeping Regulations. (B.I.R. Ruling No. 407, s. 1961).
13(2). INVENTORIES NEED NOT BE NOTARIZED: There is no requirement in the Bookkeeping
Regulations that the record of inventories be notarized before the submission thereof at the start of
business operations or within thirty (30) days after the close of the calendar year or accounting period. It
is enough that said records be signed by the owner or manager of the business. (B.I.R. Ruling No. 271, s.
1959).
13(3). PAWNSHOP OPERATORS NEED NOT SUBMIT INVENTORY OF JEWELRIES: The requirement
under Section 13 of Revenue Regulations No. V-1, does not apply to pawnshop in so far as the
submission of an inventory of the jewelries pawned to them at the end of the taxable year is concerned.
Therefore, they need not submit any annual inventory of the jewelry and other articles pledged to them
as security for loans. (B.I.R. Ruling dated Oct. 9, 1957, File No. 105.02).
13(4). INVENTORY OF A BRANCH AND MAIN STORE: Purchases of the branch store made in the name
of the principal store should be treated by keeping a memorandum thereof and taken up in the books of
accounts of the principal store. On the assumption that the function of branch store is limited to the
making of purchases for the principal store, a single inventory for them would be sufficient. (B.I.R. Ruling
dated Sept. 12, 1955).
IV(1). USE OF ONE SET OF SALES INVOICES BY ESTABLISHMENTS LOCATED IN DIFFERENT PLACES: A
factory located in the suburbs with an office in Manila for display and sales of its products can use one
set of sales invoices both for sales made at the factory and those made at the Manila office, provided
that the respective addresses of the factory and Manila office appear in said invoices. (B.I.R. Ruling No.
49, s. 1963).
IV(2). PUBLIC MARKET VENDORS, WHEN REQUIRED TO ISSUE SALES OR COMMERCIAL INVOICES: In
order to enjoy the privilege under Section 204 of the Tax Code, as amended by Republic Act No. 1856, a
public market vendor must sell exclusively domestic meat, fruits, vegetables, game, poultry, fish and
other domestic food products. The moment he sells product or articles in addition to those mentioned,
he loses the benefit of the exemption and, therefore, should issue sales or commercial invoices or
receipts. (B.I.R. Ruling No. 7, s. 1961).
IV(3). SALES ON CREDIT: Under Section 204 of the Tax Code, a sales invoice should be issued for every
sale or transfer of merchandise, even for a sale on credit. (B.I.R. Ruling No. 244, s. 1961).
IV(4). REQUIREMENTS IN THE EXEMPTION FROM ISSUING INVOICES OR RECEIPTS: In meritorious
cases, the Commissioner of Internal Revenue may exempt a taxpayer from the issuance of sales invoices
or receipts, provided that every sales made by him is covered by purchase vouchers issued and signed by
the buyers, showing the date, the quantity and description of the articles purchased, the consideration
paid therefor and his name and address together with the number, date and place of issue of his
residence tax certificates. (B.I.R. Ruling No. 304, s. 1959).
IV(5). RECEIPTS ISSUED IN PAYMENT OF AN OBLIGATION: Receipts issued for payments made by
customers of their outstanding obligations need not show the customer's addresses, provided that the
same had already been indicated in the sales invoices and or delivery receipts previously issued which
accompanied the delivery of the articles for which said payments are being made. (B.I.R. Ruling dated
Aug. 23, 1956, File No. 106.02).
SECTION 14. Vouchers for Transaction: Persons paying internal revenue taxes who are required to
keep the books of accounts mentioned in section 334 of the National Internal Revenue Code shall have a
voucher for each entry in their books. The voucher may be an invoice, receipt, check or other document,
which shall show the details of each transaction.
"Persons subject to tax shall issue a sales or commercial invoice for each sale or transfer of merchandise
or for services rendered valued at P2 or more. In case the transaction is valued at less than P2, the
taxpayer need not issue any invoice, but unless it is issued, the transaction must be recorded
immediately after it is effected in a record of petty sales or transactions the entries in which shall be
summarized at the end of the day and the total transferred to the journal or internal revenue sales book
or book of receipts. If the gross sales or receipts of a person during the preceding year exceed P20,000,
every sale or transaction effected by him shall be covered by an invoice, irrespective of the amount of
the sale or transaction.
"The record of petty sales or receipts may be dispensed with if a cash register machine with roll sheets is
used to record all petty transactions. The entries in the roll sheets shall be summarized at the end of the
day and the total transferred to the journal or to the internal revenue sales or receipts book. The said
roll sheets shall be identified by the signature or initials of the taxpayer or his bookkeeper or manager
and shall show the dates of the transaction therein recorded.
"Every purchase or expenditure by a taxpayer subject to these regulations shall also be supported by an
invoice or a receipt issued by the vendor or the person rendering the service. In case an invoice or a
receipt is not issued, the taxpayer concerned shall require the vendor to sign a purchase or expense
voucher showing the date, the quantity and description of the articles purchased or the services
rendered, THE RATE OF TAX TO WHICH THE ARTICLES WERE SUBJECTED, IF SUBJECTED TO THE ADVANCE
SALES TAX IN THE CASE OF IMPORTATION OR TO THE SALES TAX IN THE CASE OF LOCALLY
MANUFACTURED OR PRODUCED ARTICLES, the consideration paid therefor, and the name and address
of the vendor or PERSON RENDERING THE SERVICE together with the number, date and place of issue of
his residence certificate.
"The COMMISSIONER of Internal Revenue may, in meritorious cases, exempt a person from compliance
with these regulations. (Amended by Rev. Reg. No. 4-65, dated Jan. 22, 1965)
14(1). RECEIPTS ISSUED BY PAWNSHOPS ON FEES RECEIVED: Pawnshops should issue receipts for
amounts received by them as interests and service fees, pursuant to the 3rd paragraph of Section 14 of
Revenue Regulations No. V-1. (B.I.R. Ruling dated Aug. 16, 1962).
14(2). MEAT VENDORS INSIDE PUBLIC MARKETS: Persons selling domestic meat exclusively in public
markets are exempt from the requirement of issuing sales or commercial invoices or receipts. (B.I.R.
Ruling No. 87, s. 1961).
14(3). SALES ON CREDIT: Under section 204 of the Tax Code, a sales invoice should be used for every
sale or transfer of merchandise, including sales on credit. (B.I.R. Ruling No. 244, s. 1960).
14(4). PUBLIC MARKET VENDORS: Public market vendors selling shoes, ready-made clothes, china
wares and others, but not raw or cooked food, should issue sales invoices or receipts notwithstanding
the fact that they are not subject to any percentage tax, pursuant to section 204 of the Tax Code, in
relation to section 14 of Revenue Regulations No. V-1, otherwise known as the Bookkeeping
Regulations. (B.I.R. Ruling No. 120, s. 1960).
14(5). CONFIRMATION RECEIPT: Where an insurance company still in the process of incorporation
entered into an agreement with another corporation whereby the latter, as its underwriter, shall collect
subscription to the shares of stock of the former, and in order to protect the interest of the paying
investors, the underwriter issues confirmation receipts advising the investors that their respective
money were used in payment of their subscriptions of the shares, said receipts should first be presented
for approval and registration prior to their use thereof, pursuant to section 19 of the Bookkeeping
Regulations, as amended. (B.I.R. Ruling No. 94, s. 1960).
14(6). ISSUANCE OF SALES INVOICES OR RECEIPTS: All persons subject to internal revenue tax are
required to issue sales invoices or receipts where the merchandise sold or services rendered is valued at
P2.00 or more. Where the value of the goods sold or services rendered is less than P2.00, a receipt or
invoice need not be issued but unless a receipt is issued the sale must be entered in a record of petty
sales which shall be summarized at the end of the day and the total transferred to the journal or internal
revenue sales book or book of receipts. The record of petty sales or receipts may be dispensed with if a
cash register machine with roll sheets is used to record all petty transactions. The entries in the roll shall
be summarized at the end of the day and the total transferred to the journal or to the internal revenue
sales or receipt book. The said roll sheets shall be identified by the signature or initials of the taxpayer or
his bookkeeper or manager and shall show the dates of the transactions recorded therein. (B.I.R. Ruling
No. 272, s. 1960).
14(7). "GIFT CERTIFICATE" OR GIFT COUPON": "Gift certificate" or "gift coupon" need not be
registered and approved by this Office provided that sales invoices or receipts properly registered and
approved are issued for the articles delivered to the person and who presents the certificate or coupon.
(B.I.R. Ruling No. 52, s. 1960).
14(8). VOUCHERS CANNOT TAKE THE PLACE OF JOURNAL: A business firm cannot do away with the
journal and use instead vouchers as the basis for posting the entries to the general ledger, a voucher not
being a book of original entry. (B.I.R. Ruling No. 576, s. 1959).
14(9). EXTENSION OF PERIOD TO MAKE ENTRIES IN BOOKS OF ACCOUNTS: The Commissioner of
Internal Revenue cannot extend the period within which transactions should be entered in the
corresponding books of accounts. (B.I.R. Ruling No. 241, s. 1959).
14(10). SALES NOT EXCEEDING P2.00: It appearing that most of the sales of the candy stand ranges
from P0.10 to P0.20 and that the bulk of the sales of confectioneries, taken singly, do not exceed P2.00,
an invoice or receipt need not be issued for each sale not exceeding P2.00. However, unless an invoice
or receipt is issued, the sales must be immediately recorded in a petty sales book the entries in which
shall be summarized at the end of each day and the total thereof stated in the journal or simplified set
of bookkeeping records, as the case may be, not later than 5:00 o'clock in the afternoon of the day
following the date of the sale. (B.I.R. Ruling No. 220, s. 1959).
14(11). PROCEDURE IN CASE OF LOSS: In case of loss of a taxpayer's sales invoices, or some of them,
he should report the matter to the Bureau of Internal Revenue. For that purpose, he need not execute
an affidavit attesting to such loss. (B.I.R. Ruling No. 567, s. 1959).
14(12). TICKETS USE AS A MEDIUM OF EXCHANGE: The fact that in a canteen (located inside a
company compound) tickets, instead of cash, are used as the medium of exchange does not exempt the
owner or operator thereof from issuing invoice, or receipts for sale made by him in excess of P2.00.
However, while said invoice or receipts should be registered prior to their use, the tickets need not be
registered. (B.I.R. Ruling No. 618, s. 1958).
14(13). WHERE ARTICLE SOLD IS VALUED AT P2.00 OR MORE: As sales or commercial invoice should
be issued for every service rendered by a dressmake valued at P2.00 or more, no receipts need be issued
if it less than P2.00. But unless it is issued, the transaction must be recorded in a record of petty sales or
transactions, the entries in which shall be summarized at the end of the day and the total transferred to
the journal or record of daily sales and cash receipts, as the case may be. (B.I.R. Ruling dated March 13,
1957, File No. 105.02)
14(14). COLLECTOR'S PROVISIONAL RECEIPT. The so-called collector's provisional receipt and
salesman provisional delivery receipt used by a corporation in connection with the sale of its products
are, like the regular invoice and receipt, a part of its accounting system and, therefore, subject to the
requirements of Revenue Regulation No. V-1, as amended. Accordingly, said receipts should, prior to
their case, be presented for approval and registration. (B.I.R. Ruling dated Sept. 27, 1957).
14(15). SALE OF ARTICLES MORE THAN P2.00. Pursuant to section 204 of the Tax Code, as amended,
all persons subject to internal revenue tax shall, for each sale or transfer of merchandise or for services
rendered valued at P2.00 or more, prepare and issue sales or commercial invoices or receipts serially
numbered in duplicate showing, among other things, their names or styles, if any, and business
addresses. However, in case of sales, receipts, or transfers in an amount of P50.00 or more, the invoices
or receipts shall further show the name or style, if any, and business address of the purchaser, customer
or client. Persons subject to tax whose gross sales, earning or receipts during the last preceding year
exceed P20,000.00 shall for each sale or transaction, issue an invoice or receipt, irrespective of the value
of the article sold or service rendered. (B.I.R. Ruling dated Oct. 28, 1957, File No. 106.02).
14(16). REQUIREMENTS IN THE ISSUANCE OF SALES INVOICES AND RECEIPTS: The requirement of the
Bookkeeping Regulations anent the issuance of sales invoices and receipts is not dependent on the
amount of gross sales of a taxpayer. Such requirement covers all persons subject to an internal revenue
tax. However, merchants whose gross annual sales do not exceed P20,000 during the preceding year
need not issue sales invoices or receipts when the amount thereof is less than P2.00, but the same
should be entered in a record of petty sales and transactions. Those whose gross sales during the
preceding year exceed P20,000.00 shall issue an invoice or receipt covering any sales made by them,
regardless of the amount thereof. (B.I.R. Ruling dated Nov. 25, 1957, File No. 105.02).
14(17). HOTEL RECEIPTS: A hotel receipt shall be issued to each individual guest lodging in a hotel,
notwithstanding the fact that charges corresponding to a group or company of lodgers are shouldered
by only one of them, pursuant to Section 14 of Revenue Regulations No. V-7, in relation to section
226(b) of the Tax Code, as amended. (B.I.R. Ruling dated Aug. 17, 1956, File No. 105.02).
14(18). ROLL SHEETS FOR CASH REGISTER MACHINE: Roll sheets for a cash register machine need not
be registered. It is sufficient that the roll sheets are signed or initialed by the taxpayer or his bookkeeper
or manager and show the dates of the transactions therein recorded and should be summarized at the
end of the day and the total transferred to the journal or to the simplified bookkeeping records. (B.I.R.
Ruling dated Sept. 16, 1955).
The use of the double entry bookkeeping system is sanctioned by the standard accounting system. The
choice of the use of such bookkeeping system is left entirely to the discretion of the taxpayer (Ibid.)
14(19). VALUE OF ARTICLE SOLD IS P0.50 ONLY. Where the value of the article purchased from a
dealer is only P0.50, the said dealer cannot be required to issue a receipt therefor, the same being
required only in case the value of the merchandise sold is P2.00 or more, pursuant to Section 14 of the
Bookkeeping Regulations. However, if the said dealer is subject to percentage tax and his gross sales or
receipts during the preceding year exceed P20,000.00, the said article valued at P0.50 should be covered
by an invoice, in accordance with section 204 of the Tax Code. (B.I.R. Ruling dated July 1, 1954, File No.
106.02).
14(20). USE OF CASH REGISTER MACHINES. Cash register machines are not required to be used by all
business establishments. Under Section 14 of Revenue Regulations No. V-1, a cash register machine may
be used only in lieu of record of petty sales or receipts wherein the amount received by a person which
is less than P2.00 is recorded, in case no invoice or receipt is issued.
Agents or Examiners has the right to inspect the cord roll of the cash register machine even without first
obtaining permission from this Office, such right being derived from his authority to inspect books of
accounts and records of taxpayer. (B.I.R. Ruling dated July 6, 1954).
14(21). ISSUANCE OF AN INVOICE IS REQUIRED EVEN PURCHASE PRICE IS NOT PAID WHEN GOODS ARE
DELIVERED. The issuance of an invoice is nevertheless required even if, at the time the good are
delivered to the purchaser, the value thereof is not paid. In the instant case, there is already a transfer
of merchandise even if the value thereof is not paid. Where "consignment invoice" is used in the
delivery of such goods, registration of the same with the proper authorities is required before using the.
(B.I.R. Ruling dated May 4, 1954).
SECTION 15. Form and Manner of Issuance of Invoices and Receipts. An invoice or a receipt, in order
to comply with the requirement of these regulations, must be serially numbered and made at least in
duplicate. They shall be bound in the form of booklets or pads of 50 or 100 each, and shall show, among
other things, the name and address and the business style, if any, of the person issuing the same, and
shall contain such columns as may be necessary and appropriate for the business of the taxpayer
concerned. The invoices or receipts may have as many duplicate copies as may be necessary for the
purposes of the taxpayer, but the duplicate copies shall bear the same serial number as the original.
"Where the transaction is required to be covered by an invoice or receipt, the same shall be issued at
the time the transaction is effected and the original thereof delivered to the purchaser or to the person
from whom payment is received. In the case of sales invoices, THE INVOICE MUST show the date of the
transaction, the quantity and description of the merchandise, the unit cost, THE RATE OF SALES TAX TO
WHICH THE PRODUCTS OR ARTICLES ARE SUBJECT OR WERE SUBJECTED IF ISSUED BY PRODUCERS,
MANUFACTURERS, IMPORTERS, OR WHOLESALERS, and the total price. IN CASE OF SALES, REGARDLESS
OF AMOUNT, BY PRODUCERS, MANUFACTURERS, IMPORTERS, OR WHOLESALERS TO RETAILERS OR ANY
BUSINESS ESTABLISHMENT, THE INVOICE MUST FURTHER SHOW THE NAME, OR STYLE, IF ANY, THE
BUSINESS ADDRESS AND THE NUMBER, DATE, AND KIND OF PRIVILEGE TAX OF THE PURCHASER. RETAIL
DEALERS IN LOCALLY PURCHASED ARTICLES, UNLESS REQUESTED BY THE PURCHASERS, NEED NOT
INDICATE IN THE SALES INVOICES THE RATE OF TAX TO WHICH THE ARTICLES SOLD HAD BEEN
SUBJECTED. In case of a sale or transfer in the amount of P50 or more, the invoice shall also show the
name, or style, if any, the business address of the purchaser, and the number, date, and place of issue of
his residence certificate. In the case of other invoices, THE INVOICE MUST show the date, the description
of the articles or the nature of the service, the consideration paid therefor, and the name, address, and
residence certificate of the person furnishing the articles or rendering the service. The residence
certificate need not appear in the invoice when the other party to the transaction is a corporation or a
registered partnership or association." (As amended by Rev. Reg. No. 4-65, dated Jan. 22, 1965.)
15(1). INVOICES AND RECEIPTS. Sale and installation of an article purchased are separate
transactions. The sale and installation of air-conditioning units by the manufacturer thereof are distinct
and separate and, therefore, should be invoiced separately. (B.I.R. Ruling No. 240, s. 1961).
15(2). WHEN ISSUANCE OF EITHER INVOICES AND RECEIPTS SUFFICIENT. The issuance by a
merchant of cash sales invoices is sufficient, it not being necessary that he issue in addition sales
receipts. The choice of issuing a receipt or invoice is entirely with the taxpayer. (B.I.R. Ruling No. 149, s.
1960).
15(3). DATA TO BE SHOWN IN SALES INVOICE OR RECEIPTS. The invoice or receipt must contain the
name, address and the business style, if any, of the taxpayer and such columns as may be necessary and
appropriate for the business of the taxpayer concerned. The said invoices or receipts should be serially
numbered, bound in booklets of 50 and 100 and prepared in duplicate. (B.I.R. Ruling No. 272, s. 1960).
15(4). NUMBERS OF RESIDENCE CERTIFICATE OF TENANTS NEED NOT BE INDICATED. The serial
numbers of residence certificates of tenants paying P50.00 or more as house or space rentals need not
be indicated in the receipts issued for said payments. (B.I.R. Ruling No. 356, s. 1959).
15(5). PURPOSE OF INDICATING SERIAL NUMBER ON RECEIPTS AND INVOICES. Section 204 of the Tax
Code, implemented by Section 15 of the Bookkeeping Regulations provides that sales invoices should be
serially numbered for the purposes of preventing duplication of sales invoices (B.I.R. Ruling No. 567 s,
1959).
15(6). ERROR IN NUMBERING INVOICES. One who numbered the first set of his sales invoices from
1,000 to 3,000 and the second set from 2,500 to 3,000 has violated the provisions of Section 204 of the
Tax Code, as implemented by Section 15 of the Bookkeeping Regulations. (B.I.R. Ruling No. 567, s. 1959).
15(7). KEEPERS OF RESTAURANTS TO ISSUE TWO SETS OF SALES INVOICES OR RECEIPTS. Keepers of
restaurants must issue two sets of invoices or receipts serially numbered in duplicate, one for each sale
of food and refreshment and another for each sale of wine and liquor. (B.I.R. Ruling No. 395, s. 1959).
15(8). WHEN RESIDENCE CERTIFICATE NUMBER DATE AND PLACE OF ISSUE APPEAR IN SALES INVOICES
OR RECEIPTS. There is no law or regulations requiring that taxpayer who issues a sales invoice or
receipt for each sale or transfer of his merchandise or for services rendered by him, valued at P50.00 or
more, to attach to the said receipts or invoices the residence certificate of his customer or client. What
is required by the provision of Section 204 of the Tax Code is that such receipts or invoice shall be
serially numbered in duplicate and shall contain at least the name, address, and style, if any, of both the
person issuing them and the purchaser, customer, or client. In addition, the aforesaid receipts shall also
show the number, date and place of issue of the residence certificate of the purchaser, customer, or
client, pursuant to Section 15 of Revenue Regulations No. V-I. A notation in the invoice to the effect that
the number, date, and place of issue of the purchaser's or customer's residence certificate is on file in
the taxpayer records is substantial compliance with the aforesaid requirements under the said
Regulations. (B.I.R. Ruling No. 333. s, 1958).
15(9). SALES INVOICES OR RECEIPTS COVERING TRANSACTIONS OF P50.00 OR MORE SHOULD SHOW
CLASS "A" RESIDENCE CERTIFICATE NUMBER, DATE AND PLACE OF ISSUE.
In connection with the requirement of Section 15 of Revenue Regulations No. V-1, otherwise known as
the Bookkeeping Regulations, in relation to section 204 of the Tax Code to the effect that in the case of a
sale or transfer of merchandise in the amount of P50.00 or more, the invoice or receipt shall show the
name or style, if any, the business address of the purchaser or persons receiving the service as well as
the number, date, and place of issue of his residence certificate, information is hereby given that these
requirement of the regulations will be satisfied with the presentation by the purchaser of his class "A"
residence certificate only, if he is subject to the residence tax. However, the residence certificate need
not appear in the invoice or receipt when the other party to the transaction is a corporation or a
registered partnership or association. (B.I.R. General Circular No. V-78, dated March 15, 1960).
SECTION 16. Freight Stub Receipts and Passage Tickets Required of Common Carriers. Common
carriers, transportation contractors, and other persons subject to tax under section 192 of the National
Internal Revenue Code shall use freight stub receipts and passage tickets in duplicate to be printed in
accordance with such form as the Public Service Commission may, from time to time prescribe. In issuing
the freight stub receipt, the carrier or his agent shall enter in both the original and the duplicate the
name and address of the carrier, the date of issue, the name and address of the consignee, a description
of the goods shipped with a statement of their weight or quantity, the place of delivery to the carrier
and the destination of the goods, the route to be followed, the date of shipment, and the amount of
freightage. Every receipt issued must be signed by the carrier or his authorized agent. Passage tickets
shall also be in duplicate and must show the points of embarkation and destination and the amount of
charges. The original must be delivered to the passenger or the shipper, and the duplicate retained by
the carrier for record purposes and preserve for a period of five years from the date of issue. However,
passage tickets may not be issued in duplicate if common carriers employ the services of inspectors or
car auditors, etc. to check and supervise the issuance of the passage tickets by their conductors and if
they keep in their office daily record of the number of tickets issued to every conductor as well as the
number of tickets returned by each conductor after each trip or day's work.
16(1). AIRLINE PASSENGER TICKETS AND AIRWAY BILLS. The issuance of an airline company of
passenger tickets and airway bills which are serially numbered is sufficient compliance of Section 16 of
the Bookkeeping Regulations. However, Section 19 of the same regulations also require that the receipts
and airway bills should first be presented to the Bureau of Internal Revenue for registration and
approval. (B.I.R. Ruling No. 10, s. 1958).
SECTION 17. Admission Tickets and Other Records to be Issued or Kept by Persons Subject to
Amusement Tax. In the case of amusement or business places where fees or cover charges are
required to be paid for admission, the proprietor, lessee or operator shall provide himself with tickets
which shall evidence payment of fees or cover charges. The tickets shall be serially numbered and shall
indicate the name of the place of amusement or business and the fees or cover charges. The serial
number of each ticket and the admission fee or cover charge shall be printed on the ticket twice that
when the ticket is divided into two upon being presented for admission both the serial number and the
price shall appear on both parts.
Before the proprietor, lessee or operator of the place of amusement or business orders tickets for
printing he shall first send to the Commissioner of Internal Revenue, if the business is located in Manila,
or to the provincial revenue agent or deputy provincial or city treasurer, if in the province, a written
notice stating the name and address of the printer with whom he intends to place the order, the classes
of tickets, the inclusive serial numbers, the admission fee or cover charge, and the total number of each
class of tickets. The proprietor, lessee, or operator shall keep for record purposes the invoice or receipt
issued by the printer covering the order.
Before being used, the tickets shall first be presented to the Commissioner of Internal Revenue, if the
place of amusement or business is located in Manila, or to the provincial revenue agent or deputy
provincial or city treasurer, if in the province, for approval and registration. The said officers shall keep a
register of tickets in the form of a ledger, such that each place of amusement or business shall have a
separate account or record for the purpose of entering therein all the tickets presented for approval and
registration, indicating the date of registration, the classes of tickets, and the admission prices, the
inclusive serial numbers, and the number of tickets of each class. The proprietor, lessee or operator of
the place of amusement or business shall likewise keep a true and correct record of his stock of tickets,
indicating the total number of registered and unregistered tickets, and of the registered tickets, how
much has been sold from day to day.
All such proprietors, lessees, or operators shall prepare monthly statements of the daily box receipts
from admission fees or cover charges, showing the total number of each particular class of tickets sold,
the unit price of each class and the total amount collected, duly signed by the proprietor, lessee, or
operator, or by manager. The said statements shall be submitted to the Commissioner of Internal
Revenue, if the place of amusement or business is in Manila, or to the deputy provincial or city
treasurer, if in the province, not later than the 10th day of each month as regards the gross receipts for
the preceding month. Duplicate copies of the said statements shall be kept by the proprietor or operator
at the box office as part of his accounting system and the same shall be preserved in the same manner
as the books of accounts and other records.
Other persons subject to tax under section 260 of the National Revenue Code shall keep true and correct
records of their gross receipts. In case any of the records and registers hereinbefore mentioned are not
appropriate for their business, they shall devise a system for recording their receipts appropriate or their
business an submit the same, before they are used, to the Commissioner of Internal Revenue, if the
place of business or amusement is in Manila, or to the provincial revenue agent or city or deputy
provincial treasurer, if in the province, for registration and approval.