QuestionsQuestions (BIR REVENUE REGULATIONS NO. 9-2009)
RR 9-2009 defines requirements, obligations, and responsibilities for taxpayers on electronic recordkeeping and the maintenance/retention of electronic books, records, and sources of information under the NIRC; provides requirements for retention, access, and submission of electronic records to the BIR; and makes mandatory for Large Taxpayers under RR 1-98 the adoption/maintenance of a Computerized Accounting System (CAS).
An electronic record is a collection of related information in an electronically readable format. It explicitly does not include hard-copy records created/recorded on paper or stored in or by an imaging system such as microfilm, micro-fiche, or storage-only imaging systems.
Accessible means the taxpayer must provide an acceptable copy in an electronically readable and useable format for BIR auditors to process/analyze on BIR equipment. Useable means the electronic records can be processed and analyzed with BIR audit software. The format must be non-proprietary and commonly used, compatible with BIR software; encrypted/proprietary backups must be restorable to an accessible and useable state.
Large Taxpayers classified under Revenue Regulations No. 1-98 are required to maintain and/or adopt a CAS.
They must register their Computerized Accounting Systems not later than December 31, 2009.
No. RR 9-2009 states that deficiencies in the software do not relieve the taxpayer from the responsibility to keep adequate electronic records.
They must contain sufficient transaction-level detail so that the details underlying the electronic records can be identified and made available to the BIR upon request.
The retained records must be capable of being retrieved and converted to a standard record format in accordance with Revenue Regulations No. 16-2006.
No. RR 9-2009 states taxpayers are not required to construct electronic records other than those created in the ordinary course of business; if a taxpayer does not create the electronic equivalent of a traditional paper document in the ordinary course of business, it is not required to construct such a record for tax purposes.
The level of record detail, combined with other related records, must be equivalent to an acceptable paper record (e.g., vendor name, invoice date, product description, quantity, price, tax amounts, tax status indications, and shipping details). Codes may be used, but the taxpayer must provide a method for converting coded information into an auditable data.
If the taxpayer retains invoice data or other relevant accounting records that satisfy equivalent detail requirements and an audit trail, authenticity, and integrity can be established—e.g., retaining verified EDI invoice data in the accounts payable system plus supporting master files/description lists, while not retaining the original EDI transaction itself.
The electronic records must show an audit trail from source document(s) (paper or electronic) to summarized financial accounts, including links to associated processes/events (e.g., POS/e-commerce, receipts, payments, inventories) where relevant, and the taxpayer must ensure reliability/readability of these transaction records.
Taxpayers must retain source documents such as sales invoices, purchase invoices, cash register receipts, formal written contracts, credit card receipts, delivery slips, deposit slips, work orders, dockets, cheques, bank statements, tax returns, and may include emails/other correspondence where relevant for tax purposes.
Documentation includes record formats/layouts, field definitions (meaning of codes), file descriptions (dataset names), and detailed charts of accounts and account descriptions; it must also include mandatory fields for specified journals/ledgers such as General Ledger, General Journal, Sales Journal, Purchase Journal, and Inventory Book.
Controls include: access controls (authorized users only); input/output controls (accuracy/security); processing controls (integrity); backup controls (retention and recovery); and controls preventing unauthorized editing/deletion—changes must be made by journal entry with documentation of person, date, previous details, current details, and reason for change/deletion.
Yes, but the capability to access and retrieve data must be preserved and changes must not result in loss/destruction/alteration of information relevant to determining taxes. Taxpayers must retain documentation of changes and report these system/software changes to the BIR before implementation.
Records must be kept at the taxpayer’s place of business in the Philippines or another place designated by the Commissioner and made available during business hours. Records kept outside the Philippines and accessed electronically from the Philippines are not considered records in the Philippines; however, BIR may accept copies if made available in the Philippines in an electronically readable and usable format for audit and containing adequate details to support filed returns.