Question & AnswerQ&A (BIR REVENUE REGULATION NO. 5-94)
The main purpose is to effectively monitor, for tax purposes, the acquisition and disposition of inventory of goods by certain taxpayers who sell goods in the course of their trade or business.
Any taxpayer who sells goods in the course of his trade or business is required to register the place or premises where his inventory of goods for sale or for use in his business are kept.
The taxpayer must register the place or premises with the Revenue District Office having jurisdiction over the location of the said place or premises.
All places or premises where inventory is kept must be registered with the Revenue District Office or Offices having jurisdiction over the locations of each place or premise.
The registration must be done within thirty (30) days from the date the place or premises has been used for storage or keeping of inventory.
They must keep a book of inventories where the quantity, description, unit cost, and total cost of every item of stock-in-trade, materials, supplies, and other goods found in the premises are recorded at the start of the business and at the close of the taxable year.
The initial inventory must be submitted within ten (10) days after starting the business and subsequent inventories within thirty (30) days after the close of the accounting period employed.
Yes, the book of inventories must be registered with the corresponding Revenue District Office before use by the taxpayer.
Any person who fails to register and keep the required book of inventories shall be penalized under Section 274 of the National Internal Revenue Code, as amended.
Any person already engaged in the sale of goods must register their place or premises used for storage or keeping of inventories within thirty days from the date of effectivity of these regulations.
These regulations took effect fifteen days after publication in any newspaper of general circulation.