Mandatory Submission of Sales Machines Inventory

Sections 6 of the National Internal Revenue Code (NIRC) of 1997, as amended provide the legal basis for the Circular’s requirements on invoicing/receipting and related BIR controls.
The Circular is issued in conformity with Revenue Memorandum Circular (RMC) No. 30-2015 on Permits to Use subject machines.
The Circular requires submission of inventory lists for purposes of validation, ensuring the integrity of the machine-based sales invoicing/receipting system.
The Circular’s mandatory submission is framed as a one-time validation/updating of the inventory of the machines.

The Circular requires submission by all concerned taxpayers using or having installed CRMs/POSs/SPMs and/or any other similar machines generating sales invoices/receipts.
The machines covered must be used by business establishments in business operations or otherwise and must be physically located in the business premises.
The inventory list covered is the inventory of all subject machines as of June 30, 2015.
The Circular requires submission from taxpayers whether they are classified as large taxpayers or non-large taxpayers, based on their BIR registration category.

Taxpayers must submit an Inventory List of all covered machines as of June 30, 2015.
The inventory list must be submitted in hard copy and soft copy, using the prescribed schedule in Excel format (Annex “A-a”).
The Excel file must be saved/stored in a Digital Versatile Disk-Recordable (DVD-R).
The DVD-R must be labeled in accordance with the format prescribed in Annex “A-b”.
A Notarized Sworn Declaration must be submitted using the format in Annex “A-c”, with certification by the taxpayer/authorized representative as to the veracity of the data/information submitted.

The inventory list, the DVD-R label, and the Sworn Declaration must be signed by any “Principal Officer” duly designated through a Board Resolution issued for the purpose.
For corporate taxpayers, the Principal Officer must be sworn along with the Corporate Treasurer or Assistant Treasurer.
For individual taxpayers, the individual taxpayer must sign the inventory list, the DVD-R label, and the Sworn Certification.
If an individual taxpayer authorizes another person as attorney-in-fact, the authority must be evidenced by a Notarized Special Power of Attorney (SPA) issued for that purpose.
The Sworn Declaration must be notarized in accordance with the Circular’s requirement to submit a Notarized Sworn Declaration.

Taxpayers must submit the hard copies of the inventory list together with the DVD-R and the Sworn Declaration.
Submission must be made on or before July 31, 2015.
Large taxpayers registered with the Large Taxpayers Service (LTS) must submit to Large Taxpayers Assistance Division (LTAD) or Excise Large Taxpayers Regulatory Division (ELTRD), or to Large Taxpayers Division (LTD-Makati/Cebu).
Non-large taxpayers must submit to the concerned Revenue District Office (RDO) or Revenue Region (RR) where the taxpayer is duly registered.

The LTAD, ELTRD, LTD-Makati/Cebu, and the concerned RDO/RR must cause immediate verification and approval of pending applications for cancellation/withdrawal for use of the machines.
Cancellation/withdrawal for use must be processed for machines retired or sold, consistent with ensuring achievement of the one-time validation/updating purpose.
BIR action must ensure the inventory validation/updating process is achieved through the approval of relevant pending applications.

Automatic revocation applies to the taxpayer’s permit to use CRM/POS/SPM and other similar sales machines for failure to comply with this Circular.
Immediate post-evaluation of the CRM/POS/SPM applies as a consequence of non-compliance.
The Circular imposes the penalty under Section 250 of the NIRC of 1997, as amended for failure to file an information return, statement, or list on the date prescribed.
The penalty is PHP 1,000 for each failure, unless the taxpayer shows the failure is due to reasonable cause and not due to willful neglect.
The Circular clarifies that willful failure implies fraud, which cannot be compromised as stated in Revenue Memorandum Order (RMO) No. 7-2015.
Failure triggers inclusion in the priority audit program of the concerned investigating Revenue Office.
The Circular provides that payment of the appropriate penalty does not relieve the taxpayer from submitting the required Inventory List.
The BIR must enforce appropriate measures to ensure full compliance with the Circular.

Revenue officials and employees are enjoined to give the Circular as wide a publicity as possible to ensure awareness and compliance.