Title
Rules on cash register and POS machine use
Law
Bir Revenue Regulations No. 10-99
Decision Date
Jun 25, 1999
BIR Revenue Regulations No. 10-99 establishes the procedures and conditions for businesses to obtain permits for using cash registers and point-of-sale machines in lieu of traditional sales invoices, ensuring compliance with tax regulations and proper record-keeping.
cash register
point
sale

Lines of business eligible for permits

  • Section 1 provides that a permit to use cash registers and POS machines in lieu of sales invoices or receipts is issued only to proprietors, owners, or operators of the following lines of business:
    • Supermarkets
    • Department stores
    • Drugstores
    • Bookstores
    • Groceries
    • Bakeries
    • Restaurants, bars, beer gardens, refreshment parlors, and other eating places
    • Record bars and music stores for cinematographic films
    • Video shops selling and leasing out
    • Garages and other parking spaces
    • Gasoline stations
    • Hotels, motels, lodging houses, and the like
    • Token exchange stations
    • Recreational and amusement centers
  • Section 1 authorizes the Commissioner of Internal Revenue to qualify other lines of business in meritorious cases, considering modern business practices.

Permit application and filing requirements

  • Section 2.1 requires the application to be in the form of a joint sworn declaration by:
    • The applicant; and
    • The distributor/dealer or vendor of the machine (Annex “A”).
  • Section 2.1 requires the joint sworn declaration to include, for the applicant:
    • Name, address, business name/style, and VAT or non-VAT number
    • Kind/line of business and the address where the machine will be used
    • Name, business style, address, and VAT or non-VAT number of the distributor/dealer or vendor
  • Section 2.1 requires machine details to be specified:
    • For cash register machines: brand, model, serial number, type of all parts (electronic or mechanical; resettable or non-resettable accumulating grand total; new or secondhand)
    • For POS machines: brand, model, serial numbers, type of all parts (new or secondhand) and the software to be used
    • Maximum accumulating sales capacity, reset counter number, and other essential features
  • Section 2.2 requires filing with the Revenue District Officer within whose jurisdiction the business establishment where the machine will be used is located.
  • Section 2.2 requires acceptance only if submitted with all required attachments, including:
    • A copy of the applicant’s current Annual Registration Fee Return (BIR Form No. 0605)
    • Copies of the business name/style certificate of registration issued by the Bureau of Internal Revenue and Bureau of Domestic Trade, and for corporations/partnerships, a copy of the certificate with the Securities and Exchange Commission
    • Sample receipts for a “no sale” transaction showing the machine’s legible identification and consecutive receipt numbers with date
    • A sample receipt showing accumulated grand total readings and, for electronic/POS machines, the reset counter number
    • For machines with resettable accumulating grand total: all proprietor’s and reset keys and/or a copy of the software to be used and customizations
    • Operating manuals
  • Section 2.2 relieves applicants from submitting the BIR/DTI/SEC registration documents if the same were already submitted in a prior application for a cash register/POS machine of the same kind or configuration.

Permit issuance, inspections, and approvals

  • Section 2.3 requires the Revenue District Officer to issue the permit (Annex “B”) upon receipt of a duly filed application and proper inspection and evaluation by the Revenue Officer assigned by the Revenue District Officer.
  • Section 2.3 conditions permit issuance on showing that the applicant is provided with a duly registered cash register sales book, appropriately identified to each machine being applied for, showing the following columns:
    • Date of sale
    • Inclusive consecutive receipt numbers
    • Previous reading
    • Present reading
    • Sales—VAT
    • Sales—Non-VAT
    • Sales over-run or overflow count
    • Reset counter number
    • Remarks
  • Section 2.3 requires that for taxpayers under the Large Taxpayers Division (LTD), the application with attachments be filed with the LTD for inspection/evaluation and final approval by the LTD—Division Chief.
  • Section 2.3 requires that if the machine will be used in the city/municipality where the Regional Office is situated, the permit is issued by the Regional Director, except when delegated to the Revenue District Officer of the district where the Director’s office is located.
  • Section 2.4 requires separate permits for every duly filed application for every line of business; the permit is issued by the Regional Director or the Revenue District Officer concerned.

Conditions of use for cash registers and POS

  • Section 2.5 requires the permit to be granted subject to the following conditions:
    • The machine is used exclusively for the operation of only one line of business covered by the permit; simultaneous operation in another unpermitted line of business requires sales to be covered by corresponding registered sales invoices or receipts.
    • The machine is equipped with two (2) rollers or its equivalent:
      • One for the audit journal tape (audit and internal revenue tax purposes); and
      • One for the customers’ tape producing itemized, consecutively numbered receipts,
      • Provided the tape receipts are of a quality preserved for the period within which the Commissioner is authorized to assess and collect taxes under Sections 203 and 222 of the NIRC, as amended.
    • When the machine records a sale, the amount must automatically print on:
      • The customer’s receipt; and
      • The audit journal tape or its equivalent,
      • and the machine must never be operated without the corresponding tapes installed on both rollers or their equivalent.
    • The machine must have an operating reset counter that advances by one every time the total is reset to zero.
    • Imprints on the customers’ and audit journal tapes must always be legible.
    • Electronic cash register machines with volatile memory must be connected to a power source at all times and must not be used as reserve units to protect memory mechanisms/circuits and preserve stored data.
    • Upon filing, all proprietor’s and reset (z) keys of machines with resettable accumulating grand total must be surrendered to the Revenue District Officer for safekeeping and control.
    • Machines with resettable accumulating grand total must not be reset except when expressly authorized by the Revenue District Officer.
    • The proprietor must not change business name or use of the registered machine, nor transfer it to another business location, branch/establishment, or otherwise, without prior written notice to the proper Bureau office having jurisdiction over the machine.
    • The proprietor must not repair, upgrade, change, modify, update, or remove the machine without prior written notice to the proper Bureau office having jurisdiction over the machine.
    • After repair/upgrade/change/modification/update/removal and before reuse, the proprietor and the repairer must submit a joint sworn statement to the Revenue District Officer (Annex “C”), and the proprietor must file a new application for inspection and evaluation by the Revenue Officer assigned under that jurisdiction.
    • Registered machines may be withdrawn from use only upon prior application with approval of the Regional Director or the Revenue District Officer (as applicable) for retirement or sale.
    • Approving retirement/sale requires immediate verification of the machine and accounting records to ensure all sales data up to the last day used are properly recorded, and the approval must show:
      • Reset counter number,
      • Accumulated grand total sales, and
      • Number of the last cash register receipt issued (Annex “D”).
    • The permit previously granted must be recalled for cancellation upon withdrawal approval.
    • The original permit (Annex “B”) must be securely attached to the back of the machine and conspicuously visible to the public; the machine’s serial number must be printed in bold figures on the back for verification.
    • For applicants engaged in both taxable and non-taxable business activities, a permit may issue for a machine capable of clearly indicating separately in words the sales of taxable and non-taxable items.
  • Section 2.5(o) requires cash register receipts to show, among others:
    • Proprietor’s business name
    • Municipal/City address (and, for branches, identify the branch such as “Branch 1” or “Branch 2” in Manila, etc.)
    • Proprietor’s VAT or non-VAT number
    • Amount of the transaction
    • Date of the transaction
  • Section 2.5(o) prohibits use without the customer’s receipt clearly showing all required data, except that receipts may be used during installation of the tape heading when authorized by the Regional Director or the Revenue District Officer for a period not exceeding thirty (30) days from the date of such authority.
  • Section 2.5(p) requires that the receipt numbering mechanism/circuit of a registered machine not be disturbed or tampered with to maintain consecutive receipt numbers on customer receipts and audit journal tape.
  • Section 2.5(q) requires:
    • The subsidiary cash register sales book to be kept at all times at the place where the machine is located and be available for verification by duly authorized internal revenue officers.
    • All cash register and POS machines, whether registered or not, to be subject to inspection anytime by duly authorized internal revenue officers.

Sales recording, books, and daily transfers

  • Section 3 requires audit journal tape entries to be summarized at the end of each day and the totals transferred to the cash register sales book.
  • Section 3 requires that sales totals in all registered machines be summarized and entered in the Cash Receipts Book or Columnar Journal not later than twelve o’clock noon of the following business day.
  • Section 3 requires the Cash Receipts Book or Columnar Journal to maintain a special column strictly for sales recorded through the cash register or POS machines to distinguish them from sales covered by registered sales invoices or receipts.
  • Section 3 requires that used portions of the audit journal tape, identified to the machine and certified correct by the proprietor or authorized representative, be cut off at the end of each business day.
  • Section 3 provides that the cut-off used audit journal tape constitutes the basic document supporting daily sales entries in the cash register sales book.
  • Section 3 requires preservation of the cash register sales book and used audit journal tape (or equivalent) as part of accounting records within the same period prescribed by applicable laws, rules, and regulations.

Internal control machines with warnings

  • Section 4 allows proprietors, owners, or operators to use a cash register machine for “internal control purposes” provided that duly registered sales invoices or receipts are issued for every sale.
  • Section 4 requires prior notification to the proper Revenue District Officer of the intention to use the machine solely for “internal control” and requires securing a poster (Annex “E”) for attachment at the back of the machine conspicuous to the public.
  • Section 4 mandates the poster’s warning text exactly as:
    • “WARNING THIS MACHINE IS NOT AUTHORIZED TO ISSUE RECEIPT. ASK FOR SALES INVOICE. REPORT ANY VIOLATION TO THE B.I.R. COMMISSIONER OF INTERNAL REVENUE”
  • Section 4 requires that the poster not be detached or covered from public view at any time.
  • Section 4 permits cash register machines without a built-in receipt dispensing mechanism or roller for mounting the customer’s roll to be used for internal control purposes without complying with the poster requirements.

Exemption for purchaser identification on receipts

  • Section 5 exempts persons authorized to use cash register machines from showing on the cash register receipt the purchaser’s name, business style, address, and taxpayer identification number in cases where the purchaser is a VAT registered person, regardless of the amount of sales.
  • Section 5 preserves the purchaser’s right to require a registered sales invoice or official receipt.

Special authorization for mixed-line cash registers

  • Section 6 authorizes the Commissioner to approve a cash register machine with built-in capacity to accumulate sales data for different lines of business.
  • Section 6 requires that when authorized to issue cash register receipts for multiple lines, the distinction of sales by lines of business must be shown on machine tapes in words rather than by code or symbol.
  • Section 6 requires the applicant to file the application with the proper Revenue District Officer, who must investigate the veracity and merit of representations regarding built-in mechanisms, operating features, and necessity for use on those other lines of business.
  • Section 6 requires the report to be submitted to the Regional Director for action, or for taxpayers in the LTD, to the Large Taxpayers Division for appropriate action.

Registration for unmanned vending/token machines

  • Section 6.1 requires unmanned bill, coin, or token operated machines capable of dispensing goods and services in exchange for bills, coins, or tokens without the capacity to issue cash register receipts to be registered with the proper Bureau office having jurisdiction over the machine.

Penalties and consequences for violations

  • Section 7 provides that any violation of the Regulations is sufficient ground for the revocation of the permit to use cash register or POS machine.
  • Section 7 requires that if the violation is equivalent to:
    • Non-issuance of sales invoice or receipt; or
    • Issuance of an unregistered receipt,
    • the violation is dealt with in accordance with Section 264 of the NIRC of 1997.

Transitory provisions and reapplication

  • Section 8.1 requires each Regional Director to require submission of an inventory of all cash register and POS machines within jurisdiction using the prescribed form (Annex “F”) within sixty (60) days from effectivity of the Regulations.
  • Section 8.1 excludes from inventory machines not built with receipt dispensing mechanisms or not equipped with any roller to mount the customer’s receipt.
  • Section 8.2 keeps prior permits valid for sixty (60) days from effectivity of the Regulations, and requires taxpayers to reapply for a new permit with the proper Bureau office having jurisdiction over the machine upon effectivity.
  • Section 8.2 provides that after reapplication, permits remain valid until revoked by the Commissioner of Internal Revenue.
  • Section 8.3 requires the cash register sales book or its equivalent to be registered with the proper Revenue District Office before use.
  • Section 8.3 grants that for initial implementation, cash register sales book for existing authorized machines must be registered with the Bureau within sixty (60) days from effectivity.

Repeal and immediate effectivity

  • Section 9 repeals or modifies all revenue regulations, circulars, orders, memoranda, or portions thereof inconsistent with the Regulations.
  • Section 10 provides that the Regulations take effect immediately.
  • The Regulations are adopted on June 25, 1999 by the Secretary of Finance, Edgardo B. Espiritu, with recommending approval by the Commissioner of Internal Revenue, Beethoven L. Rualo.

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