Rules on CRM/POS Accreditation and Use

Policy, purpose, and objectives

The regulations re-focus the CRM/POS registration process to achieve effective supervision and control by the Bureau over the use of such machines.
The regulations simplify the registration process and reduce administrative requirements for issuance of permits to use CRMs and/or POSs.
The regulations reduce administrative costs incurred by the Bureau.
The regulations ensure speedy and efficient collation of accurate data on transactions recorded through CRMs/POSs.

Coverage and regulated machines

The regulations cover all business machines used in the conduct of business to record sales transactions, including Cash Register Machines (CRMs), Point of Sale (POS) Machines, Taximeters, and Handheld or Mobile Devices.
The term “Sales Machine” covers a machine or device that dispenses receipts/invoices for purposes of tendering sales transactions.
The regulations apply to taxpayer-establishments intending to use covered machines.
Machine compliance requirements apply to machine manufacturers/dealers/distributors/vendors and machine users (establishments).

Definitions that control interpretation

A Cash Register Machine (CRM) is a memory-based machine that records sale/transfer of merchandise or services rendered in lieu of a registered sales invoice or official receipt, using firmware installed in an EPROM chip.
A Point of Sale (POS) Machine is a computerized replacement for a CRM with capabilities to record and track customer orders, process and debit/credit card accounts, link to other systems in the establishment’s network, and manage inventory.
CRM/POS Machines Linked to Computerized Accounting System (CAS) are CRMs/POSs electronically connected to a CAS or connected through a central server via network as described in RMO No. 29-2002.
A Computerized Accounting System (CAS) integrates an establishment’s accounting components to generate computerized Books of Accounts and computer-generated accounting records and documents.
Stand-Alone CRM/POS machine runs independently and is not linked or connected to any other machine or system.
System Enhancement covers any change or modification in system software or architecture components that changes, adds value, or improves the system.
Volatile Memory loses content when power is turned off.
Non-Volatile Memory retains its content when power is turned off.

Accreditation: boards, requirements, and revocation

Suppliers extending the “immediate use” benefit must have their CRM/POS brand-model/software accredited prior to sale/distribution.
Every supplier/distributor/dealer/vendor must apply for accreditation of machine models and/or software with either:
- the National Office CRM/POS Machine Accreditation Board (NMAB) for suppliers under the Large Taxpayers Service; or
- the Regional Office MAB (RMAB) for suppliers under the Revenue District Offices.
Accreditation requires a Sworn Declaration by the supplier/distributor/dealer/vendor, containing required information, including:
- distributor identity and tax status; and
- for CRMs, brand/model/type of parts, memory feature (resettable or non-resettable accumulating grand total), machine properties (new or secondhand), maximum accumulating sales capacity, reset counter number, and other essential features; and
- for POSs, brand/model, machine properties (new or secondhand), software to be used, and required essential features.
Accreditation applications must be supported by attachments including:
- a copy of the distributor/dealer/vendor’s current Annual Registration Fee Return (BIR Form No. 0605);
- copies of the distributor’s Certificate of Registration of Business Name/Style and, for corporations/partnerships, SEC registration copies (no longer required if accreditation for other models/software was already granted);
- a sample receipt showing required receipt data under Section 6.0;
- a sample receipt showing daily sales reading and accumulated grand total;
- a Demo or Evaluation copy of the POS software;
- the System Description and design/structure of the machine submitted for accreditation;
- the Master Reset Key/Password (whichever applies) to read sales data of all units of the model;
- brochure and operating manual;
- an accreditation application is not considered duly filed if any required document is not submitted together with the application.
NMAB/RMAB must conduct actual system demonstration/machine inspection attended by the concerned board members to determine compliance with requirements under Sections 5.0 to 7.0.
Evaluation and inspection procedures must be undertaken and completed within five (5) working days from receipt of the application and complete documentary requirements.
After recommendation of the C/P-MAB, accreditation is issued by the:
- Chief, LTAD I and II / LTDO for large taxpayer suppliers; or
- Revenue District Officer for regular taxpayer suppliers.
Accreditation is limited to the specific brand-model/software presented, and any upgrading, integration, or modification is subject to prior approval.
Accreditation may be immediately revoked for violations of the conditions, and the supplier/dealer/vendor is subjected to appropriate sanctions under existing internal revenue laws and regulations.
A list of duly accredited machines must be posted on bir.gov.ph.

Machine specifications for accreditation

CRMs/POSs and similar business machines must comply with specifications, and the manufacturer/dealer/distributor/vendor must attest compliance through a sworn declaration.
Machines must have a non-resettable accumulating grand total with at least ten (10) digits (or 12 digits, including decimal points).
The taxpayer must obtain advance approval of the next accumulating grand total from the concerned Revenue District Office within thirty (30) days before full consumption/utilization of the previously reported accumulating grand total.
A CRM must have a reset counter advancing by one (1) every time the accumulating grand total sales is reset to zero; POS and similar machines must generate a unique sequential number for each transaction entered.
Machines must be tamper-free and must not be switchable to “training mode,” “no-sale transaction mode,” or other manipulations that avoid recording a sale transaction.
Machine tape must boldly print “THIS IS NOT AN OFFICIAL RECEIPT.” on paper tapes dispensed by the machine.
The machine and/or central server must generate a report showing daily sales reading and the accumulated grand total.
The machine must have non-volatile memory or be equipped with a recovery/back-up system.
The machine must reflect/store sales data including sales discounts and refunds.
For businesses with both taxable and non-taxable items, machines must clearly indicate separately (in words) taxable (VAT) and non-taxable (Non-VAT) items and must generate separate reports summarizing VAT sales and Non-VAT sales.
For CRMs, a safety/quality structure is required, including:
- two (2) rollers or equivalent: one for the audit journal tape and one for customers’ tape copies as itemized consecutively numbered receipts;
- tape receipts and printed data must be of preservation quality within the assessment/collection period under Sections 203 and 222 of the NIRC, as amended;
- a safety mechanism must prevent operation if only one roller is used.
For CRM discounts/refunds recording, the amount of sales discounts/refunds must automatically print on both the customer tape and the audit journal tape (or equivalent).
For POS machines connected to a server, all sales per POS must be automatically and completely recorded in the central server, with stored data preserved for the period under Sections 203 and 222 of the NIRC, as amended.
No POS machine model may be accredited unless the distributor/dealer/vendor attests that the Bureau can view, validate, and verify sales/receipts summaries submitted pursuant to Section 6.0, and monitoring controls/verification techniques must be disclosed to identify voided sales and actual sales not recorded in the proprietor’s accounting records.

Receipt/invoice data requirements

Sales machines must generate receipts/invoices showing required data items a to k under Section 6.0, with items a to d uniformly provided in the Official Receipt Header.
Required receipt/invoice data include:
- business name;
- registered taxpayer’s name with BIR;
- taxpayer identification number (12 digits including branch code);
- address where the machine will be used;
- receipt/invoice number (minimum of 6 digits);
- machine model accreditation number;
- date of transaction;
- quantity;
- product description;
- amount of transaction with separate totals for VAT and Non-VAT transactions; and
- the phrase “THIS SERVES AS AN OFFICIAL RECEIPT.”
A business authorized to use a CRM or POS is exempted from showing on the CRM/POS receipt the purchaser’s name, business style, address, and TIN.
If the purchaser is a VAT-registered entity and the CRM/POS can show purchaser name/address/TIN, the purchaser must request a manually preprinted and pre-numbered sales invoice or official receipt with approved Authority to Print (ATP), and the seller must issue it.
If the purchaser’s input tax claim depends on purchaser identification capability, the failure of the required manual ATP receipt issuance results in disallowance of the purchaser’s claim for input tax.
When manual receipts are issued, the CRM/POS-generated receipt must be attached to the duplicate manual receipt to avoid a double take-up of sales.
A sample design of the receipt must be submitted upon application for accreditation.

Permits, registration, and use conditions

After effectivity, only CRMs/POSs compliant with specifications in Section 5.0 and duly registered under Section 9.0 may be issued “Permits to Use” for generating required invoices/receipts under Section 6.0.
Existing permits issued before effectivity remain valid until revoked by the Commissioner of Internal Revenue, provided establishments comply with reportorial requirements prescribed under a separate Revenue Regulations.
CRM/POS machines may be used immediately without prior Bureau inspection and authorization when:
- the model/system model is among those already accredited by the Bureau;
- the supplier has registered the machine with the Bureau on behalf of the user-firm under Section 9.0; or
- if not previously accredited but compliant with specifications under Sections 5.0 and 6.0, the manager/owner may register it under Section 9.0 and is issued a provisional authority to use the machine.
The Bureau may inspect any machine/system registered under these regulations at any time during store hours; store personnel must present the machine for inspection and reading by concerned revenue personnel.
A machine using “immediate use” provisions later found non-compliant may be considered subject to seizure.
A manufacturer/dealer/vendor/distributor must register, on behalf of the buyer/user, the CRM/POS machine to be sold/distributed not later than five (5) days from the date of sale and before actual use.
Registration must be done manually with the RDO/LTAD I and II/LTDO or electronically through the Bureau’s e-mail or website.
Registration disclosures must include:
- buyer TIN (12 digits);
- VAT or non-VAT number of buyer;
- serial number, brand and model;
- present reading and date of reading.
If filed through e-mail/website facilities, the applicant receives a system-generated Permit, printable from the applicant’s computer.
The Permit must be forwarded to the buyer, serves as the taxpayer’s authorization to use the machine, must be securely attached to the back of the machine, and must be conspicuously visible to the public.
The serial number must be printed in bold figures to facilitate verification.
Upon registration, an accreditation-registration number is issued and must be printed on receipts/invoices pursuant to Section 6.0.
Use of CRM/POS machines is subject to user conditions, including:
- For CRMs:
  - maintain a duly registered cash register sales book for each machine used with required columns under the relevant section;
  - operate only with corresponding tapes installed on both rollers or equivalent;
  - keep customer and audit journal tape imprints legible and preserved under Sections 203 and 222 of the NIRC, as amended;
  - keep the subsidiary cash register sales book at the CRM location and available for verification by authorized internal revenue officers;
  - preserve all accounting records within the assessment/collection period under Sections 203 and 222 of the NIRC, as amended;
  - electronic CRMs must have non-volatile memory or be used with a working recovery system at all times.
- For POS machines:
  - secure Bureau approval in writing for use and document-range serial numbers, at least one (1) month before previously authorized document range numbers are consumed;
  - operate only with the corresponding electronic journal.
- For use of both CRM and POS:
  - record and report all resets as required under Section 5.1.1 and related provisions;
  - never switch to training/no-sale or otherwise impair recording of sales unless the receipt/invoice clearly indicates “THIS IS NOT AN OFFICIAL RECEIPT” as required by Section 5.1.2;
  - use the machine exclusively for one line of business covered by the Permit; sales in an unpermitted line must use registered sales invoices or receipts;
  - do not change business name, use of registered machine, or transfer to another location/branch/establishment without prior written notice to the Bureau office with jurisdiction over the proprietor’s principal place of business;
  - do not repair, upgrade, change, modify, update, or remove the machine from specified location without prior written notice to the jurisdictional Bureau office;
  - after repairs/updates/modifications and before re-use, require a joint sworn statement by the user and the repair/updater to the Chief LTAD I/II/Chief LTDO/RDO, followed by NMAB/concerned RMAB inspection and evaluation prior to actual use;
  - withdraw a registered machine from use (retirement or sale) only via prior application and approval by the Chief LTAD I/II/Chief LTDO/concerned RDO, with immediate Bureau verification of machine and accounting records and approval reflecting reset counter number, accumulated grand total sales, and number of last cash register receipt issued; cancellation requires submission of the Permit to Use for cancellation;
  - never use a CRM/POS without the customer receipt clearly indicating all data required under Section 6.0, except for machines authorized by the Chief LTAD I/II/Chief LTDO/RDO for up to thirty (30) days from authorization pending installation of the Official Receipt Header;
  - do not disturb or tamper with the receipt numbering mechanism/circuit to preserve consecutive transaction-number sequences.

Machine sold reporting and quarterly reconciliation

Machine distributors/dealers/vendors must submit electronically (e-mail or Web) to LTAD I or II/LTDO for large taxpayers or to the concerned RDO for regular taxpayers a Summary List of Machines Sold (Annex C) within fifteen (15) days from the end of each taxable quarter.
The Summary List must include:
- machine accreditation-registration number;
- BIR issued Provisional Permit Number;
- brand and model;
- date of sale;
- date of registration;
- buyer/proprietor name and TIN (VAT or non-VAT);
- kind/line of business and address/branch where used;
- present reading and date of reading;
- software used and customizations made for POS machines.
After submission, the Bureau reconciles the Summary List with its Registration Database.
Any discrepancy is subject to verification by the concerned RDO.

Internal-control machines and warning poster

A proprietor/owner/operator may use a cash register or POS machine of any type for “internal control purposes” if registered sales invoices or receipts are issued for every sale.
The proprietor must first notify the machine distributor/dealer/vendor of the intent to use solely for internal control.
The distributor/dealer/vendor must inform the appropriate Bureau office of such intention and must secure a poster to be securely attached to the machine conspicuous to the public, stating:
- “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”.
The poster must never be detached or covered from public view.
CRMs without a built-in receipt dispensing mechanism or without a roller to mount the customer roll may be used for internal control without complying with the poster/notification requirements described for internal control use.

Other kinds/types and special authorizations

A CRM with built-in capacity to accumulate sales data of different lines of business may be authorized by the Commissioner to issue cash register receipts for all such lines, provided sales by line of business are clearly indicated on the paper tapes in words, not in codes or symbols.
Application for this purpose is filed by the distributor/dealer/vendor with the Chief LTAD I/II/Chief LTDO/Revenue District Officer having jurisdiction over the principal place of business.
The jurisdictional Chief/Officer must cause investigation of the veracity and merit of the applicant’s representations on built-in mechanisms and the necessity of use on other lines of business.
A written report on verification must be submitted to the DCIR-Officer-in-Charge, Large Taxpayers Service, or the Regional Director for further appropriate action.
Unmanned bill, coin or token-operated machines dispensing goods/services in exchange for bills/coins/tokens without the capacity for issuing cash register receipts must be registered as provided for other machines, and cash receipts of each machine must be included in the quarterly Summary List of Cash Receipts per CRM/POS machine (Annex C).
Taxi-meters require a separate Revenue Regulation for specifications of qualified taxi meters, but accreditation and registration procedures in these regulations cover taxi-meters.

Transitory inventories and incentives

Distributors/dealers/vendors must submit to the Chief LTAD I or II/Chief LTDO/RDO an inventory of machine stocks not compliant with these regulations and a timetable indicating when stocks will be consumed and when non-compliant machines will be sold only after they comply.
No penal sanctions are provided at this time, and suppliers are urged to immediately pull out of distribution/sale non-compliant machines and warn buyers about repercussions of using non-compliant machines.

Repeals and compliance changes

All revenue regulations, circulars, orders, memoranda, or portions thereof inconsistent with these regulations are repealed or modified accordingly.