Over the past few days, several clients have reached out with concerns about the Bureau of Internal Revenue’s (BIR) newest invoice requirement. Many have expressed frustration and concerns about the changes required in their systems, which must be reconfigured to bring them into compliance. As a tax consultant, my role is clear: listen to their concerns, help them understand the new rule, and, where appropriate, possibly relay to the tax authorities the practical challenges and realities that businesses and taxpayers encounter in implementing this change.
On Oct. 6, the BIR issued Revenue Regulations (RR) No. 6-2026, introducing a new invoice requirement. Under this regulation, the amount of creditable withholding tax, if applicable, must appear as a separate line item on every invoice. This requirement applies across industries and affects both manual and system-generated invoices.
As we examine the intent of the RR, the regulation offers a practical benefit to taxpayers. By incorporating withholding tax information directly into invoices, taxpayers gain a more complete record of each transaction. This shows how much cash is yet to be received upon collecting payments from customers. Thus, invoices become more comprehensive sources of tax information rather than mere proof of transaction.
With this change, sellers are expected to properly align the recognition of the corresponding creditable withholding tax (CWT), if applicable, at the point when the customer’s receivable is set up as when they record the sales or revenue on the books. This should also support proper monitoring, allowing the seller to clearly identify which customers they need to secure the CWT certificates (BIR Form 2307) in time for the preparation of the annual income tax return (AITR).
Normally, during tax audits, the mismatches surface between the total CWT claimed against the reported sales or revenue in the AITR. The issue usually arises when the BIR grosses up the total CWT claimed and derives a higher amount of sales or revenue in the tax return. Such a difference is treated as an alleged underdeclared sale or revenue forming part of both income tax and value-added tax deficiencies.
Although such a finding is not conclusive, the usual cause of this discrepancy is the taxpayer’s practice of claiming the CWTs only upon receipt of payment, rather than recognizing them in the period when the sales transaction occurred.
With the full implementation of RR 6-2026, we expect that this typical finding will be significantly reduced in future tax audits.
RR 6-2026 took effect on Oct.16, merely 15 days after its publication on the BIR website on Oct. 1. This afforded taxpayers a very limited period within which to implement the new requirement. I believe this reflects the common sentiment among taxpayers, including my clients. The proposed addition to the invoicing requirements is too abrupt. With only a two-week transition period, taxpayers are confronted with the practical question of how they can realistically adapt to the new invoicing requirement, especially for those taxpayers whose invoices are generated through Computerized Accounting Systems (CAS) and using Point-of-Sales (PoS) machines.
I understand that RR 6-2026 provides a transitory rule for those taxpayers using manual invoices. Accordingly, all unused or unissued invoices may continue to be used until fully consumed, provided that the phrase “Less: Withholding Tax” is conspicuously stamped on the face of each invoice. Thereafter, all newly printed invoices must include the same phrase before they are used.
However, RR 6-2026 does not address taxpayers that issue invoices via CAS/PoS, leaving the applicable transitory provision unclear. If immediate reconfiguration is not feasible, an important question to be addressed is, “Will the BIR allow CAS/PoS-users to temporarily comply by stamping the required phrase on their system-generated invoices?”
We note that in the previous implementation of the single-invoicing rules under the Ease of Paying Taxes law (Republic Act 11976), the BIR issued RR Nos. 7-2024 and 11-2024, which gave taxpayers using CAS reasonable time to enhance their systems. Further, during the transition, it was explicitly stated that the BIR temporarily allowed the conversion of the receipt to be invoiced by manually striking out “official receipt” and stamping the word “invoice” on the face of the document.
In my view, taxpayers using a CAS/PoS should also be granted a reasonable transition period to implement the system changes required under RR No. 6-2026. In reference to the previous RRs, the BIR should explicitly allow CAS/PoS users to adopt the same transitory provision given to taxpayers using manual invoices. Likewise, it is hoped that this relief will extend to taxpayers whose invoices are printed under the loose-leaf system. Similarly, these taxpayers face the usual operational constraint that they need to fully consume existing stocks and update their invoice format in accordance with the requirements.
Although the penalties for noncompliance may be administrative in nature, every business should still take the necessary steps to comply with the new rule.
Moreover, the BIR should consider measures that will help every taxpayer in the implementation of these new invoicing requirements with ease and in a manner consistent with the principle of administrative feasibility, and that any new BIR requirement must be reasonable, practical, and not unduly burdensome for taxpayers across the entire ecosystem.
Richard Ibarra is a director for the Tax Advisory & Compliance practice area at P&A Grant Thornton.