REVENUE REGULATIONS NO. 11-2004 issued on December 21, 2004 prescribes the rules and regulations on the accreditation, registration and use of Cash Register Machines (CRM), Point-of-Sale (POS) Machines and/or Business Machines Generating Receipts/Invoices. Only those CRMs/POSs that are found to be compliant with the machine specifications stated in Section 5.0 of the Regulations and have been duly registered shall be issued “Permits to Use”, and shall be utilized to generate invoices/receipts required. All duly existing Permits to Use CRMs/POSs issued prior to the effectivity of the Regulations shall remain valid until revoked by the Commissioner of Internal Revenue (CIR); Provided, That the establishments making use of such machines shall comply with the reportorial requirements to be prescribed in a separate Revenue Regulations. CRM/POS machines may be used immediately by business establishments without the need for prior inspection and authorization by the BIR provided that the following conditions are met: (a) The machine/system model is among those already accredited by the Bureau following the accreditation system described under Section 7.0 of the Regulations. (b) The supplier of the machine model has already registered the machine with the Bureau on behalf of the user-business firm, in accordance with the registration procedure described under Section 9.0 of the Regulations. (c) If the concerned machine/system model has not been previously accredited, but it is nonetheless fully compliant with the specifications of machines/systems as provided for under Sections 5.0 and 6.0 of the Regulations, the manager/owner of the business establishment may himself register the machine/system, in accordance with the provisions of Section 9.0 hereof. The manager/owner shall then be issued a provisional authority to use the machines/system. (d) The Bureau reserves the right to inspect any machine/system registered under these Regulations at any time during store hours to verify compliance with the specifications of a valid machine/system, the data requirements of the generated invoice, the conditions for use of machines, as well as other regulations that may be subsequently issued governing use of machines. Store personnel are thus required, under the authority granted for the use of the machine/system, to present the machine for inspection and reading by the concerned revenue personnel. (e) Any machine availing of the “immediate use” provisions of this Section that shall later be found to be non-compliant following inspection may be considered subject to seizure. To qualify for accreditation, registration and use, CRMs/POSs and similar business machines must comply with the specifications enumerated below to which compliance the machine manufacturer/dealer/distributor/vendor must attest through a sworn statement: (a) The machine must have a non-resettable accumulating grand total. The accumulating grand total sales must have at least 10 digits (12 including decimal points). The taxpayer must secure advance approval of the next accumulating grand total from the concerned Revenue District Office (RDO) within 30 days before full consumption or utilization of the previously reported accumulating grand total. A CRM must be equipped with a reset counter that advances by one (1) every time the accumulating grand total sales is reset to zero. POS machines and other types of similar machines must be capable of generating a unique sequential number for each transaction entered. (b) The machine must be tamper free. It must not be switchable to “training mode” or to “no-sale transaction mode” or other manipulations that will avoid the recording of a sale transaction. Further, the words “THIS IS NOT AN OFFICIAL RECEIPT” must be boldly printed on the paper tapes dispensed by the machine. (c) The machine and/or the central server must be able to generate a report showing the reading of daily sales and the accumulated grand total recorded therein. (d) The machine must have a non-volatile memory or must be equipped with a recovery/back-up system. (e) The machine must reflect and/or store information such as sales discounts, refunds etc. (f) The machine must be capable of clearly indicating separately, in words, sales of taxable (VAT) and non-taxable (NON-VAT) items, in cases where the machine user is engaged in both taxable and non-taxable business activities. Moreover, the machine must be capable of generating a report summarizing all VAT sales and a separate report summarizing Non-VAT sales to facilitate the review of each type of sales transactions. For CRMs, the machine must be equipped with 2 rollers or its equivalent, one for the audit journal tape intended for audit and internal revenue tax purposes and the other for the customers’ tape copies, which are issued as itemized and consecutively numbered receipts; Provided, that all tape receipts issued and the data printed on the receipts are of a quality that could be preserved for a period within which the CIR is authorized to make an assessment and collection of the taxes. Moreover, a safety mechanism must be installed that will prevent the operation of the machine if only one of the rollers is used. When the machine is punched for the purpose of recording sales discounts, refunds, etc. the amount of sales discounts, refunds, etc. should automatically be printed on the customer’s tape receipt and on the audit journal tape or its equivalent. For POS machines that are connected to a server, all sales per POS must be automatically and completely recorded in the central server, where the stored data shall be preserved for a period within which the CIR is authorized to make an assessment and collection of the taxes. No machine model shall be accredited unless the distributor/dealer/vendor of the machine shall attest that the BIR can view, validate and verify from the machine the sales/receipts summaries that will be submitted by the taxpayer pursuant to Section 6.0 of these Regulations. Monitoring controls and verification techniques must be disclosed by the distributor/dealer/vendor to the BIR so that it can identify, among others, voided sales and actual sales not recorded in the proprietor’s accounting records. The sales machines shall generate receipts or invoices, which must show among others the following data: (a) Business Name (b) Registered Taxpayer’s Name with BIR (c) Taxpayer’s Identification Number (12 digits including Branch Code) (d) Address where the machine will be used (e) Receipt/Invoice Number (Minimum of 6 digits) (f) Machine Model Accreditation Number (g) Date of Transaction (h) Quantity (i) Product Description (j) Amount of Transaction (Separate totals for VAT and Non-VAT transactions) (k) “THIS SERVES AS AN OFFICIAL RECEIPT” Businesses authorized to use CRM or POS machines are exempted from showing on the CRM/POS receipt the name, business style, address and Taxpayer Identification Number (TIN) of the purchaser. However, in case the purchaser is a VAT-registered entity and the concerned CRM/POS is not capable of showing the name, address and TIN of purchaser, a manually pre-printed and pre-numbered sales invoice or official receipt with approved Authority to Print (ATP) must be requested by the purchaser and must be issued by the seller. Otherwise, the purchaser’s claim for input tax will be disallowed. In case of the issuance of manual receipts, the CRM/POS-generated receipt should be attached to the duplicate manual receipt to avoid a double take-up of sales. Prior to the actual distribution/sale of CRM/POS machines, every supplier/distributor/dealer/vendor of the machines must apply for the accreditation of their machine models and/or software with the National Office CRM/POS Machine Accreditation Board (NMAB) (for supplier/distributor/dealer/vendor under the jurisdiction of Large Taxpayers Service) or Regional Office CRM/POS Machine Accreditation Board (RMAB) (for supplier/distributor/dealer/vendor under the jurisdiction of the Revenue District Offices). The accreditation to be granted is limited to the particular brand-model/software presented to the MAB for evaluation and approval. Any upgrading, integration or modification made in the machine shall be subject to prior approval. A manufacturer/dealer/vendor/distributor must register, on behalf of the buyer/user, the Cash Register/POS Machine to be sold/distributed not later than 5 days from the date of sale of the machine, and before it is actually used by the buyer/user. In registering the CRM/POS machine, the following information must be disclosed: (a) Taxpayer Identification Number (TIN) of the Buyer (12 Digits) (b) VAT or non-VAT number of the taxpayer-buyer (c) Serial number, brand and model of the machine sold (d) Present reading and date of reading All machine distributors/dealers/vendors shall submit electronically (via e-mail or Web) to the Large Taxpayers (LT) Audit Division I or II / LT District Office (for Large Taxpayers) or to the RDO concerned (for regular taxpayers), a Summary List of Machines Sold, within 15 days from the end of each taxable quarter. The Summary List will be reconciled with the BIR’s Registration Database. Any discrepancy thereof shall be subject to verification by the concerned Revenue District Officer. The use of the CRM/POS machines by the buyers/users shall be subject to the conditions specified in Section 10.0 of the Regulations. Any proprietor, owner or operator of a business establishment may use a cash register or POS machine of any type for “internal control purposes”; Provided that, duly registered sales invoices or receipts are issued for every sale. However, such proprietor, owner or operator shall first notify the machine distributor/ dealer/vendor of his intention to use the machine solely for “internal control” purposes. The machine distributor/dealer/vendor shall likewise inform the appropriate BIR office of such intention, and shall secure a poster from the said office, which shall be attached at the back of the machine conspicuous to the public, showing the following qualifier: “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 At no time shall the poster be detached or covered from public view. However, CRMs without a built-in receipt-dispensing mechanism or roller on which to mount the customers’ roll may be used for internal control purposes without complying with the foregoing requirements. A CRM with the built-in capacity to accumulate sales data of different lines of business may be authorized by the CIR to issue cash register receipts for all such different lines of business, Provided, however, that the distinction of sales by lines of business shall be clearly indicated on the machine paper tapes in words rather than in codes or symbols. All suppliers of CRM/POS machines are urged to immediately pull out of distribution/sale machines that do not comply with the provisions of the Regulations, and to warn buyers on the repercussion of using non-compliant machines.