BIR Issuances – RR 12-2023

The BIR implements Section 237 of the National Internal Revenue Code of 1997, as Amended, on the issuance of receipts or sales or commercial invoices by Agricultural Producers.

 

Revenue Regulations (RR) No. 12-2023

2 October 2023

 

Effectivity Date: The Circular takes effect immediately from date of its publication of its publication in the newspaper of general circulation or Official Gazette

Published: Malaya Business Insights on 4 October 2023

The following are the salient provisions of the RR:

EXEMPTION FROM ISSUANCE OF RECEIPTS OR INVOICES:

SECTION 4. Exemption from Issuance of Receipts or Invoices. — For ease of doing business, the Commissioner, hereby exempts Agricultural Producers from the issuance of principal and supplementary receipts or invoices on their sale of Agricultural Food Products, provided, that the gross sales/receipts for the year shall not exceed One Million Pesos (P1,000,000.00). Provided, further, however, that Agricultural Producers shall record each sale transaction in a simplified sales book containing the following information:

1. date of transaction;
2. description of goods sold or services rendered;
3. registered name, registered address, and Taxpayer Identification Number (TIN) of the purchaser if engaged in business;
4. amount of sales;
5. amount of tax withheld, if any; and
6. the net amount received.

Provided, finally, if the annual gross sales/receipts exceed One Million Pesos (P1,000,000.00) at any time during the taxable year, the Agricultural Producer shall be required to issue official receipts/sales invoices for every subsequent transaction valued at P100.00 or more.

For this purpose, the Agricultural Producer, for the first year of business operations or one year from registration, shall be allowed to purchase and use BIR-printed receipts or BIR-printed invoices from the Revenue District Office (RDO) where they will register pursuant to Section 6 of these Regulations. The Agricultural Producer shall thereafter be required to issue official receipts/sales invoices printed pursuant to an Authority to Print (ATP).

The Agricultural Producer shall still be exempt from the issuance of receipt or invoice even if he or she derives income from the sale of goods or services other than Agricultural Food Products as described in these Regulations, provided that, the annual aggregate gross sales/receipts shall not exceed One Million Pesos (P1,000,000.00). Provided further, the primary activity of the Agricultural Producer shall be the sale of Agricultural Food Products and that the amount of sales from other goods or services shall not exceed thirty percent (30%) of the aggregate sales or receipts of the Agricultural Producer for a given taxable year.

SUBSTITUTED RECEIPT OR INVOICE:

SECTION 5. Substituted Receipt or Invoice. — The buyer or purchaser who is engaged in trade or business shall issue a Certificate of Income Payment Not Subject to Withholding Tax (BIR Form No. 2304) or Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) for each purchase transaction, in accordance with Section 9 of these Regulations, to the Agricultural Producer in two (2) copies indicating the transaction date, registered name, address, TIN of the payor (buyer) and payee (seller).

The issued BIR Form No. 2304 or 2307 shall be constituted and treated as the substituted official receipt/sales invoice for purposes of these Regulations. This shall likewise serve as evidence of purchases made to substantiate claims for deductible expenses of the buyer or purchaser engaged in trade or business for tax purposes.

REGISTRATION REQUIREMENTS:

SECTION 6. Registration Requirements. — Agricultural Producers shall register once with the Bureau of Internal Revenue (BIR) pursuant to Section 236 of the Tax Code, as amended. In addition, the Simplified Sales Book to be used by the Agricultural Producers shall likewise be registered with the BIR within the prescribed period to register as indicated in Revenue Memorandum Circular (RMC) No. 29-2019 and RMC No. 3-2023, as may be applicable.  

BOOKKEEPING REQUIREMENTS FOR AGRICULTURAL PRODUCERS:

SECTION 7. Bookkeeping Requirements for Agricultural Producers. — Pursuant to Section 232 of the Tax Code, as amended, Agricultural Producers shall record the details of the transactions in a Simplified Sales Book in accordance with Section 4 of these Regulations. A simple logbook or notebook can be used as a Simplified Sales Book.

All Simplified Sales Books shall be kept and preserved by the Agricultural Producer for a period of ten (10) years reckoned from the day following the deadline in filing a return, or if the return is filed after the deadline, from the day from the date of the filing of the return, for the taxable year when the last entry was made in the books of accounts. Provided that, within the first five (5) years reckoned from the day following the deadline in filing a return, or if filed after the deadline, from the date of the filing of the return, for the taxable year when the last entry was made in the books of accounts, the taxpayer shall retain hardcopies of the books of accounts, including subsidiary books and other accounting records. Thereafter, the taxpayer may retain only an electronic copy of the hardcopy (paper) of the books of accounts, subsidiary books and other accounting records in an electronic storage system which complies with the requirements set forth under Section 2-A of RR No. 5-2014.

FILING AND PAYMENT:

SECTION 8. Filing and Payment. — Agricultural Producers shall file Quarterly and Annual Income Tax Return and pay income tax due, if any, on the prescribed deadline. Any taxes withheld by the buyer or purchaser as supported by a BIR Form No. 2307 can be used as tax credit by the Agricultural Producer.

CREDITABLE WITHHOLDING TAX:

SECTION 9. Creditable Withholding Tax. — Income payments made by buyers or purchasers engaged in trade or business to Agricultural Producers not exceeding the cumulative amount of Three Hundred Thousand Pesos (P300,000.00) within the same taxable year shall be exempt from withholding tax. In this case, the buyer or purchaser engaged in trade or business is required to issue BIR Form No. 2304 to Agricultural Producers per purchase transaction.

Income payments made to Agricultural Producers which will exceed the cumulative amount of Three Hundred Thousand Pesos (P300,000.00) within the same taxable year, shall be subject to withholding tax at a rate of One Percent (1%). In this case, the buyer or purchaser engaged in trade or business shall issue a BIR Form No. 2307 to Agricultural Producers pursuant to pertinent existing revenue issuances.

The buyer or purchaser engaged in trade or business shall file Quarterly Remittance Return of Creditable Income Taxes Withheld (Expanded) [BIR Form No. 1601-EQ] together with the Quarterly Alphabetical List of Payees (QAP), whether actually subjected to or exempted from withholding tax in accordance with RR No. 11-2018.

A copy of the RR can be accessed thru this link (Revenue Regulations No. 12-2023)