Pursuant to Revenue Memorandum Circular (RMC) No. 55-2019 of the Bureau of Internal Revenue issued last May 21, 2019, hereby clarifies the business style to be indicated on the official receipts and invoices.
What is “Business Style?”
“The phrase “Business Style” refers to the business name registered with the concerned regulatory body used by the taxpayer other than its registered name or company name.”
Hence, neither the nature of business nor line of business” is to be indicated on the avoided blank line beside the words “Bus. Style” on those receipts or invoices.
For a clearer explanation, let us look on the examples provided by BIR on their RMC.
- A corporation is registered under the corporate name of XYZ Entertainment Corporation. Based on its Certificate of Registration issued by the Securities and Exchange Commission (SEC), the Corporation is operating under the business name of “Bozo the Clown.” In this case, the business style is the business name which is “Bozo the Clown.”
- A single proprietor named Juanita M. Ricafrente registered a business name with the Department of Trade and Industry (DTI). Reflected in her DRI Certificate of Registration is the business name of “JMR Trading.” Hence, the business style is “JMR Trading”.
For visual illustration, you may refer to the image below:
What are the invoicing requirements and is it necessary to indicate the business style on the receipts or invoices?
The invoicing requirements as laid out in Section 113B of the National Internal Revenue Code is presented below;
“(B) Information Contained in the VAT Invoice or VAT Official Receipt. – The following information shall be
- A statement that the seller is a VAT-registered person, followed by his Taxpayer’s Identification Number (TIN); and
- The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax. Provided, That:
- The amount of the tax shall be known as a separate item in the invoice or receipt;
- If the sale is exempt from value-added tax, the term “VAT-exempt sale: shall be written or printed prominently on the invoice or receipt;
- If the sale is subject to zero percent (0%) value-added tax, the term “zero-rated sale” shall be written or printed prominently on the invoice or receipt.
- If the sale involved goods, properties or services some of which are subject to and some of which are VAT zero-rated or Vat exempt, the invoice or receipt shall clearly indicate the break-down of the sale price between its taxable, exempt and zero-rated components, and the calculation of the value-added tax on each portion of the sale shall be known on the invoice or receipt: Provided, That the seller may issue separate invoices or receipts for the taxable, exempt, and zero-rated components of the sale.
- The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and
- In the case of sales in the amount of One thousand pesos (P1,000) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and Taxpayer Identification Number (TIN) of the purchaser, customer or client.”
As emphasized in Sec 113B 4, the business style must be present on the receipts or invoices.
What is it to me if I do not comply with this RMC?
Let us bear in mind that an erroneously filled out and issued receipt or invoice may result to imposition of penalties from the BIR. Vice versa, it may also be a reason on the disallowance of claimed expenses for improperly filled out receipts or invoice from suppliers. It may also affect your VAT input tax claimed as tax credit against VAT output tax or the amount of your VAT refund to be claimed to BIR.
It may be absurd and there may be no need for these information to be provided in the receipts or invoices but it is still the rule that we must comply. However may these serve as a reminder to “Mind your style especially your Business style”.
