BIR Electronic Invoicing Rules Under RMC No. 98-2026: What Philippine Businesses Need to Know Before December 31, 2026
Executive Summary
The Bureau of Internal Revenue has issued Revenue Memorandum Circular No. 98-2026, which sets the policies and guidelines for electronic invoicing under Section 237 of the Tax Code and related revenue regulations.
For covered taxpayers, the most important deadline is December 31, 2026. By then, covered taxpayers except Micro Taxpayers—must be able to issue electronic invoices that comply with the BIR’s technical and documentary requirements.
The Circular also makes an important distinction: not every invoice created or sent digitally is automatically a valid electronic invoice. The invoice must be generated through a duly registered, approved, or accredited system, transmitted electronically to the buyer, and capable of electronic extraction and processing for BIR reporting purposes.
Businesses using computerized accounting systems, POS systems, e-commerce platforms, or other invoicing software should therefore review their current systems well before the deadline.
Step-by-Step Guide: How to Comply With RMC No. 98-2026
1. Determine Whether Your Business Is Covered
RMC No. 98-2026 applies to several categories of taxpayers.
These include Small, Medium, and Large Taxpayers engaged in e-commerce or internet transactions; taxpayers under the Large Taxpayers Service; taxpayers classified as Large Taxpayers under the Ease of Paying Taxes framework; taxpayers using a Computerized Accounting System or Computerized Books of Accounts with electronic invoicing; and other taxpayers that may later be required by the Commissioner. Micro Taxpayers are excluded from the mandatory requirement stated in the Circular.
Covered taxpayers must comply with the electronic invoicing requirements on or before December 31, 2026.
2. Check Whether Your Current Invoice Is Really an Electronic Invoice
One of the most important clarifications in the Circular is that a digital file is not necessarily an electronic invoice.
To qualify, the invoice must:'
be generated through a duly registered, approved, or accredited accounting or invoicing system in a structured electronic format;
be electronically generated and transmitted to the buyer through channels such as email, online viewing, QR code, mobile application, or web-based platform; and
contain data capable of being electronically extracted, processed, and transmitted for BIR electronic sales reporting.
This means the compliance test is not simply whether the invoice is sent as a PDF or by email.
3. Do Not Rely on Word, Excel, or Google Docs as an “E-Invoice System”
The BIR expressly states that invoices manually created using applications such as Microsoft Word, Microsoft Excel, Google Docs, Google Sheets, or similar office applications are not valid electronic invoices for tax compliance purposes.
This is especially relevant for smaller businesses that currently prepare invoices manually and simply send them electronically.
Electronic delivery alone is not enough.
4. Review Your CAS, POS, or Accounting Software
A system-generated invoice may still fail to qualify as an electronic invoice.
If a CAS, POS system, CBA with Accounting Records, or other invoicing software generates an invoice but cannot electronically issue or transmit the invoice to the buyer and cannot support electronic transmission or reporting of the required sales data to the BIR, the invoice is treated as a system-generated non-electronic invoice.
Businesses should therefore ask their accounting or software providers whether their current systems can satisfy the actual technical requirements under the Circular.
5. Secure a Permit to Issue Electronic Invoice
Covered taxpayers must obtain a Permit to Issue Electronic Invoice, or PTI Electronic Invoice, before generating or issuing compliant electronic invoices.
The Circular makes clear that a PTI Electronic Invoice is different from a Permit to Use or Acknowledgement Certificate for a Computerized Accounting System. Having an approved CAS does not, by itself, authorize the taxpayer to issue electronic invoices.
The PTI application must be filed with the taxpayer’s Revenue District Office or Large Taxpayer Office and supported by the required documents. The BIR is to evaluate a complete application within 20 working days.
6. Obtain EIS Certification
After receiving the PTI Electronic Invoice, the taxpayer must also obtain an Electronic Invoicing and Sales Reporting Certification.
The certification validates whether the taxpayer’s system can electronically extract, process, and transmit sales data according to BIR technical standards.
The Circular requires taxpayers to secure EIS Certification within six months from the issuance of the PTI Electronic Invoice. Failure to do so may result in revocation of the PTI.
7. Prepare a Downtime Procedure
Electronic invoicing does not eliminate the need for a backup process.
If electronic invoicing cannot be used because of system downtime, internet connectivity problems, technical malfunction, power interruption, cybersecurity incidents, force majeure, or similar circumstances, the taxpayer must issue a BIR-authorized manual invoice.
Once the system is restored, the manually issued invoice must be replaced with a corresponding electronic invoice that refers to the manual invoice number.
Businesses should therefore maintain authorized manual invoices even after adopting electronic invoicing.
Risks and Compliance Issues
Failure to Transition Before the Deadline
Covered taxpayers that wait until late 2026 may face difficulties obtaining system approvals, completing testing, updating branches, training staff, or obtaining the required PTI and EIS Certification.
Electronic invoicing is not merely a software installation. It involves regulatory approval, technical readiness, and business-process changes.
Using an Invalid “Electronic” Invoice
An invoice may look digital but still fail the BIR’s definition.
Businesses that rely on manually prepared PDFs, Word documents, spreadsheets, or systems without proper transmission capability risk treating non-compliant invoices as electronic invoices.
Failure to Secure the Correct Permit
A common compliance mistake may be assuming that an existing CAS approval is sufficient.
The Circular expressly separates the PTI Electronic Invoice from the PTU or Acknowledgement Certificate for CAS.
Improper Correction of Issued Electronic Invoices
Issued electronic invoices should not simply be deleted, altered, or modified.
If an adjustment decreases the invoiced amount, the Circular requires an authorized Credit Note or Memo. If the amount increases, a new electronic invoice must be issued.
That rule is important for businesses accustomed to editing invoices directly in their accounting systems after issuance.
Practical Examples
Example 1: E-Commerce Seller Using Excel Invoices
An online business creates invoices in Excel, saves them as PDFs, and emails them to customers.
Although the invoices are delivered electronically, they do not qualify as electronic invoices under RMC No. 98-2026 because manually created invoices using office productivity applications are expressly excluded.
The business would need to transition to a compliant registered or approved invoicing system.
Example 2: Company With an Existing CAS
A corporation already has a registered computerized accounting system that generates invoices.
Management assumes that the existing CAS approval automatically allows it to issue electronic invoices.
Under RMC No. 98-2026, that assumption is incorrect. The company must still obtain the specific PTI Electronic Invoice required by the Circular.
Example 3: Company With Several Branches
A taxpayer has a head office and multiple branches.
Where the taxpayer is covered by the electronic invoicing rules, the requirement generally applies to the taxpayer as a whole, including the head office and all registered branches.
The PTI structure must also reflect the branches and invoicing systems being used.
Where different branches use different software systems, separate PTIs may be necessary for each distinct invoicing system.
Frequently Asked Questions
When is the electronic invoicing deadline?
Covered taxpayers, except Micro Taxpayers, are required to comply on or before December 31, 2026.
Are all online sellers required to use electronic invoices?
The Circular specifically covers Small, Medium, and Large Taxpayers engaged in e-commerce or internet transactions. Micro Taxpayers are exempted from the mandatory requirement stated in the Circular.
Is a PDF invoice considered an electronic invoice?
Not automatically.
The invoice must be generated in a structured electronic format by a compliant system, transmitted electronically, and capable of electronic data extraction and processing.
A manually prepared Word, Excel, Google Docs, or Google Sheets invoice does not qualify.
Can a taxpayer still give the customer a printed invoice?
Yes.
A compliant electronic invoice may still be printed and furnished to the customer for reference or record keeping, provided the original invoice was properly generated and capable of being issued electronically and all applicable requirements were met.
Can businesses voluntarily adopt electronic invoicing?
Yes.
Taxpayers not mandatorily covered by the December 31, 2026 requirement may voluntarily adopt electronic invoicing, provided they first secure a PTI Electronic Invoice from the appropriate Revenue District Office.
Is electronic invoicing the same as electronic sales reporting?
No.
RMC No. 98-2026 expressly states that the obligation to issue electronic invoices under Section 237 is separate from electronic sales reporting under Section 237-A. The latter will become mandatory for covered taxpayers only when the BIR issues the corresponding implementing policies, guidelines, and procedures.
Call-to-Action
Is Your Business Ready for Electronic Invoicing?
The December 31, 2026 deadline may appear distant, but system migration, permit applications, testing, branch implementation, and internal process changes can take time.
Businesses should begin by determining whether they are covered, reviewing their existing invoicing and accounting systems, identifying whether a PTI Electronic Invoice is required, and preparing for EIS Certification.
Aureada CPA Law Firm assists businesses with BIR registration and compliance, Computerized Accounting System requirements, electronic invoicing implementation, tax advisory, and regulatory review.
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