Who Is Required to Issue Electronic Invoices by December 31, 2026?

Executive Summary

The Philippines is moving toward broader electronic invoicing, but not every taxpayer is required to shift at the same time.

Under Revenue Regulations No. 26-2025 and the more detailed guidelines in BIR Revenue Memorandum Circular No. 98-2026, the December 31, 2026 deadline applies to several specific groups of taxpayers.

The first group includes Small, Medium, and Large taxpayers engaged in e-commerce or internet transactions; taxpayers under the Large Taxpayers Service; taxpayers classified as Large under the Ease of Paying Taxes Act; and taxpayers using certain computerized accounting, bookkeeping, or invoicing systems.

Micro taxpayers are generally exempt from the mandatory e-invoicing requirement under the current rules, although they may voluntarily adopt electronic invoicing.

The important question for businesses is therefore not simply, “Do we issue invoices?” 

It is:

“Does our taxpayer classification, business activity, or accounting system place us within the December 31, 2026 mandatory e-invoicing group?”

Step-by-Step Guide: Are You Required to Issue Electronic Invoices?

Step 1: Check If You Conduct E-Commerce or Internet Transactions

Small, Medium, and Large taxpayers engaged in e-commerce or internet transactions are required to comply with the electronic invoicing requirement by December 31, 2026.

Micro taxpayers are exempt from the mandatory requirement under the current framework.

E-commerce is broader than selling through a traditional online store.

BIR rules include activities such as sales through digital platforms, e-retailing, income-generating digital content, online professional or freelance services, on-demand services, and certain transport or delivery services arranged through websites or applications.

This means businesses operating through websites, marketplaces, apps, and other online channels should review their classification carefully.

Step 2: Determine Your BIR Taxpayer Classification

The Ease of Paying Taxes framework classifies business taxpayers based on gross annual sales:

Micro: below ₱3 million Small: ₱3 million to below ₱20 million Medium: ₱20 million to below ₱1 billion Large: ₱1 billion and above.

For e-commerce businesses, this classification is particularly important because the mandatory December 31, 2026 requirement applies to Small, Medium, and Large taxpayers, while Micro taxpayers are generally exempt.

A growing online business should therefore monitor whether its BIR classification has changed.

Step 3: Check Whether You Are Under the Large Taxpayers Service

Taxpayers under the jurisdiction of the Large Taxpayers Service (LTS) are part of the mandatory electronic invoicing group.

This applies regardless of whether the taxpayer primarily operates through traditional or online channels.

The BIR has maintained the December 31, 2026 deadline for taxpayers under the LTS.

Step 4: Check Whether You Are Classified as a Large Taxpayer

Businesses classified as Large Taxpayers under Republic Act No. 11976 and RR No. 8-2024 must also comply.

Under RR No. 8-2024, a Large Taxpayer generally means a business taxpayer with annual gross sales of ₱1 billion or more.

This category is separate from being administratively under the Large Taxpayers Service, so businesses should not assume that they are outside the rule merely because their RDO is not part of the LTS.

Step 5: Review Your Accounting and Invoicing System

Businesses using certain computerized systems may also fall within the mandatory group.

RR No. 26-2025 covers taxpayers using:

Computerized Accounting Systems (CAS), Computerized Books of Accounts (CBA) with Accounting Records and electronic invoicing, and other invoicing software. 

This is an important area for review because many businesses already use accounting software but may not realize that their existing system must satisfy the new electronic invoicing requirements.

A system that merely prints an invoice does not necessarily produce a compliant electronic invoice.

Under RMC No. 98-2026, a valid e-invoice must be generated in a structured electronic format, electronically issuable to the buyer, and capable of having its data electronically extracted and processed.

Step 6: Do Not Assume a PDF Automatically Qualifies

One common misunderstanding is that emailing a PDF invoice automatically means the business is already compliant with electronic invoicing.

That is not necessarily correct.

The invoice must originate from a compliant accounting or invoicing system and contain structured invoice data capable of electronic extraction and processing.

A manually prepared invoice created in Word, Excel, Google Docs, or a similar productivity application does not become a compliant e-invoice simply because it is converted into PDF and emailed to the customer.

Step 7: Prepare for the Required BIR Authorization

Businesses within the mandatory group should not simply activate an e-invoicing feature and begin issuing invoices.

RMC No. 98-2026 requires covered taxpayers to obtain a Permit to Issue (PTI) Electronic Invoice before electronic invoice issuance.

After the PTI is issued, the taxpayer must also complete the required EIS Certification within six months.

This makes advance preparation important. December 31, 2026 should be treated as the compliance deadline not the date to begin reviewing the system.

Who Is Not Automatically Required by December 31, 2026?

The rules also identify other taxpayer groups that may eventually become subject to broader electronic invoicing requirements as BIR systems and implementing rules develop.

RR No. 26-2025 refers to exporters, certain Registered Business Enterprises enjoying tax incentives, taxpayers using POS systems, and other taxpayers that may later be required by the Commissioner. Separate implementation may apply to these groups.

Therefore, a taxpayer should not assume that being an exporter, RBE, or POS user alone necessarily places it in the current December 31 group.

However, the taxpayer may still be covered if it independently falls within another mandatory category for example, because it is a Large Taxpayer or uses a covered computerized invoicing system.

Electronic Invoicing Is Different From Electronic Sales Reporting

This distinction is very important.

Electronic invoicing concerns generating and issuing the invoice electronically.

Electronic sales reporting concerns transmitting the required invoice or sales data to the BIR.

The current December 31, 2026 requirement focuses on electronic invoice issuance for covered taxpayers.

RMC No. 98-2026 treats electronic sales reporting as a separate obligation that will apply according to the BIR's implementing policies, guidelines, and procedures.

Businesses should therefore avoid assuming that every e-invoice must already be transmitted to the BIR in real time solely because electronic invoicing is mandatory.

Risks and Penalties

Failure to prepare for mandatory electronic invoicing can create several problems.

A covered taxpayer may reach the deadline with an accounting system that cannot generate compliant structured invoices, without the required PTI, or without properly configured branch invoicing.

There may also be tax consequences if a taxpayer required to issue compliant invoices instead issues documents that fail the applicable invoicing requirements.

The Tax Code imposes penalties for failure or refusal to issue required invoices and for certain invoice violations. The specific exposure will depend on the particular non-compliance involved.

The more practical risk is operational: businesses that wait too long may need to reconfigure accounting software, coordinate with vendors, review branch systems, test invoice data, and obtain BIR authorization within a limited period.

Practical Examples

Example 1: Online Retailer With ₱10 Million in Annual Sales

An online retailer earns ₱10 million in gross sales.

Under the EOPT classification thresholds, it falls within the Small Taxpayer category.

Because it conducts e-commerce transactions and is not a Micro Taxpayer, it falls within the group required to comply with electronic invoicing by December 31, 2026.

Example 2: Small Online Seller With ₱2 Million in Sales

A sole proprietor sells products online and has annual gross sales below ₱3 million.

The taxpayer generally falls within the Micro Taxpayer category and is exempt from the mandatory e-invoicing requirement under the present framework.

The taxpayer may nevertheless voluntarily adopt electronic invoicing.

Example 3: Traditional Business Using a Computerized Invoicing System

A company does not sell online but uses a computerized accounting and invoicing system covered by the BIR rules.

It should not assume that the requirement applies only to e-commerce companies.

Taxpayers using covered CAS, CBA, or other invoicing software are included in the mandatory group under the current regulations.

Example 4: Large Corporation

A corporation has annual gross sales exceeding ₱1 billion.

It is classified as a Large Taxpayer under RR No. 8-2024 and therefore falls within the December 31, 2026 electronic invoicing mandate.

Frequently Asked Questions

What is the BIR electronic invoicing deadline?

For the covered taxpayer groups discussed above, the current deadline is December 31, 2026.

Are all online sellers required to issue electronic invoices?

Not all.

Small, Medium, and Large taxpayers engaged in e-commerce or internet transactions are covered. Micro taxpayers are generally exempt from mandatory electronic invoicing under the current rules.

Are Micro Taxpayers completely prohibited from issuing e-invoices?

No.

Micro taxpayers may voluntarily use electronic invoices even though they are generally exempt from the mandatory requirement.

Is my existing CAS automatically compliant?

Not necessarily.

A CAS may need to be reviewed or reconfigured to meet the structured-data, electronic issuance, authorization, and other requirements under RMC No. 98-2026.

Do I need a PTI before issuing electronic invoices?

For covered taxpayers implementing electronic invoicing under RMC No. 98-2026, a Permit to Issue Electronic Invoice is required before issuance.

Do I already have to electronically transmit every invoice to the BIR?

Electronic invoicing and electronic sales reporting are separate requirements.

The current December 31 implementation focuses on issuance of electronic invoices, while electronic sales reporting will follow the applicable BIR implementing rules.

Call-to-Action

Is Your Business Covered by the December 31, 2026 E-Invoicing Deadline?

Determining coverage should be the first step in electronic invoicing readiness.

Businesses should review their taxpayer classification, e-commerce activities, BIR jurisdiction, accounting software, invoicing system, branches, and existing BIR registrations before investing in system changes.

Aureada CPA Law Firm assists businesses with the legal and tax aspects of BIR electronic invoicing compliance, CAS and invoicing-system reviews, PTI requirements, regulatory analysis, and implementation readiness.