Corporate - Significant developments

Last reviewed - 25 January 2023

Reduced frequency of VAT filings

Starting 1 January 2023, taxpayers will only be required to file four (4) quarterly Value-Added Tax (VAT) returns instead of twelve (12) filings per taxable year. 

Mandatory e-Invoicing Requirements

Under the TRAIN Law, the following taxpayers are mandated to issue electronic receipts or sales/commercial invoices no later than 1 January 2023:

  • Taxpayers engaged in the export of goods and services;
  • Taxpayers engaged in commerce (e-commerce); and
  • Taxpayers under the Large Taxpayers Service (LTS).

Moreover, except for the taxpayers engaged in e-commerce, the sales data of the above-mentioned taxpayers shall be transmitted or reported to the Bureau of Internal Revenue (BIR) electronically through the use of the Sales Data Transmission System (SDS) developed by the taxpayer. This SDS shall be certified by the BIR. On the other hand, the BIR established an Electronic Invoicing/Receipting System (EIS) capable of storing and processing the data to be transmitted using the SDS. This EIS shall only be accessed by authorized taxpayers. 

The purpose of this new development is to address the concerns in relation to substantiation of sales and purchases and to ease compliance with the BIR.

Taxpayers who are not covered by the mandate, but have been authorized by the BIR to issue electronic SIs/ORs through the web-based facility of the EIS, may issue electronic receipts or sales/commercial invoices in lieu of manual receipts/invoices.

To date, however, the BIR has yet to roll out full implementation as it is still currently running a pilot program which includes 100 taxpayers it has notified. The effective date for full implementation is still pending. 

The Vaporized Nicotine and Non-nicotine Products (VNNP) Regulation Act

On 25 July 2022, Republic Act No. 11900 or the “Vape Law” lapsed into law, which regulates the importation, manufacturing, sale, distribution and use of vaping products such as heated tobacco products (HTPs) and e-cigarettes. It is regarded as the first comprehensive law that will regulate heated tobacco products and e-cigarettes, providing smokers with a less harmful option that is expected to significantly lower smoking rates across the country.

The Vape Law covers the following provisions, among others:

  • Tax rates and bases for excise taxes on vapor products
  • Inspection fees
  • Registration as Manufacturer or Importer and Sworn Statement
  • Bond schedule for taxpayers availing of  tax prepayment, advance deposit, or similar schemes
  • Application For An Electronic Authority To Release Imported Goods (eATRIG) Before Release From Customs Custody
  • Sale or distribution of vapor products through e-commerce