All income earners, except for purely compensation income earners, are mandated to issue a receipt or invoice for every sale of services or products. The BIR even require all businesses to post visibly in their establishments the “ASK FOR RECEIPT” signage. The purpose of the signage is to ensure all buyers are aware of their right to ask for receipt or invoice, and that the tax on the said sale is properly declared and remitted to the BIR. As a buyer of a services or goods, the benefit of asking for a BIR registered receipt or invoice is to ensure that the payment you’ve made is valid and supported with documents for accounting and tax purposes.
However, despite the importance of issuing a receipt or invoice, many businesses are still penalized for non-issuance. Some may not be issuing intentionally, but for many, its lack of awareness and knowledge of the business owner and/or his staff on how to write a receipt or invoice.
Personally, I always exercise my right to ask for a BIR registered receipt or invoice whenever I purchase from a business establishment, such as for gasoline, transportation, grocery, supplies, rent, etc. I do this so I can record and support my payments with valid documents. There are times I even ask for a BIR registered manual receipt or invoice. I do this when either the receipt or invoice issued was printed on a thermal paper (which fades over time), or the business don’t have cash register machine or POS yet the cashier don’t issue a receipt or invoice unless you ask for it.
In my experience, when I ask for a manual receipt or invoice, some cashier don’t know what it is, while some don’t know how to write on it properly. With such experience, I’m creating this article to serve as a guide for business owners or non-accountants for better understanding of an official receipt.
What is an Official Receipt?
An official receipt, in general, is a document supporting sale of service. It is issued upon collection of payment from customer.
When do you issue an official receipt?
An official receipt is issued to a customer upon cash collection of service fee or service billing, for service rendered.
Types of Manual Official Receipt
Depending on your preference and budget, there are different types of manual official receipt booklets which you can register with the BIR, such as the following:
- With Carbon or Carbon-less
If you prefer official receipt with carbon, this is more expensive than the carbonless, and you need to use a cardboard to prevent the details be copied in the next series.
On the other hand, if you prefer a carbonless official receipt, this is cheaper type but you need a carbon paper to copy the details in the duplicate or triplicate copy.
- Duplicate or Triplicate Copy
The official receipt may either be duplicate or triplicate copy. For duplicate copy, one white copy goes to the customer, while the second copy remains in the booklet for safekeeping and recording. For triplicate copy, the white copy goes to the customer, while the second copy goes to accounting for recording and safekeeping. The third copy may go to another department aside from accounting.
Who writes the official receipt?
The official receipt is issued by the cashier or any person holding the company’s cash or collection.
Where to keep the issued official receipt?
The official receipt is placed and issued in the business premise and usually safeguarded by the cashier.
The accountant or bookkeeper may also be the keeper of the issued or used official receipt since they use it as evidence and basis of recording.
It is advisable to keep copies of written out official receipt for a period of at least 10 years. This is in case of future audit.
Also for unused official receipt refrain from disposing it because you need to surrender it to BIR especially upon closure of business.
Penalty for Failure or Refusal to Issue Receipts
Please note that the amount of penalty written in this article is based on the penalties as of the date of writing. For updates, refer to BIR official website.
Criminal Penalty: Fine of not less than P 1,000 but not more than P 50,000 and imprisonment of not less than four (4) years
- For failure to issue receipts – First offence is P 10,000, Second offence is P 20,000. Subsequent violations shall not be subject to compromise.
- For refusal to issue receipts – First offence is P 25,000, Second offence is P 50,000. Subsequent violations shall not be subject to compromise.
I hope this article has been helpful for you to have a better understanding on the basics of an official receipt. In our next article, we will make a detailed instruction on how to properly fill-up a non-vat official receipt.
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