For years, the Bureau of Internal Revenue (BIR) has been laying the groundwork for the Philippines' transition to electronic invoicing (e-invoicing), part of the government's broader push toward a more efficient, transparent and data-driven tax system. In practical terms, the shift moves invoicing into systems that issue and transmit invoices electronically and report sales data to the bureau in a prescribed digital format. What was once regarded as a future compliance requirement is now becoming an operational reality.

With the issuance of Revenue Memorandum Circular (RMC) No. 98-2026, the BIR has moved beyond policy development into active implementation. The circular lays out the governing guidelines and reiterates that covered taxpayers must be compliant by Dec. 31.

Who must comply

The RMC reiterates the following categories of covered taxpayers for e-invoicing compliance purposes:

• Taxpayers engaged in e-commerce or internet transactions, classified as Small, Medium and Large Taxpayers (Micro Taxpayers are exempt);
• Taxpayers under the jurisdiction of the Large Taxpayers Service;
• Taxpayers classified as Large Taxpayers under the Ease of Paying Taxes Act and Revenue Regulations (RR) No. 08-2024, meaning those whose gross sales for a taxable year amount to P1,000,000,000 and above;
• Taxpayers using a Computerized Accounting System or Computerized Books of Account with Accounting Records (with e-invoicing) and other invoicing software; and
• Other taxpayers, as may be required by the Commissioner of Internal Revenue.

For covered taxpayers, however, determining whether they fall within the mandate is only the starting point. The more difficult task is ensuring that their systems and processes are ready to meet the electronic invoicing requirements by the prescribed deadline.

Is the mandated timeline sufficient?

While the policy direction is clear, several implementation concerns remain. These include the limited time available to complete system enhancements, the absence of accredited Electronic Invoicing Service Providers (ESPs), uncertainty over the technical requirements, and the lack of specific guidance on how to proceed with preparations and applications for the necessary permits.

The challenge is not a lack of willingness to comply. For many businesses, e-invoicing is less a compliance exercise and more an operational and technology project. It requires companies to assess their systems, coordinate with software providers, implement enhancements, conduct testing, and secure BIR approvals. Given the volume of transactions handled by covered taxpayers, these activities can reasonably be expected to take considerable time and cannot be compressed into a last-minute exercise in the final three months of the year without increasing implementation and compliance risks.

Although the compliance deadline itself is not new, the specific e-invoicing guidelines were issued only on Sept. 22. To be fair, the BIR had signaled the e-invoicing mandate as early as February 2025, when the original deadline was set for March 2026. That deadline was later moved to Dec. 31 under Revenue Regulations (RR) No. 26-2025. However, in the absence of more comprehensive guidance on the operational and technical requirements, many taxpayers deferred significant implementation work.

With only a few months remaining before the compliance deadline, covered taxpayers now face the task of planning and securing the resources needed to adjust their systems and processes. The question is whether the remaining implementation window is sufficient to make the necessary adjustments and achieve meaningful compliance.

No accredited ESPs available

A further challenge is the current absence of accredited ESPs. Many taxpayers, particularly those without an in-house computerized accounting system (CAS), may need to rely on third-party service providers to meet the e-invoicing requirements. Without a list of accredited ESPs, taxpayers may find it difficult to evaluate available solutions and to begin system development or integration.

The lack of accredited providers narrows the compliance window for taxpayers intending to depend on third parties. Such taxpayers may struggle to select and onboard a vendor in time, and then to plan and implement the necessary adjustments within the remaining three-month period.

Complying with the required data format

Under the RMC, the BIR's existing electronic invoicing system prescribes the use of JavaScript Object Notation (JSON) format for the transmission of sales data. Taxpayers using other file formats may continue to do so, provided that the required sales data can be converted into and transmitted in the format prescribed by the BIR.

While this flexibility may appear beneficial, since taxpayers are not required to adopt JSON as their standard file format, they must still determine whether their existing systems can support the required data conversion and, if not, identify what modifications or enhancements may be needed.

Although it may be practical to adopt the prescribed format at the outset to minimize future modifications, taxpayers facing the approaching compliance deadline must weigh whether the remaining implementation period is enough to make these decisions and execute them effectively.

Permit and certification requirements

Enhancements to an existing CAS that enable the electronic issuance and transmission of invoices, as well as electronic reporting of sales data, may constitute a major system enhancement. This may require taxpayers to apply for a new Acknowledgment Certificate (AC), a process that can take considerable time from filing to issuance.

In addition, the RMC requires taxpayers to secure a Permit to Issue (PTI) electronic invoices, serving as evidence of their authority to issue invoices that comply with the prescribed e-invoicing requirements. The PTI does not replace the existing AC for the use of the CAS.

Under the RMC, an application for a PTI must be evaluated 20 working days from the BIR's receipt of the complete documentary requirements. Given this processing timeline, it is advisable to file applications as early as possible to ensure timely compliance, though this may not be feasible while the specific guidelines for PTI applications remain outstanding.

Taxpayers are also required to secure an electronic invoicing and sales reporting (EIS) certification within six months from the issuance of the PTI. Although this certification is not mandatory by Dec. 31, taxpayers should prepare for the requirement proactively, since failure to secure it will result in the revocation of the existing PTI.

Final thoughts on compliance readiness

These concerns highlight the gap between e-invoicing compliance obligations and the practical realities faced by taxpayers. With digitalization broadly welcomed and supported, the question is no longer whether taxpayers should comply; the obligation is clear. The more pressing question is whether the requirements, technical guidance and accredited service providers are maturing at the same pace as the compliance mandate itself. For many, compliance has become a race against time, with regulatory demands outpacing operational readiness and technological capabilities.

Given these challenges, it may be timely for the BIR to revisit both the implementation timeline and the current guidelines. Rather than deferring key procedural, technical and compliance requirements to future issuances, publishing consolidated guidance upfront would provide taxpayers with greater clarity. Such steps would not only ease the compliance burden but also promote more effective implementation. After all, the true measure of success will not be whether taxpayers meet the deadline on paper, but whether they are able to establish systems that support accurate, reliable and sustainable compliance moving forward. For taxpayers watching how this unfolds, the practical indicators of progress will be the publication of an accredited ESP list, the release of the outstanding PTI application guidelines, and consolidated procedural and technical guidance from the BIR — each of which remains outstanding for now.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only and should not be used as a substitute for specific advice.

Maria Alyssa Mae Panis is a manager in the Tax Services department of Isla Lipana & Co., the Philippine member firm of the PricewaterhouseCoopers global network. She can be reached at maria.alyssa.mae.a.panis@pwc.com.