Choosing the Right BIR CAS Provider: Compliance for 2024

Navigating the Computerized Accounting System (CAS) by the Bureau of Internal Revenue’s (BIR) requirements can feel overwhelming, especially lately with their stricter reinforcement. Aside from their requirement to urgently implement the system, it is also essential for staying compliant, avoiding penalties, and keeping your business transparent and credible. Completing these requirements helps your business run smoothly, ensures accurate record-keeping, and adherence to tax regulations.

If you’re feeling unsure about what’s needed for CAS registration, don’t worry – we’re here to help! This article will guide you through the process and make your preparation and application easier.

What is BIR CAS?

CAS, which stands for “computerized accounting system”, is a requirement by the Bureau of Internal Revenue (BIR) of the Philippines, to integrate a company’s accounting systems to generate its own set of computerized books of accounts, accounting records, and documents.

Computerizing the data streamlines the accounting process – especially tax audits, simplifies compliance with BIR regulations, and ensures accurate and efficient financial reporting.

What should you know if you’re not yet using a computerized accounting system (CAS)?

If your company isn't yet using CAS, there are important steps and potential consequences to be aware of. Once you implement a CAS, you must register it with the BIR and submit your computerized accounting books and records to the agency shortly after the end of the taxable year. Using an unauthorized CAS can result in significant penalties.

This requirement is also not limited to large businesses. The BIR is now also mandating that some small businesses adopt CAS to improve compliance and monitoring. For newly registered businesses and start-ups, implementing CAS from the outset can help establish sound accounting practices and ensure compliance from the beginning, but they can also face various challenges including:

  • Cost: Initial setup and ongoing maintenance of a CAS can be costly

  • Complexity: Transitioning from manual to computerized systems can be complex and would require extensive planning and user training

  • Resources: Integrating CAS with existing systems can be difficult and may require a significant investment of time and resources

  • Compliance: Staying up-to-date with BIR requirements and updates can be challenging

Who is required to have BIR CAS?

The following entities are required to adopt a BIR CAS:

  1. Large Taxpayers: This includes entities classified as large taxpayers according to Revenue Regulations No. 1-1998 (RR No. 1-98).

  2. Entities with Specific Criteria:

    • Branches under the Large Taxpayer Service

    • Subsidiaries, affiliates, and conglomerates of large taxpayers

    • Surviving companies in mergers or consolidations

    • Corporations absorbing operations of a large taxpayer

    • Corporations with authorized capitalization of at least PHP 300 million

    • Multinational enterprises with authorized capitalization of at least PHP 300 million

    • Publicly listed corporations

    • Universal, commercial, and foreign banks

How does the BIR classify Large Taxpayers?

Based on Tax Payment:

  • VAT: Net VAT of at least PHP 100,000 per quarter

  • Excise Tax: Annual excise tax of at least PHP 1,000,000

  • Income Tax: Annual income tax of at least PHP 1,000,000

  • Withholding Tax: Annual withholding tax payments of at least PHP 1,000,000

  • Percentage Tax: Percentage taxes of at least PHP 100,000 per quarter

  • Documentary Stamp Taxes: Aggregate annual documentary stamp taxes of at least PHP 1,000,000

Based on Financial Condition and Results of Operation:

    Gross Sales/Receipts: Total annual gross sales/receipts of at least PHP 1,000,000,000

    Net Worth: Total net worth of at least PHP 300,000,000

What are the BIR CAS application requirements?

A. Initial Application to Adopt CAS

For businesses applying to adopt CAS for the first time, the following requirements should be submitted:

Company Profile:

  • BIR Form 1900 – Application for Authority to Adopt CAS

  • Photocopy of BIR Certificate of Registration

  • Photocopy of previously issued permit (if applicable)

  • Photocopy of current registration permit

  • Location map of the business

  • Inventory of previously approved unused invoices and receipts (if applicable)

  • List of branches that will use CAS

Technical Requirements:

  • Application name and software used (Development & Database)

  • Functions and features of the application

  • System Flow/s

  • Process Flow

  • Back-up Procedure, Disaster and Recovery Plan

  • Sworn Statement and Proof of System Ownership

  • List of Reports and correspondences that can be generated from the system with their description, purpose and sample layout

  • Facsimile of system generated loose-leaf Books of Accounts and list thereof / receipts / invoices

  • Additional requirements in case of affiliated companies/sister companies, franchisees and branches

  • Photocopy of previously issued permit for mother/sister company or another branch using the same system, if applicable

  • Certification from the Computerized System Evaluation Team (CSET), which previously evaluated the approve system

B. Application for System Enhancement / Modification:

Businesses who wish to modify their current CAS, should submit the following documents to the BIR:

  • Photocopy of the previously issued permit to adopt CAS or components thereof

  • Letter to the BIR detailing the enhancement/modification to the previously approved CAS or components thereof

What to do when designated as a Large Taxpayer?

Being designated as a large taxpayer brings added responsibilities and requirements. It’s essential to take specific actions and seek the right support. Here’s a step-by-step guide to help you navigate this process effectively:

  1. Contact a Partner:

    • Choose an experienced partner: Engage with someone who has extensive experience in BIR CAS application and processing. Their expertise will be crucial in navigating the complexities of CAS registration.

    • Verify System Knowledge: Ensure that the partner is knowledgeable about BIR-approved systems and understands the latest requirements and updates.

    • Select someone who is familiar with your specific business processes: This will help them provide tailored advice and streamline the implementation process.

  2. Meet Deadlines:

    • Respond Promptly: Act quickly on all BIR notifications to ensure timely compliance. Delays in response can lead to fines or complications.

    • Adhere to Deadlines: Carefully track and meet all deadlines set by the BIR. Implementing a system for monitoring important dates and deadlines can help avoid penalties.

  3. Prepare Documentation:

    • Organize Required Documents: Gather and prepare all necessary documentation for CAS registration and BIR compliance. This includes financial records, system details, and previous tax documents.

    • Ensure Accuracy: Double-check all information for accuracy before submission to prevent delays and potential rejections.

  4. Implement System Changes:

    • Update Your CAS: Make necessary updates to your Computerized Accounting System to align with BIR requirements, including any changes in documentation or reporting formats.

    • Test the System: Conduct thorough testing of your updated system to ensure it functions correctly and meets all compliance standards before going live.

  5. Monitor Compliance:

    • Stay Informed: Regularly review BIR guidelines and updates to ensure ongoing compliance with any new regulations or changes.

    • Seek Continuous Support: Maintain a relationship with your partner for ongoing support and advice, especially if new issues or requirements arise.

By following these steps, you can effectively manage your obligations as a large taxpayer and ensure smooth and compliant operations.

Where can I find a BIR CAS-Ready Provider for my accounting system?

Mustard Seed offers fully localized BIR CAS solutions tailored for a wide range of accounting and ERP systems, ensuring that your financial processes are seamlessly integrated and compliant with the requirements. Discover our integrations, readily available to get your business up and running instantly:

  • NetSuite BIR CAS
  • Business Central BIR CAS
  • SAP Business One BIR CAS

With our localized BIR CAS solutions, you can confidently manage your financial data while meeting all regulatory requirements. Let us help you make your ERP system BIR-compliant, ensuring smooth operations and peace of mind.

What happens if my business does not comply?

Failing to comply with CAS requirements can have serious repercussions for your business. Here’s what you need to know about the potential consequences:

  1. Heavy Fines: Non-compliance can result in substantial fines that can significantly impact your financial stability.

  2. Increased Audit Exposure: Without CAS, your business is more likely to face BIR audits due to harder-to-verify manual records.

  3. Legal Consequences: Persistent non-compliance may lead to expensive and damaging legal actions.

  4. Missed Tax Incentives: You could lose out on tax benefits and incentives offered to compliant businesses.

  5. Operational Disruptions: Non-compliance may disrupt your business operations and lead to sanctions from the BIR.

Ensuring compliance with CAS requirements is crucial to avoid these negative consequences and maintain smooth, efficient business operations.

What are the new
BIR CAS updates for 2024?

If you’re using a Computerized Accounting System (CAS), it’s important to stay informed about the latest BIR regulations for 2024. Here’s what you need to know:

Recent Changes Before 2024:

  • January 2020: The BIR streamlined the CAS registration process with Revenue Memorandum Circular (RMC) No. 10-2020. This reduced the registration timeline to three (3) working days and simplified documentary requirements.

  • December 2020: RMC No. 5-2021 removed the requirement for businesses to secure a Permit to Use (PTU) for their CAS. However, large taxpayers are still required to register their systems with the BIR.

Updates for 2024: The Ease of Paying Taxes (EOPT) Act introduces significant changes:

  • Transition to Accrual Basis: The tax system now requires Invoices instead of Official Receipts for transactions. This change affects how documents are issued and processed.

The Invoice is now the primary document used to determine tax liabilities. For sellers, it serves as the basis for Value-Added Tax (VAT) and Percentage Tax. For buyers, it is the key document for calculating withholding tax.

  • System Reconfiguration: All CAS users must update their systems to reflect these changes by December 31, 2024.

Impact of the EOPT Act:

  1. Document Renaming: You can rename "Official Receipts" to terms like “Invoice,” “Cash Invoice,” “Charge Invoice,” or “Credit Invoice” without BIR approval. However, you must notify the BIR within 30 days of completing the reconfiguration or by December 31, 2024.

    • Required Notice: Submit a “Notice on the Renaming of Official Receipts to Invoice” with the following details:

      • Starting serial number of the converted invoice

      • Start date when the serial number will be/was issued

  2. >CAS/CBA Accreditation: Major changes to your CAS or Computerized Books of Accounts (CBA) require a new accreditation application. You must surrender the previous Acknowledgment Certificate (AC) to your RDO and obtain a new one. The reconfiguration must be completed by December 31, 2024, with a possible extension of up to six months.

    • Required Notice: Submit a notice to the BIR within 30 days of system reconfiguration or by December 31, 2024, whichever comes first.

For Businesses Using CRM / POS / E-receipting / E-invoicing:

  • Document Name Changes: According to Rev. Regs. 7-2024 and Rev. Regs. 11-2024, taxpayers may update the name of “Official Receipts” to any term describing the transaction without BIR approval. 

  • However, Revenue Memorandum Circular 77-2024 requires you to notify the BIR by submitting a “Notice on the Renaming of Official Receipt to Invoice” within 30 days of reconfiguration or by December 31, 2024. It should contain:

    • The starting serial number of the converted invoice

    • The start date when such serial number will be/was issued.

Still not sure where to start? Let us assist you with your BIR CAS setup!

If you’re still unsure about meeting the CAS requirements, there’s no need to worry because we’re here to help. To ensure that you implement a BIR-compliant and CAS-ready accounting system, consider booking a FREE consultation with the Mustard Seed Systems AccountingPro Team.

Get in touch with us for professional guidance and up-to-date information on BIR CAS compliance. We’re here to make the process as smooth and stress-free as possible for you!

About the Author


Janine Motos
Janine Motos

Editor

Janine has worked and written several blogs for Mustard Seed Systems Corporation as a Marketing Manager. This tech-savvy Website Admin now works as a Digital Innovations Lead, helping customers innovate and improve internal processes. She harnesses her IT expertise and power of words to drive transformative change for businesses of all sizes.

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