A comprehensive guide to BIR rules on invoices and ORs for hotels in the Philippines

Executive summary

Yes—Philippine hotels are required to issue BIR-registered source documents for every taxable transaction. Which document depends on what was sold:

Room accommodation and other services (e.g., function room rental, spa, laundry, transport): issue an Official Receipt (OR) (sale of services).
Food & beverage, minibar, merchandise, and other goods: issue a Sales Invoice (SI) (sale of goods/properties).

Hotels often deliver a single folio at checkout. That folio is not a substitute for a BIR-registered OR/SI; it’s merely a guest statement. The legally required document(s) must still be issued by the hotel’s BIR-registered POS/invoicing system.

Legal framework (key provisions)

National Internal Revenue Code (NIRC)
- Sec. 106 & 108 distinguish sale of goods/properties vs. sale of services/use or lease of properties.
- Sec. 113 (VAT) prescribes invoicing requirements for VAT-registered taxpayers.
- Sec. 237 requires persons subject to internal revenue tax to issue receipts/invoices for each sale or receipt of payment meeting the threshold, and prescribes information that must appear on these documents.
- Sec. 264 & related rules provide penalties for failure to issue or for using unregistered/invalid receipts/invoices.
- Sec. 113/237, together with the relevant BIR Revenue Regulations, govern the content, printing/registration, and timing of ORs/SIs (including computerized or e-invoicing setups).

In Philippine tax administration, sales invoices are the principal documents for goods, and official receipts are the principal documents for services. Hotels typically have both kinds of transactions.

What a hotel must issue—and when

1) Room accommodation and hotel “services” → Official Receipt (OR)

Examples: room charges, function room/ballroom rental, day-use fees, corkage, spa/amenities, business center, airport transfer, late checkout fees, laundry, photocopying, etc.

Timing: Issue the OR upon receipt of payment (including partial payments/advances that are actually applied to the bill).
Advance deposits:
- If applied to the stay (e.g., down payment), issue an OR to the extent applied at the time of application/collection.
- If purely refundable security deposit (not yet earned or applied), a formal acknowledgment/provisional receipt may be used first; an OR is issued once the deposit is applied or forfeited.

2) Food & Beverage (F&B), minibar, retail merchandise → Sales Invoice (SI)

Examples: restaurant dining, room service trays, banquet F&B, bar tabs, minibar pull-outs, gift shop items, souvenirs, bottled water sold as goods.

Timing: Issue the SI upon sale/delivery or upon payment per system design (POS).
Banquets/events:
- The venue/service component → OR.
- The F&B component → SI.
- Your contracts and POS should split the billing so both documents are generated properly.

3) Mixed transactions and the “hotel folio”

The folio/statement summarizes a guest’s running balance. It does not replace the BIR document(s).
Best practice:
- F&B/retail lines are captured and settled via the restaurant/retail POS that issues an SI.
- Room and service lines are settled via the front-office system that issues an OR.
- At checkout, the guest may receive a folio plus the underlying OR and/or SI (or consolidated OR/SI printouts from your registered system).
If your system prints a single “tax invoice” at checkout, it must be BIR-registered and compliant, and it should clearly segregate goods vs. services, tax bases, and tax types.

Mandatory contents of ORs and SIs (what must appear)

Whether OR or SI, BIR-registered documents must typically show:

Hotel’s registered name (“doing business as”), branch address, and TIN with the phrase “VAT Registered” (if VAT-registered) and the VAT registration details (including branch code, if any).
Date of transaction, consecutive serial number, and machine/permit identifiers (e.g., Permit to Use, PS/ACR codes for POS/CAS/e-invoicing, as applicable).
Buyer information (name, address, TIN) if required or requested (e.g., corporate accounts claiming input VAT or for large-value transactions).
Description of the sale:
- For services (OR): nature of service (e.g., “Room accommodation – 2 nights,” “Function room rental,” “Laundry – 5 pcs”).
- For goods (SI): quantity, unit, description, unit price, and line extensions.
Tax breakdowns and legends:
- Show VATable sales, VAT-exempt sales, zero-rated sales, VAT amount, and total.
- For non-VAT taxpayers, the document must not show VAT and must carry the legend “NOT VAT-REGISTERED” or an equivalent statement; if subject to percentage tax, show the gross and applicable percentage tax notes as required.
Other mandated legends (e.g., “This document is valid for input tax claims” for VAT invoices/ORs; or the required disclaimer for non-VAT taxpayers that it is not valid for input VAT claims).
Service charge and other fees must be separately indicated; unless specifically exempt, they typically form part of the gross amount charged and follow the same VAT treatment as the underlying sale.

Keep your document titles accurate: “Official Receipt” for services, “Sales Invoice” for goods. Mislabeling can jeopardize a buyer’s input VAT and expose the hotel to penalties.

Registration and systems compliance

POS/CAS/e-Invoicing: Your printers, POS, or computerized accounting system (including property management systems) must be registered with the BIR.
Serial control: Use consecutive serial numbers per outlet/series; manage voids/cancellations per BIR control rules.
Authority to Print (ATP) or permit to use (PTU) systems, as applicable: source documents must be pre-approved/registered and reissued upon series exhaustion or design changes.
Branching: Each branch or outlet (e.g., separate restaurants, spa) may require its own series and registration, depending on how your POS is structured.

VAT, percentage tax, and withholding intersections (hotel perspective)

VAT: Hotels are generally VATable on the gross amounts charged for both accommodation (services) and F&B (goods), unless a specific exemption or zero-rating applies (e.g., qualified PEZA/eco-zone arrangements; diplomatic entities with valid certificates).
Local service charge: Customary service charges shown on the bill generally form part of gross receipts/sales for VAT purposes unless a specific rule provides otherwise.
Percentage tax: If a hotel (or a specific outlet) is not VAT-registered and falls under percentage tax, issue non-VAT ORs/SIs with the required legend; VAT should not be printed.
Withholding taxes:
- Government or top withholding agents may withhold on hotel services/F&B under expanded withholding tax (EWT) rules. The buyer’s Certificate of Creditable Tax Withheld at Source (BIR Form 2307) supports the hotel’s claim; the hotel still issues the OR/SI for the gross amount.
- Keep sales net vs. gross straight: the OR/SI shows gross, with the withholding documented separately by the buyer’s 2307.

Special situations for hotels

Online Travel Agencies (OTAs) and intermediaries
- Determine who is the seller of record to the guest. If the hotel bills the guest, the hotel issues the OR (accommodation) and SIs (goods) to the guest; the OTA commission is a service purchased by the hotel (documented by the OTA’s invoice/OR, often cross-border). If the OTA is the seller of record and remits net to the hotel, align your documents to the agency/principal flow and keep contracts handy.
Corporate/volume accounts & long-stay guests
- Monthly billing is common; still, issue ORs/SIs per collection (for services) or sale/delivery (for goods).
- “Residential” lease exemptions typically do not apply to hotel accommodation; a hotel’s lodging service remains a commercial service unless you have a separately registered residential leasing business that meets exemption criteria.
Embassies/international organizations/diplomatic
- Some entities enjoy VAT exemption/zero-rating subject to documentary proof (certifications/IDs). You may need to issue OR/SI showing zero-rated or VAT-exempt sales and keep the supporting documents on file.
Gift certificates/vouchers
- For sale of a GC (mere payment instrument), typically no VAT/OR yet—issue an acknowledgment; recognize and document VAT via OR/SI when the GC is redeemed against goods (SI) or services (OR). If your GC is structured as a discount right vs. stored value, follow the specific tax treatment in your policy and keep support.
No-shows / cancellation fees
- If fees are collected/forfeited, they usually form part of gross receipts for services; issue an OR when collected or when the deposit is forfeited.

Recordkeeping and retention

Keep copies (electronic or physical) of issued ORs/SIs, audit trails, Z-readings, and summary tapes/reports per BIR’s retention rules (generally 10 years, with the first 5 years in hard copy or easily accessible electronic form).
Maintain mapping between your PMS/folio IDs and the corresponding OR/SI serials to satisfy audit tracing.

Penalties and enforcement

Failure to issue the proper OR/SI, issuance of unregistered documents, or use of unregistered machines/systems can trigger:
- Compromise penalties and fines under the NIRC,
- Criminal liability (Sec. 264) in egregious cases, and
- Temporary closure of the establishment under BIR’s enforcement powers (e.g., for failure to issue receipts, under-declaration, or sales suppression).
Buyers may disallow input VAT if the document is defective/mislabeled (e.g., an OR used to support input VAT on a goods purchase, or an SI used for a service purchase).

Practical compliance checklist for hotel finance & front office

Map your revenue streams into goods vs. services and decide where OR vs. SI is required.
Configure POS/PMS to automatically issue the correct document with BIR-registered series; ensure function rooms/venue rental route to OR, F&B to SI.
Train staff: a folio is not a BIR document. Hand the guest the OR/SI (or send via registered e-invoicing if applicable).
Show tax breakdowns/legends correctly (VATable/VAT-exempt/zero-rated; VAT amount).
Capture buyer TIN/name when requested (e.g., corporate clients) to protect their input VAT and avoid disputes.
Handle deposits: acknowledge on receipt; issue OR when applied or forfeited.
Maintain serial control & retention; reconcile PMS folios to OR/SI series daily.
Review contracts with OTAs/corporates to ensure the seller of record and document issuer are clear.

Frequently asked questions

Q1: Can a hotel just issue one OR for everything at checkout? Only if your registered system legitimately treats all items as services (which is unusual) or if it issues a compliant consolidated document that properly segregates goods vs. services and tax breakdowns—and you have BIR approval/registration for that configuration. Otherwise, F&B needs an SI, and room/venue needs an OR.

Q2: Is a “Statement of Account,” “Acknowledgment Receipt,” or “Pro Forma Invoice” enough? No. Those are not substitute source documents. You must still issue the BIR-registered OR/SI.

Q3: Do we need to issue an OR for every small payment? Under Sec. 237, issuance is required once the statutory threshold is met (and in practice hotels issue for all billable transactions). As a hospitality best practice—and to avoid audit issues—always issue via your registered system.

Q4: How are service charges treated? They should be separately shown and typically follow the VAT treatment of the underlying sale, becoming part of gross for VAT/EWT unless a specific rule provides otherwise.

Q5: What if the guest is an embassy or a PEZA enterprise? Request the proper certificates/IDs. If the sale qualifies as VAT-exempt/zero-rated, the OR/SI should reflect the correct tax code and you must file/keep the supporting documents.

Bottom line

Hotels must issue ORs for services and SIs for goods.
A guest folio is not a legal substitute for an OR/SI.
Configure systems and train teams so the correct, BIR-registered document is issued every time—with the right legends, tax breakdowns, and buyer details when needed.
Doing so protects your guests’ input VAT, your hotel’s tax position, and helps you avoid penalties or closure actions.