In the landscape of Philippine taxation, administrative compliance often carries as much weight as the payment of taxes themselves. For many entrepreneurs—particularly those in the service sector or those operating on a "dropshipping" or "just-in-time" basis—the question arises: If I have no physical stock, am I exempt from filing an Inventory List?

The short answer, according to prevailing Bureau of Internal Revenue (BIR) regulations, is no. Even with zero inventory, the obligation to submit remains.

The Legal Basis: RR No. 2-2015

The primary regulation governing this requirement is Revenue Regulations (RR) No. 2-2015. This issuance mandates that all taxpayers maintaining inventory of stock-in-trade, raw materials, goods in process, supplies, and other goods must submit an annual inventory list.

While the phrasing "taxpayers maintaining inventory" might suggest an out for those who don't, the BIR’s enforcement stance is rooted in Revenue Memorandum Circular (RMC) No. 57-2015. This circular clarified that the submission is mandatory for all taxpayers who are required to keep a Book of Accounts, regardless of whether they have a physical inventory at the end of the year.

Why Must "Zero-Inventory" Businesses File?

The BIR requires a "Nil" submission for several regulatory reasons:

Consistency in Records: A formal submission of a "Nil" inventory list serves as a sworn declaration that the business holds no physical assets. This prevents taxpayers from later claiming "old stock" to justify unexplained sales or deductions.
Audit Trail: By filing a zero-inventory list, you close the loop on your financial year. Without it, the BIR’s system may flag the account as "non-compliant," triggering automated penalties or open cases.
Proof of Service Nature: For purely service-based businesses (e.g., consultants, law firms, freelancers), the filing confirms to the BIR that the revenue generated is derived solely from labor/expertise rather than the sale of goods.

Key Deadlines and Requirements

Taxpayers must submit the inventory list on or before January 30th of each year, covering the period ending December 31st of the previous year.

What to Submit:

The Inventory List: For zero-inventory businesses, the schedules should clearly state "NIL" or "NONE."
Sworn Declaration: A notarized declaration stating that the information provided is true and correct.
Soft Copy (DVD-R): Under RR No. 2-2015, the submission must be in a soft copy format (usually Excel or CSV) stored on a DVD-R, accompanied by a hard copy of the notarized sworn declaration.

The Consequences of Non-Filing

Failure to submit the inventory list—even if there is nothing to report—is considered a failure to comply with record-keeping requirements.

Compromise Penalties: Under RMC No. 7-2015, the penalty for failure to submit the inventory list can range from ₱1,000 to ₱25,000, depending on the gross sales or receipts of the taxpayer.
Open Cases: A missing submission creates an "open case" in the BIR’s Internal Revenue Integrated System (IRIS). This can block the issuance of a Tax Clearance, which is essential for renewing business permits or bidding on government contracts.

Summary for Business Owners

If your business is registered with the BIR and you are required to maintain books of accounts, you should treat the Inventory List as a mandatory annual "check-in."

Check your Certificate of Registration (Form 2303): If your industry code suggests trading or manufacturing, the BIR expects this list.
File a "Nil" Report: Even if you are a consultant or a digital service provider with zero physical stock, submitting a "Nil" report protects you from unnecessary penalties and future audit complications.

Would you like me to draft a template for the Sworn Declaration required for a Nil Inventory submission?