BIR Invoicing Requirements for Non‑VAT Affiliate Travel Agents in the Philippines
(A comprehensive legal‑practitioner’s guide – updated to July 23 2025)
Disclaimer: This article is for general information only and does not substitute for individualized legal or tax advice. Consult the Bureau of Internal Revenue (BIR) issuances and your tax adviser for specific situations.
1. Regulatory Framework
| Level | Key Issuance | Relevance |
|---|---|---|
| Statute | National Internal Revenue Code (NIRC) of 1997, as amended (notably §§ 109, 116, 236–238, 264) | Provides authority to tax, prescribes mandatory receipting, and imposes penalties. |
| Revenue Regulations (RR) | RR 18‑2012, RR 10‑2015, RR 16‑2005, RR 6‑2022 (CREATE updates) | Detail form, content, imprinting, and threshold rules for invoices/official receipts (ORs). |
| Revenue Memorandum Orders (RMO) / Circulars (RMC) | RMO 12‑2013, RMO 9‑2015, RMC 29‑2019, RMC 42‑2022, RMC 55‑2023, RMC 11‑2025 | Operationalize Authority‑to‑Print (ATP), Computerized Accounting Systems (CAS), eOR/QR‑phased rollout, and penalties. |
| CREATE Law (RA 11534) | Temporarily reduced percentage tax rate to 1 % (July 2020–June 2023); returned to 3 % from 1 July 2023 | Affects tax‑type labeling on receipts and the “NON‑VAT” legend. |
| E‑Invoicing/ERTIS Law (RA 10963, TRAIN; § 237 & RR 8‑2022) | Introduces mandatory electronic invoicing for large taxpayers; voluntary for others. Non‑VAT agents may opt‑in. |
2. Who Are “Non‑VAT Affiliate Travel Agents”?
- “Affiliate travel agent” – a Philippine‑resident entity or individual contracted by a principal (e.g., airline, online travel platform) to sell or book travel products and earn commissions or service fees.
- “Non‑VAT” status – total gross receipts ≤ PHP 3 million in any 12‑month period (Sec 109(1)(BB), NIRC). Instead of 12 % VAT, they pay percentage tax under § 116 (3 % after CREATE sunset).
- Registration – BIR Form 1901 (individual) or 1903 (corporation/partnership) must mark “NON‑VAT/Other Percentage Taxpayer”.
3. Which Document to Issue: Sales Invoice vs Official Receipt?
| Nature of Transaction | Required Document | Why |
|---|---|---|
| Sale of a service (ticketing, booking, itinerary planning, consultancy) | Official Receipt (OR) | Services are covered by § 237, NIRC; OR evidences billing and collection. |
| Sale/transfer of goods (rare for agents, e.g., maps, travel kits) | Sales Invoice (SI) | Goods transactions fall under § 237, first paragraph. |
| Mixed sale | Issue both or use multi‑purpose “VAT/Non‑VAT” prenumbered series with service/merchandise columns | BIR allows composite forms if approved in ATP/CAS. |
Rule of Thumb: If you charge a fee or commission, issue an OR when you receive payment; if you sell goods, issue an SI upon each sale OR upon delivery, whichever comes first.
4. Mandatory Contents of a Non‑VAT Official Receipt
Under § 237, NIRC and RR 18‑2012 (mirrored in § 2(2) of RR 10‑2015):
Taxpayer’s Registered Name, Trade Name & Address
Taxpayer Identification Number (TIN) & Branch Code
Serial Number & Date of Issuance (no skipped or duplicated numbers)
Name, Address & TIN of Customer (required if OR ≥ PHP 100 or on demand)
Description of Service Rendered (e.g., “Airline ticketing – Cebu Pacific MNL–CEB”)
Amount – gross, less discounts, net; show commission base separately if applicable
Legend “NON‑VAT – Taxable under Sec 116, NIRC” (or “VAT‑EXEMPT SALE” if exemption under § 109 applies beyond threshold)
BIR Permit Details
- Authority‑to‑Print (ATP) Control No.
- Printer’s Accreditation No. & Address
- Validity Period (on last sheet or footer)
Signature (manual or digital)
QR Code (if enrolled in eOR/ERTIS system; optional until mandated)
Font Size: Legends must be at least 10‑point Arial/Helvetica; “NON‑VAT” should be bold. Language: English or Filipino; bilingual allowed.
5. Procedural Requirements
5.1. Authority to Print (ATP)
| Step | Action |
|---|---|
| 1 | File BIR Form 1906 electronically or at RDO; attach sample lay‑out. |
| 2 | Wait for system‑generated Permit to Use/ATP (valid 5 years or until serials exhausted). |
| 3 | Print ORs only through BIR‑accredited printers listed in RMO 12‑2013. |
| 4 | Notify BIR of first use (BIR Form 1905) and destroy unused stock after validity expires. |
5.2. Computerized Accounting System (CAS) / Loose‑Leaf / eOR
- CAS/PTU – File BIR Form 1900; submit back‑up files annually.
- Loose‑Leaf – Requires Permit to Use Loose‑Leaf; must be bound and stamped by BIR after printing.
- eOR – Large taxpayers mandatory; non‑VAT agents may opt‑in. Must generate QR‑coded OR and transmit data to BIR within 3 calendar days.
5.3. Books of Accounts
- Cash Receipts Journal must cross‑reference OR numbers.
- Registered Ledger/Binder for OR stubs retained for 10 years (Sec 203, NIRC plus § 222 extension).
6. Special Issues for Affiliate Commissions
| Scenario | Invoicing & Tax Notes |
|---|---|
| Principal (airline) pays agent net of 15 % Expanded Withholding Tax (EWT) | Agent issues OR for gross commission; principal withholds 15 % and remits via BIR Form 1601‑EQ; agent credits EWT against income tax due. |
| Agent remits fare to airline and retains commission | Two entries: (1) Provisional receipt or system voucher when collecting passenger fare; (2) OR for agent’s commission portion when fare is remitted and commission realized. |
| Foreign‑currency commissions | OR may be denominated in foreign currency with PESO equivalent at BSP reference rate on date of OR. |
| Zero‑rated international ticket sales (airline is VAT‑zero‑rated) | Agent’s commission is VAT‑exempt if non‑VAT; still issue NON‑VAT OR. |
7. Thresholds, Exemptions & Transition to VAT
| Item | Rule for Non‑VAT Agents |
|---|---|
| Total Gross Receipts > PHP 3 M within any 12‑month period | Register as VAT within 30 days (§ 236(G), NIRC); must obtain new series of VAT‑registered invoices/ORs or re‑stamp remaining stocks (“VAT REGISTERED”). |
| Single Sale ≤ PHP 100 | OR may omit customer’s name/address (§ 2.6, RR 16‑2005). |
| Credit/Debit Card Sales | Still issue OR; card slip is not a substitute. |
8. Penalties for Non‑Compliance
| Violation | Penalty (Sec 264, NIRC; RR 6‑2022) |
|---|---|
| Failure to issue OR/SI | PHP 1,000 per document + per‑count surcharge; or PHP 10,000 per act for eOR non‑issuance. |
| Use of unregistered printer or OR without ATP | PHP 20,000–50,000 + up to 2 yrs imprisonment. |
| Late registration/label change upon VAT threshold breach | PHP 500 monthly surcharge + 25 % of tax due. |
| Tampering/erasure of serial numbers | PHP 1,000 each + criminal prosecution. |
Tip: Establish an internal OR register to detect skipped or duplicate numbers early.
9. Practical Compliance Checklist
- Confirm Status: Keep a rolling 12‑month sales tracker to know when you approach PHP 3 M.
- Apply ATP Early: Printing lead time is 4–6 weeks; submit sample lay‑out with “NON‑VAT – Sec 116”.
- Train Staff: Front‑liners must know when to issue provisional receipts vs ORs.
- File Summary Lists: Although Non‑VAT, large or eOR users must upload Summary List of ORs (SLOR) via eFPS.
- Store Stubs Securely: Keep unused and used stubs in locked cabinets; document any lost or spoiled receipts with an affidavit and RDO report.
10. Recent & Upcoming Developments (2024–2025)
| Date | Update |
|---|---|
| Jan 1 2024 | VAT threshold reaffirmed at PHP 3 M (RR 13‑2023); percentage tax firmly back to 3 %. |
| Apr 30 2024 | RMC 55‑2023 grants small service enterprises the option to adopt QR‑coded ORs without full CAS registration. |
| Jan 1 2025 | RMC 11‑2025 clarifies that commission‑only travel agents selling exclusively through marketplace platforms may use platform‑generated eORs, provided the agent’s TIN and “NON‑VAT” legend are visible and data are pushed to BIR portal. |
| July 1 2025 | Pilot of real‑time invoice data‑pushing API for voluntary small taxpayers; travel‑tech partners like GDS/OTAs may integrate on behalf of affiliates. |
11. Frequently Asked Questions
May I issue one consolidated OR weekly to a corporate client? Yes, provided you give daily provisional receipts and the weekly OR cites each provisional receipt and covers the exact amounts.
Do I need a separate OR series for dollar‑denominated sales? No, but the OR must show the peso equivalent; you may maintain a separate series for ease of monitoring.
Can I use pre‑printed “VAT‑exempt” OR stock from my supplier? Yes only if it contains the exact “NON‑VAT” legend and matches your ATP lay‑out.
What if my principal issues its own e‑ticket receipt to the passenger? That is not your tax receipt. You must still issue an OR for your commission.
12. Conclusion
Complying with BIR invoicing rules is critical for non‑VAT affiliate travel agents not only to avoid penalties but also to maintain credibility with principals and clients. The heart of compliance lies in accurate, timely, and properly formatted Official Receipts, backed by a valid ATP or eOR permit, robust internal controls, and prompt transition to VAT if the statutory threshold is breached. With digitalization accelerating, now is the time for small agents to explore eOR solutions that automate data‑pushing to BIR, future‑proofing their operations while keeping costs manageable.
Prepared by: [Your Name], CPA‑Lawyer & Tax Consultant Updated: July 23 2025