In the Philippines, the digitalization of commerce has prompted the Bureau of Internal Revenue (BIR) to implement stringent regulations ensuring that every peso earned through electronic means is properly accounted for. Whether a business operates via a physical Point-of-Sale (POS) terminal or a Web-Based Sales Platform, compliance is governed by a framework designed to prevent tax leakage and ensure the integrity of financial records.

I. The Regulatory Framework

The primary regulations governing these systems include Revenue Memorandum Order (RMO) No. 10-2005, Revenue Regulations (RR) No. 11-2004, and more recently, RR No. 16-2024 and RMC No. 8-2024, which address the obligations of e-marketplace operations and digital service providers.

All "Sales Machines" (including POS, Cash Register Machines (CRM), and special purpose machines) and software used for generating receipts/invoices must be BIR-accredited and registered before use.

II. Registration Requirements for POS Systems

A POS system is more than just a checkout counter; it is a critical accounting tool. The registration process involves two distinct phases: Accreditation (by the supplier) and Permit to Use (by the taxpayer).

1. Accreditation of the System

Before a taxpayer can use a POS, the software/hardware provider must secure a Certificate of Accreditation from the BIR National Office. This ensures the system:

Has a non-volatile memory or audit trail.
Cannot "reset" the accumulated grand total to zero.
Complies with the "Sequential Numbering" of receipts.

2. Application for Permit to Use (PTU)

Once a business acquires an accredited system, they must apply for a PTU through the Electronic Accreditation and Registration (eREGS) system. Requirements typically include:

BIR Form 1900 (Application for Permit to Use CRM/POS).
A sample receipt generated by the machine (showing the "Header" with Business Name, TIN, and Branch Code).
A "Z-Reading" sample (the end-of-day report).
The Serial Number of the machine and the Software Version.

3. Post-Registration Compliance

The Decal: Upon approval, the BIR issues a "Permit to Use" decal which must be permanently affixed to the machine in a conspicuous place.
The CRM/POS Sales Book: Taxpayers must maintain a manual record of daily sales generated by the machine, or an electronic equivalent if authorized.

III. Web-Based Sales Platforms and E-Commerce

For businesses selling via websites, mobile apps, or third-party e-marketplaces (e.g., Shopee, Lazada, TikTok Shop), the BIR treats the software as a "Web-based POS" or a Computerized Accounting System (CAS).

1. Registration of the Platform

If the website itself generates the invoice or receipt, it must be registered as a CAS or a "Middleware" under RMC No. 10-2020. Business owners must:

Register the business as a Digital Service Provider or "Brick-and-Click" entity.
Ensure the web platform can generate a BIR-compliant Electronic Invoice (e-Invoice).

2. The 1% Withholding Tax (RR No. 16-2024)

As of 2024, the BIR requires e-marketplace operators to withhold a 1% Creditable Withholding Tax on one-half (0.5%) of the gross remittances to online sellers. To avoid complications or higher tax rates, sellers must:

Submit their BIR Certificate of Registration (Form 2303) to the platform.
Ensure their registration includes the correct tax types (Income Tax, VAT/Percentage Tax).

IV. Key Features of Compliant Receipts/Invoices

Whether physical or digital, the system must produce receipts containing:

Business Information: Name, Registered Address, TIN (with 12 digits, including Branch Code).
Transaction Details: Date, Description of goods/services, Quantity, Unit Cost.
Tax Breakdown: Clear separation of VATable Sales, VAT Amount, VAT-Exempt Sales, and Zero-Rated Sales.
Machine Information: PTU Number, Date of Issue, and the phrase: "This Invoice/Receipt shall be valid for five (5) years from the date of the permit to use." (Note: Recent rules have simplified the validity of some permits, but the requirement for machine identification remains).

V. Penalties for Non-Compliance

Failure to register POS systems or web platforms can lead to severe consequences:

Unauthorized Use: Fines ranging from ₱25,000 to ₱50,000 per machine.
Failure to Issue Receipts: Criminal liability and fines.
Omission of the Decal: A penalty for failure to display the PTU.
Closure: Under the "Oplan Kandado" program, the BIR may temporarily shut down establishments that fail to register their sales systems or underdeclare sales by more than 30%.

VI. Summary of Obligations

Requirement	POS System (Physical)	Web-Based/Online Platform
System Source	Must be BIR-Accredited	Must be CAS-registered or Middleware-accredited
Display Requirement	PTU Decal on the machine	Business Name/TIN on the website footer
Sales Reporting	Daily Z-Reports	Monthly/Quarterly Electronic Filing
Receipt Type	Thermal/Tape Receipt	E-Invoice or Computerized Receipt