How To Register Your Software with the BIR?
When a software development company in the Philippines provides businesses with software or applications, they need to register said software or app first with the Bureau of Internal Revenue (BIR) before they can officially start using them in their operations. Thus, any software solutions company in the Philippines and business owners need to know the step-by-step procedures for applying for authority to use the software. This article provides an overview of the documentary requirements needed and the process you should go through when you register your software with the BIR.
Documents to Prepare to Register Your Software with the BIR
You can start the process by gathering all the documentary requirements you need to register your software with the BIR.
Requirements for Initial Application to Adopt System
Depending on the software you want to register, you will need to fill out and accomplish the BIR Form 1900 or the Application for Authority to Adopt Computerized Accounting System (CAS) and/or Components Thereof/Loose-leaf Books of Accounts. You can also fill out and accomplish the BIR Form 1907 if you want to apply for a permit to use Cash Register Machine (CRM) or Point of Sale Machine (POS). Make sure that you are using the 2002 enhanced version of either form. Check out this guide on how you can apply for a permit to use CRM/POS.
You will need to provide supporting details that pertain to your company profile. These include:
- a photocopy of your company’s BIR Certificate of Registration
- if applicable, a photocopy of the Previously Issued Permit
- a photocopy of your company’s Current Registration Fee Payment
- information regarding the location map of your place of business
- an inventory of previously approved unused invoices and receipts, if applicable
- a list of your company’s branches that will use the software
Regarding the technical requirements, you need to:
- provide the name of the application and software used, including its development and database
- detail the functions and features of the software or application
- describe the software’s system flow, process flow, backup procedure, and disaster and recovery plan
- include a sworn statement and proof of system ownership
- submit a list of the reports and correspondences that you can generate from said software, including their description, purpose, and sample layouts
- include a facsimile of system-generated loose-leaf books of accounts, receipts, and invoices
Before you decide to avail of software development services, make sure that your software provider has agreed that they will assist you when complying with these requirements.
In case you have affiliated or sister companies, franchisees, and branches. Other requirements include a photocopy of the previously issued permit for the mother or sister company or branch that uses the same software or system, if applicable. You also need to include a certification from the Computerized System Evaluation Team (CSET) that evaluated your software or system beforehand.
Requirements for Application for System Enhancement or Modification
To apply for system enhancement or modification, you need to submit a photocopy of the previously issued Permit to Adopt CAS. As per Revenue Memorandum Circular No. 5, s. 2021, system enhancement may include “user interface modification, bug fixes, performance improvements” and the like. You then submit a letter to the BIR describing the enhancement or modification to be made on the previously approved CAS.
How to Register Your Software with the BIR
Procedures for Initial Application
Suppose your branch is applying for the Permit to Use CAS for the first time. In that case, you need to file your application at the Revenue District Office (RDO), which has jurisdiction over your branch’s head office (HO). You can also file your application at the Large Taxpayer Assistance Division (LTAD I or II). Another option is to submit at the Large Taxpayers District Office (LTDO).
However, if your branch adopts the CAS ahead of your head office, you should apply with the RDO with jurisdiction over you. You should submit a certification that states the head office is not using the CAS you are applying for. Then, when the head office later adopts the same CAS as yours, the BIR will issue a permit to your head office and include a new permit for your branch. This permit shall supersede the permit issued previously.
Then, when your branch adopts a different CAS from your head office, you will need to apply for a permit to adopt said CAS at the BIR Office who has jurisdiction over your branch.
The BIR will issue the Permit for CAS after they evaluate a demonstration of the applied system or software. They will then recommend it for approval to the CSET.
Procedures for Application for System Enhancement or Modification
Now, suppose you want to apply for system enhancement or modification on the previously approved software. In that case, you need to submit a letter to the RDO that previously issued the permit. Describe in the letter your planned enhancement or modification of the software or system. Ensure that you attach a photocopy of the previously issued Permit to Adopt CAS with the said letter.
For more information regarding this matter, you can refer to Revenue Memorandum Order No. 21-2000 with subject line Processing and Approval of Taxpayer’s Application for Permit to Adopt Computerized Accounting System and/or Components Thereof. You can also check out the BIR’s Frequently Asked Questions (FAQs) section on the subject.
Learn the Know-Hows Before You Register Your Software with the BIR
With the overview and information mentioned above, you are now guided on how to register your software with the BIR. If you still need help navigating through the required documents and procedures, you can always seek help from the best software company in the Philippines that knows how to deal with and comply with the BIR.
Do you have more questions on how to register your software with the BIR? Feel free to send us an email or let us know in the comments section!