Everything You Need to Know about Being BIR CAS Compliant

To many Filipino business owners, regulatory compliance is a tedious and tiresome affair. Some are even tempted to put their compliance matters on the backburner in favor of other concerns, like sales, and only revisit their regulatory compliance at the very last minute. But while it’s true that compliance may not be a revenue-generating aspect of doing business, it is still worth prioritizing. This is especially true of any compliance requirements that come from the Bureau of Internal Revenue, or BIR.

If you’re currently modernizing your company with a computerized accounting system, or CAS, there’s a pressing need to ensure that you are BIR CAS compliant. Registering your CAS and updating your procedures for full BIR compliance will save you from steep penalties. A good compliance record will also set a precedent for a good relationship with the tax collection agency.

How should you go about your BIR CAS compliance, and what requirements should you prepare? Here’s a briefer on everything you need to know about the process. 

What Type of Business Should Use a CAS?

Revenue Memorandum Order No. 1-2009 requires all large taxpayers to upgrade to a CAS and register their chosen system at the BIR. But the right to use a CAS isn’t exclusive to these large companies. Small and medium-sized businesses can also choose to adopt a CAS as long as they follow the same compliance requirements.  

Are You Required to Register Your CAS at the BIR?

The short answer to this question is yes. All companies that intend to use a CAS for their accounting procedures, regardless of whether they are mandated to by law or choose to do so of their own volition, must register their CAS at the BIR.

The same companies should also register anew at the BIR in case they adopt a major system enhancement or modification to their existing CAS. The scope includes changes to the functionality of the system, any addition or subtraction of modules or sub-modules, and other changes that will have an impact on the major financial aspects of the system. Minor system enhancements to the CAS, like bug fixes, require a brief letter of notification to the business’s Revenue District Office, or RDO.

What Components Should Your CAS Contain?

As per Revenue Memorandum Order 29-2002, the BIR requires a CAS to contain the following components:

• A general journal, accompanied by other subsidiary records
• Accounting records such as books for sales, books for purchases, books for inventory, books for accounts payable, books for accounts receivable, payroll ledgers, and subsidiary ledgers
• Application systems that are involved in generating the subsidiary ledger and are responsible for official accounting documents, such as invoices, cash vouchers, official receipts, journal vouchers, sales tickets, and billing statements
• Application systems that are responsible for generating reports that are specifically required by the BIR
• Point of sale (POS) systems or cash register machines (CRMs) that are linked to the CAS

What are the Documentary Requirements for Registering Your CAS?

You should prepare the following documentary requirements for your BIR CAS registration:

• A duly accomplished BIR Form 1900, which is the official application form for BIR CAS registration
• Documents to validate the company’s profile such as its BIR Certificate of Registration, previously issued BIR permits, map with the business headquarters location, and a list of branches that will use the CAS
• The technical requirements of the CAS to be used, such as the application name, a summary of features and functions, system flow, process flow, disaster and recovery plan, proof of system ownership, and samples of reports and correspondences that can be issued by the CAS system, among others

For applications for system enhancements or modifications, you’ll need to pass a copy of your previous BIR Permit to Adopt CAS and a letter to the agency detailing the modification or enhancement to your CAS.

These requirements may be subject to change in the future. Be sure to double check with an authorized representative of the BIR before you finalize your registration.

Is It Difficult to Register Your CAS at the BIR?

Those who are new to the process of registering their CAS may think that the process is exceedingly difficult. But the BIR recently released Revenue Memorandum Circular No. 5-2021, which has streamlined the process of application and made it easier for businesses to adopt their own computerized accounting systems.

Before this circular was issued, any company that wanted to register a CAS had to go through a system demo or pre-evaluation by BIR officers. Companies were also required to wait for a Permit to Use, or PTU, before they could implement their new CAS. As of this writing, BIR no longer requires a system demo or the issuance of a PTU. First-time CAS registrants only need to submit their documentary requirements for registration and wait three working days for an Acknowledgment Certificate before rolling out their CAS.

BIR CAS Compliance Made Easy with ANSI Information Systems

BIR may have simplified its CAS compliance requirements, but first-time owners of a CAS may still have the jitters about staying compliant. If you’re nervous about onboarding a new CAS and fulfilling the BIR’s requirements, don’t hesitate to contact ANSI Information Systems.

After more than three decades of working with Filipino businesses, we’ve also gained some expertise about how to work with the Philippine government. Let us help you with the red tape as well as the particulars of onboarding your new CAS. Call ANSI Information Systems now, and make us your partners in your BIR CAS compliance journey.