An invoice is an important document in any transaction. It primarily serves as a record of the transaction between a buyer and seller/supplier. Invoices are also important for tax purposes and are often required to be kept by the buyer for a prescribed amount of time. As the Philippines continues to develop, so do their processes, and invoicing is no different. The government of the Philippines has set a goal to have fully implemented e-invoicing systems by 2022.
The benefits of externalizing invoicing
Externalizing the process of invoicing clients is becoming increasingly common. There are various benefits that can be realized by externalizing invoicing, such as:
- Saving time and money – having in house staff and the correct processes could end up being costly and learning the correct process could be time consuming.
- Organized record – the 3rd party provider will use an organized system that will allow you to easily keep track of all transactions made.
- Expertise – the 3rd party provider will have specific knowledge and expertise on the local invoicing regulations.
- Payment – through the use of a 3rd party provider, payment can be remitted in various currencies, such as USD or in Euro’s.
Invoicing in the Philippines
In the Philippines the Electronic Commerce Act was passed in the year 2000. According to this act electronic documents have been granted the same legal effect as paper documents. Therefore, electronic documents are accepted for the purpose of serving as evidence for the sale of transactions.
Electronic invoicing (e-invoicing) has since becoming mandatory in the Philippines under the Tax Reform for Acceleration and Inclusion Act (TRAIN). In terms of this act, taxpayers who export goods or services, large taxpayers and those involved in e-commerce, are required to issue e-invoices for their transactions. These taxpayers are further required to report their sales and data of the transactions to the Bureau of Internal Revenue, at the time of the sale, within 5 years from the TRAIN law coming into effect (i.e. before January 2023).
Format of Invoices in Philippines
Invoices issued for any transaction in the Philippines are to contain the following information:
- Supplier’s name, registered address and VAT registration number;
- Bill to the invoicing party, with the full name and correct address;
- Invoice number and date of invoice;
- Description of the goods;
- Purchasing order item number or the delivery order number;
- VAT amount;
- Total amount to be paid and the currency it is to be paid in; and
- Authority to Print (ATP) details.
Let INS Global help you invoice your clients
At INS Global our experts are able to assist goods and services providers who do not have a legal entity in the Philippines, to invoice their clients in the local currency (Philippine peso). INS Global has an efficient and well established process, that is adaptable according to the specific needs of our clients.
With more than 14 years of experience across the Asian market, INS Global can assist your enterprise with a multitude of services, such as Payroll and Tax, PEO, recruitment and company incorporation.