January 11, 2024 | Blog

Taxes have a significant impact on businesses, playing a crucial role in shaping their operations and financial landscape. They serve as a key factor influencing decision-making and strategy within the business environment. Properly managing and navigating the tax landscape is vital for businesses to ensure compliance and financial stability.

How Digital Transformation Can Innovate Tax Processes

On a global scale, tax per se, countries are now leaning toward sustainability, in which digital transformation serves as a bridge to streamline financial processes and enhance compliance. “That is why tax administrations are undertaking the digital transformation and automation of their systems. The adoption of technology can enable successful and sustainable tax reforms, ensure the proper taxation of the digital economy, and reduce the obstacles to compliance,” said Marcello Estevao of the World Bank.   

What is BIR CAS? 

In the Philippines, digital transformation in the tax system is evolving and growing. The Bureau of Internal Revenue (BIR) uses a Computerized Accounting System (CAS) known as BIR CAS. It aims to implement an e-invoicing system to modernize its traditional labor-intensive processes, helping many businesses comply effectively with their chosen and approved accounting system. With this process, both BIR and taxpayers can maximize time, reduce errors that cause penalties, and improve the movement of cash flow. Last year. BIR CAS began its phase one, welcoming companies to participate in the ongoing digital transformation in the Philippine Tax System.

A Quick Guide for Your BIR CAS Application

We recognize that navigating the complexities of regulatory landscapes can be overwhelming for business owners. In this post, we’ll navigate the essential steps large taxpayers must take to ensure BIR CAS compliance. 

Step 1 Choose a Reliable Accounting Software for Your Business and Register It

The first step for the BIR CAS application is to choose a reliable accounting software for your business and register it. Oracle NetSuite, IT Group, Inc.’s trusted technological partner, is the No. 1 cloud-based Enterprise Resource Planning (ERP)  in the Philippines that offers various solutions for business management, including accounting and financial management. 

To register your system or software, accomplish the complete Checklist Documentary Requirements (CDR) with complete documents in the Revenue District Office (RDO) where your business is registered. 

Step 2 Complete Your Documentary Requirements

For the initial application to adopt CAS and/or components thereof, the following requirements must be submitted: 

• Accomplished BIR Form 1900 and/or Accomplished BIR Form 1907

• Company Profile
  • Photocopy of BIR Certificate of Registration
  • Photocopy of Previously Issued Permit, if applicable
  • Photocopy of Current Registration Fee Payment
  • Location map of the place of business
  • Inventory of previously approved unused Invoices and receipts, if applicable
  • List of branches that will use CAS, if any

• Technical Requirements

• • Application Name and Software Used (Development & Database)
  • Functions and Features of the application
  • System Flow/s
  • Process Flow
  • Back-up Procedure, Disaster and Recovery Plan
  • Sworn Statement and Proof of System Ownership
  • List of Reports and Correspondences (that can be generated from the system with their description, purpose, and sample layout
  • Facsimile of System Generated Loose-leaf Books of Accounts and List thereof/Receipts/Invoices

Additional requirements in case of affiliated companies/sister companies, franchisees, and branches:

• Photocopy of previously issued permit for mother/sister company or another branch using the same system, if applicable
• Certification from the Computerized System Evaluation Team (CSET), which previously evaluated the approved system

Meanwhile, if you want to apply for System Enhancement/Modification, the following requirements must be submitted:

• Photocopy of the previously issued Permit to Adopt CAS or Components Thereof; and
• Letter to the BIR detailing the enhancement/modification to be made on the previously approved CAS or Components Thereof
  

Step 3 Wait for Your Acknowledgment Certificate 

After submitting your CDR with complete documents, an Acknowledgement Certificate will be issued after three (3) business days. According to BIR, Permit to Use (PTU) are no longer needed. Once you receive your Acknowledgement Certificate, you can use your chosen system or software immediately. Also, a system demo is no longer required as BIR: Application for authority to use CAS must be filed before the system is used.

Keep in mind that the BIR might modify these requirements in the future. It is advisable to verify with an authorized representative from the BIR before completing your registration.

A BIR-CAS Compliant Business with IT Group, Inc. and NetSuite Cloud ERP 

To help you comply with this government regulation, IT Group, Inc. and NetSuite co-created a cloud-based solution to issue e-receipts and e-invoices, be BIR Computerized Accounting System (CAS) accredited, and transmit daily sales. This system is also flexible enough to comply with requirements for document storage, calculating the correct taxes, and including digital signatures where necessary. It also has multicurrency and multilingual support capabilities for businesses that expand internationally. It also allows you to implement controls and procedures to support your accounting policies, accountable forms, and system flow. 

NetSuite’s Invoice Management Feature also helps companies automatically process invoices they receive from their suppliers. When a purchase order, receipt, and bill have been entered or received electronically, NetSuite executes a three-way match to correlate the documents for approval.

On the other hand, IT Group, Inc. developed a sales data transmission system (SDTS) that supports both cloud and on-premise implementation options designed and developed under the BIR API development guide. 

Venturing Together With Top IT Solution Companies in the Philippines 

IT Group, Inc. is one of the leading IT Solution companies in the ASEAN region, partnered with Oracle NetSuite, that delivers a flexible business management solution that leverages automated generation of e-invoices and e-receipts to boost efficiency, reduce errors, and improve cash flow that empowers CFOs, COOs, and finance and accounting managers to lead a government-compliant business confidently.

At the recent event of ITG in Bacolod, Rubie Grace Villamor, ITG’s Head of Business Management Solutions, talked about the importance of Compliance Towards Sustainable Business in which she highlighted the value of having a strategic tool such as Oracle NetSuite ERP that champions sustainability and visibility in your operational and financial data all while maintaining the integrity of records necessary for regulatory compliance in BIR Computer Accounting System and E-Invoicing. 

While NetSuite functions as a powerful tool for handling financial data and ensuring BIR CAS compliance, it is imperative to collaborate closely with the Bureau of Internal Revenue or IT consultants, such as IT Group, Inc. Our team of Tech Experts can assist you from navigating the technical intricacies to actively participating in meetings with a  BIR representative, demonstrating a commitment to providing businesses with end-to-end assistance.

For a comprehensive guide on your BIR CAS Application, you may visit here. If you want to learn more about the advantages of a Computerized Accounting System (CAS), download our free e-book here.