Difference Between a Sales Invoice and an Official Receipt
Section 237 of the Tax Code of the Philippines, the Bureau of Internal Revenue (BIR) mandates every business entity to issue an official receipt and/or sales invoice for every transaction of products, property, or services. As a supporting document, the invoice and/or receipt are used.
This article will explain the distinction between a sales invoice and an official receipt, along with when to issue it.
Depending on the sort of sale they cover, each document is different. Official receipts are used for the sale of services or the leasing of property, whereas sales invoices are used for the sale of goods or property. Both are regarded as the main proof of these transactions. things provide as certain proof that things actually occurred. Commercial receipts, such as order slips, billing invoices, and purchase orders, are simply supplemental and not required for tax filing.
Revenue Regulation No. 18-2012 classifies sales invoices and official receipts into principal and supplementary.
1. Principal Receipts/Invoices
There are four types of primary invoices or receipt[ts, each of which may contain VAT or non-VAT. These written evidence might originate from BIR-registered cash registers or BIR-approved receipt books.
VAT TAXPAYER | NON-VAT TAXPAYER |
1. VAT Sales Invoice Used for either cash or credit, this invoice includes: - A seller's obligation to pay output VAT for a specific transaction - Buyer's claim for input tax | 1. Non-VAT Sales Invoice Used for either cash or credit, this invoice includes: - Seller issues Sales Invoice as written proof of sales of goods or properties. - Serves as the basis of seller’s percentage tax liability |
2. VAT Official Receipt Used as a basis for the buyer's input VAT claim and the seller's output VAT. this invoice includes: - A seller's obligation to pay output VAT for a specific transaction - Buyer's claim for input tax | 2. Non-VAT Official Receipt Acknowledgment of the monetary payment for the services provided. - Issued by the seller to the buyer as proof of the purchase or lease of an item or service. - It indicates the proportion of tax that the seller owes for that specific transaction. |
Note: A sales invoice must be issued by the taxpayer whenever it sells products or real estate, regardless of whether the transaction is for cash or credit. Upon receiving cash from the buyer as payment if the sale was made on credit, the seller will subsequently issue a collection receipt. The cash invoice serves if the sale was paid in cash.
Note: When there are no tangible products or goods involved when the taxpayer is selling or leasing property, a sales invoice is not required.
In the Philippines, sellers must charge buyers the necessary input VAT on goods they have acquired. Sellers are then required to submit this VAT as output VAT to the BIR.
- The portion of VAT from sales that is known as output VAT. Businesses include this as a liability account on their balance sheets, while the customers get it in the form of input VAT, which is an asset.
- VAT that is added to purchases is known as input VAT. It comes from a customer's out-of-pocket costs.
2. Supplementary Receipts/Invoices
Additionally known as supplemental receipts and business invoices
Explain the sale or exchange of products and/or services between the seller and the customer. It is used in the book of accounts of a business taxpayer for recording, monitoring, and control reasons. Additionally establishes the existence of a contract for the transfer, sale, or delivery of goods and services.
There are several forms of supplemental receipts and invoices, including:
Delivery receipts
Order slips
Debit and/or credit memo
Purchase order
Job order
Provisional/temporary receipt
Acknowledgement receipt
Collection receipt
Cash receipt
Bill of lading
Billing statement
Statement of accounts
The receipt or invoice can be typed, digitally created, or written by hand as long as it is given to clients as part of regular company operations.
Supplementary receipts/invoices cannot be used as evidence of input VAT owing by clients for VAT purposes.
SAMPLE RECEIPTS:
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