BIR requires taxpayers to keep books for 10 yrs

MANILA, Philippines - The Bureau of Internal Revenue is requiring taxpayers to keep their books of accounts and accounting records for a longer period of 10 years instead of three years.

The move is aimed at ensuring that the correct revenues are timely and completely reported and only deductions authorized by law are properly claimed in returns supported by accounting entries in the books of accounts and by contracts, invoices and receipts.

“The reason for requiring the books of accounts to be preserved is to ensure that all taxes due to the government may be readily and accurately ascertained and determined any time of the year,” the BIR said in Revenue Regulations 17-2013.

The BIR said that a taxpayer’s accounting records are needed beyond the three-year period of limitation of assessment if he or she is under investigation for any fraud or omission in the returns.

If there is a pending tax case or claim for tax credit/refund of taxes, then the books and records should be kept until the case is finally resolved.

Aside from this, the BIR said it may conduct periodic audits into the books and records of tax exempt organizations or grantees of tax incentives to determine their compliance with the conditions under which they have been granted tax exemption.

All corporations, companies, partnerships or persons required by law to pay internal revenue taxes are required to keep all their books of accounts including the subsidiary books and accounting records for a period of at least 10 years from the date of the last entry in each book and shall be subject to examination at any time by internal revenue officers.

All books, registers and other records and vouchers and other supporting papers required by the BIR must be  kept at all times at the place of business of the taxpayer and  upon demand, the same must immediately be produced and submitted for inspection.