RR No. 12-2023: Implements Section 237 of the National Internal Revenue Code of 1997, as Amended, on the issuance of receipts or sales or commercial invoices by Agricultural Producers

Key points

1. Exemption from receipts and invoices. Agricultural Producers are exempt from issuing principal and supplementary receipts or invoices on sales of Agricultural Food Products if gross sales or receipts for the year do not exceed One Million Pesos (₱ 1,000,000.00). They may also sell other goods or services if aggregate sales stay within that amount, the primary activity is selling Agricultural Food Products, and other sales do not exceed thirty percent (30%) of aggregate sales.
2. Simplified Sales Book. Each sale is recorded in a Simplified Sales Book showing date, description, buyer details if in business, amount of sales, tax withheld and net amount received. The book is registered with the BIR and may be a simple logbook or notebook.
3. When sales exceed ₱ 1,000,000.00. Once annual gross sales or receipts exceed ₱ 1,000,000.00 at any time in the taxable year, the producer must issue official receipts or sales invoices for each later transaction valued at ₱ 100.00 or more. In the first year of operations or one year from registration, BIR-printed receipts or invoices from the RDO may be used, and ATP-printed ones are required after.
4. Buyer certificates. A buyer engaged in trade or business issues BIR Form No. 2304 or 2307 in two (2) copies for each purchase. The form serves as the substituted official receipt or sales invoice and as evidence to substantiate the buyer’s deductible expenses.
5. Withholding tax. Income payments up to the cumulative ₱ 300,000.00 within the same taxable year are exempt from Withholding Tax, and BIR Form No. 2304 is issued. Payments above that cumulative amount are subject to One Percent (1%) Withholding Tax, and BIR Form No. 2307 is issued.
6. Records and returns. Simplified Sales Books are kept for ten (10) years, with hardcopies retained for the first five (5) years. Producers file quarterly and annual income tax returns, and buyers file BIR Form No. 1601-EQ with the Quarterly Alphabetical List of Payees.

Who is affected

• Agricultural Producers
• Buyers or purchasers engaged in trade or business

Deadlines and effectivity

• Annual gross sales or receipts limit: ₱ 1,000,000.00
• Receipts required for transactions of ₱ 100.00 or more once the limit is exceeded
• Books kept for ten (10) years