BIR rules for electronic storage of documents.
Recently Implemented BIR rules for electronic storage of documents;
The Bureau of Internal revenue (BIR) - issued Revenue Regulations (RR) No. 17-2013 - requires taxpayers to preserve their books of accounts, including subsidiary books & other accounting records, for a period of ten years.
- 10 Year Retention (5 years with paper and the last 5 years maybe stored in electronic format)
- The Independent Certified Public Accountant (CPA) who audited the records and certified the financial statements of the taxpayer should follow the same.
- There are rules as far the Electronic Storage System is concerned. See Section 2-A.
Section 2-A ELECTRONIC STORAGE SYSTEM
An electronic storage system to be used by the taxpayer or independent CPA for preserving books of accounts and other accounting records shall:
1) Ensure an accurate and complete transfer of the images of the hardcopy of the books of accounts, including subsidiary books and other accounting records to an electronic storage media; and
2) Index, store, preserve, retrieve, and reproduce the electronically stored images of the hardcopy of the books of accounts, subsidiary books and other accounting records.
The electronic storage system must include:
1) Reasonable controls to ensure the integrity, accuracy, and reliability of the electronic storage system;
2) Reasonable controls to prevent and detect any unauthorized creation of, addition to, alteration of, deletion of, or deterioration of electronically stored books of accounts, subsidiary books and other accounting records;
3) An inspection and quality assurance program evidenced by regular evaluations of the electronic storage system, including periodic checks of electronically stored books of accounts, subsidiary books and other accounting records;
4) A retrieval system that includes an indexing system; and
5) The ability to reproduce legible and readable hardcopies of electronically stored books of accounts, subsidiary books and other accounting records.
A taxpayer’s electronic storage system that fails to meet the requirements of this Section shall maintain and preserve the original hardcopy of their books of accounts, subsidiary books and other accounting records.
What this means:
Tax payers can benefit by going electonic. Use a document management system to store records.
Store off-site and ensure the desctruction of paper copies after the prescribed period to save space and storage costs.
Stop photocopying every document when a copy is needed. Just use the electronic ones.
Click here to to download the ruling: