REVENUE REGULATION 11-2004

1. REVENUE REGULATION 11-2004 RR 11-2004: The Accreditation, Registration and Use of Cash Register Machines (CRM), Point of Sale (POS) Machines and/or Other Business Machines Generating Receipts/Invoices

2. REVENUE REGULATION 11-2004 OBJECTIVES • Re-focus the goals and objectives of the CRM/POS registration process to the effective supervision and control by the Bureau of the use of such machines; • Simplify registration procedures and requirements for the issuance of permits; • Reduce administrative costs in the implementation of the registration process; and • Efficient collation of accurate data thru availability of CRM/POS database repository

3. REVENUE REGULATION 11-2004 COVERAGE • Cash Register Machines; • Point of Sales Machines; • All other Cash Register Machines/POS Machines such as but not limited to: • Taximeters • Handheld or Mobile Devices • CRM/POS connected to CAS • Stand-alone CRM/POS • Other Sales Machines

4. REVENUE REGULATION 11-2004 General Provisions New Permits for Use of CRMs, POS and Similar Machines. –only machines that are compliant with the machine specifications enumerated in this regulation shall be issued permits to use. Validity of Previous Permits to Covering Machine Currently in Use. – All duly existing permits to use cash register machines issued before the effectivity of these Regulations shall remain valid until revoked by the CIR Immediate use of CRM/POS Machines. – Machines may be used immediately by business establishments w/o prior inspection & authorization provided the conditions are met 4

5. Steps on Applying for Accreditation and Registration for Cash Register Machine (CRM) and Point-of-Sales (POS) Bureau of Internal Revenue 1

6. Application for Accreditation of Suppliers BIR grants Accreditation Dealer/Supplier applies forAccreditation 2

7. Applies to the BIR office (RDO) where his Head Office is duly registered Dealer/Supplier submits Sworn Statement with required attachments to BIR BIR evaluates through the Accreditation Board If compliant, BIR issues Accreditation Certificate with assigned Accreditation Number Otherwise, dealer/supplier re-configures software/hardware of the machine model to meet BIR’s requirements Application for Accreditation of Suppliers 3

8. Sworn Statement 4

9. Attachments to Sworn Statement • A copy of the machine distributor/dealer/vendor’s proof of payment (BIR Form 0605) of current Annual Registration Fee; • Copies of the Certificate of Registration of Business Name/Style of the machine distributor/dealer/vendor issued by the BIR and Bureau of Domestic Trade and Industry, and in case of corporations and partnerships, a copy of the Certificate of Registration issued by the SEC; • A sample receipt generated by the machine legibly showing the data required enumerated in this regulation; • A sample receipt showing the reading of the daily sales and accumulated grand total recorded in the machine; 5

10. Attachments to Sworn Statement • A demo or evaluation copy of the software to be used in the actual operation of the POS machines; • The system description and design/structure of the machine being submitted for accreditation; • The master reset key/password, whichever is applicable, that can be used in reading sales data of all units of the particular model being accredited; • Machine brochure; and • Operating manual 6

11. Application for Registration of CRM/ POS BIR issues Permit to use for Cash Register Machine or Point-of-Sales Accredited Dealer/Supplier applies for Registration of Machines sold 7

12. Modes of Application for Registration (1) Manual • Applies to the BIR office (RDO) where his Head Office is duly registered (2) Electronic • Applies through electronic facility • SMS • Email • Web 8

13. (1) Manual Applies to the BIR office (RDO) where his Head Office is duly registered Accredited Dealer/Supplier submits requirements stated in Revenue Regulations 10-99: Joint Sworn Declaration by Taxpayer/Buyer and Dealer/Supplier Attachments (information of Taxpayer/Buyer) such as Annual Registration Fee Return, COR, sample receipt, operating manuals, etc. BIR issues FinalPermit to Use to Accredited Dealer/Supplier Modes of Application for Registration 9

14. (2) Electronic Applies through electronic facility SMS Email Web SMS (Short Messaging Service) Use of mobile device (cellphone, PDA with phones, etc.); otherwise known as “texting” Email (Electronic Mail) Use of Mail clients (Microsoft Outlook, web-based mails like Yahoo, Hotmail, etc) with internet connection Web (BIR website) Use of Web Browsers (Internet Explorer, Netscape, Mozilla, etc) with Internet connection Modes of Application for Registration 10

15. Accredited Dealer/Supplier sends a text message to a special access number for Globe and Smart CRM/POS<SPACE>BUSINESS NAME*ADDRESS*TIN Where: TIN is TIN and Branch Code (000 if Head Office) Accredited Dealer/Supplier receives confirmation message from Globe/Smart indicating a successful enrollment to the system and that he can proceed to register the machines sold to taxpayer/buyer Accredited Dealer/Supplier sends a text message to a special access number for Globe and Smart CRM/POS<SPACE>TIN OF THE BUYER*VAT/NVAT NO.*MACHINE ACCREDITATION NO.*SERIAL NO.*BRAND*MODEL*PRESENT READING*DATE OF READING Where: TIN is TIN and Branch Code (000 if Head Office) Accredited Dealer/Supplier receives confirmation message from Globe/Smart indicating a successful registration of all applied machines and that he can proceed to print the systems-generated Final Permit to Use Accredited Dealer/Supplier prints the systems-generated Final Permit to Use through the web channel SMS Registration SMS Channel 11

16. Accredited Dealer/Supplier downloads the file attachment in the web facility Attachment includes the ff. information in tabular format: TIN of the Taxpayer-Buyer VAT or non-VAT number of the Taxpayer-Buyer Machine Accreditation Number Serial Number, brand and model of the machine sold Present Reading Date of Reading Accredited Dealer/Supplier sends an email to bir_accreditation@bir.gov.phwith said attachment Accredited Dealer/Supplier receives an email confirmation indicating a successful registration of all applied machines and that he can proceed to print the systems-generatedFinal Permit to Use Accredited Dealer/Supplier prints systems-generated the Final Permit to Use through the web channel Email Registration Email Channel 12

17. Email Registration e-mail attachment 13

18. Accredited Dealer/Supplier logs on to BIR website and registers machines sold to taxpayer/buyer through the Application for Registration page (for dealer/supplier). After submission of the electronic application form (checklist), dealer/supplier gets a confirmation message and he is directed to the page where he can print the systems-generated Final Permit to Use Accredited Dealer/Supplier prints the systems- generated Final Permit to Use. Accredited Dealer/Supplier can view a summary page on all his approved registered machines. Web Registration Web Channel 14

19. Dealer/Supplier – Taxpayer/Buyer Relationship Accredited Dealer/Supplier issues machine to Taxpayer with Permit to Use 15

20. If you accredit your machines with us… You get away from the tedious process of manual application no more required ‘systems demo’, provided, that the machine brand/model being applied for passed through previous accreditation You get away from the hassles of long processing time of your application you get free advertisement to prospective clients Therefore, being an Accredited Dealer/Supplier… You’re on edge! You expect to gain more buyers in the long run. Benefits of Accreditation 16

21. New Directions ... Electronic Sales Reporting System Sales RR 5-2005

22. Background Apriority area of tax administration reform and modernization is effective supervision and control of CRMs and POS used by businesses. • ACCREDITATION OF sales generating receipts/invoice machines prior to use • Cash Register Machines (CRM) • Point of Sales Machines (POS) • Taximeters • Handheld or Mobile Devices Improve thequality of taxpayer service, by allowing businesses to use their sales machines without prior authorization from the Bureau RESULT Effective control and supervision of POS/CRM Periodic Sales Report

23. What is eSales? Electronic Sales Reporting System (eSales) • is the electronic process of enrolling and reporting the monthly sales of taxpayers engaged in business using CRM/POS or any other similar device through SMS, e-mail or Web. Electronic-Enrollment • is the process of registering cash register, POS (point-of-sales), or any sales generating receipt/invoice machine including mobile and handheld devices classified as “stand alone” or linked to a computerized system whether or not registered pursuant to RR No. 11-2004. Electronic-Sales Reporting - is the process of reporting the gross monthly sales per machine on or before the 10th calendar day of the following month starting March 10, 2005.

24. Sales Available Channels for 1 SMS Channel Single Storage 2 e-mail Channel Taxpayer 3 Web Channel

25. eSales Requirements Definition Short Messaging System (SMS) Taxpayer may enroll through text to BIR access number via SMS the TIN, Machnie Serial Number and BIR Permit Number following the format: CRM <space>REG<space> <TIN+Branch Code>*<SN>*<PN> Sales Reporting shall follow the format : CRM<space>SALES<space><MIN>* <MON_SALES>*<ER> SEND: Globe – 2699 Smart - 269 Electronic Mail Taxpayer may enroll and report the machine via this e-mail address: crmpos@bir.gov.phas file attachment. BIR Web Facility Taxpayer may enroll and report the machine via the BIR website: www@ bir.gov.ph or the BIR Portal at : www.my.bir.gov.ph

26. . What are the benefits of eSales? The system is: Convenient and Easy • 3 Alternative channels of Enrolling and Reporting • Available 24 hours a day, 7 days a week • Accessible anytime and anywhere • Quick Processing • Secured and Responsive Facility

27. eSales Target Timeline þ -completed K - in progress L - not started 2005 K L • Jan 24 • KICK-OFF LAUNCH • Feb 25 • ENROLLMENT / REGISTRATION L • March 5 • SALES REPORTING L • 2ND Qtr • WEB FACILITY