Books of Accounts: What Every Philippine Taxpayer Needs to Know
Ogie Galicia· March 23, 2026 · 6 min read
Books of Accounts: What Every Philippine Taxpayer Needs to Know
If you run a business in the Philippines, you’re required by law to keep books of accounts. It doesn’t matter how big or small your business is. If you’re registered with the BIR, you need proper records.
This guide is based on RMC No. 29-2019, which lays out the rules for keeping, maintaining, and registering books of accounts under the National Internal Revenue Code (NIRC).
Who needs to keep books?
Short answer: everyone with a BIR registration.
If your business is required to pay internal revenue taxes, you must maintain books of accounts. This applies to corporations, partnerships, sole proprietors, and freelancers alike. No exceptions.
What format should your books be in?
You have three options:
| Format | What you need |
|---|---|
| Manual Books of Accounts | No permit needed, but all entries must be handwritten |
| Loose Leaf Books of Accounts | Requires a Permit to Use from the BIR |
| Computerized Books of Accounts (CAS/CBA) | Also requires a Permit to Use |
A couple of things to watch out for:
- You can only keep one set of books. Maintaining two or more sets is not allowed.
- If you use manual books, you can’t paste or glue printouts onto the pages. Everything must be handwritten.
Which books do you actually need?
This depends on whether you’re VAT-registered or not.
If you’re VAT-registered, you need 6 books:
- General Journal
- General Ledger
- Cash Receipts Journal
- Cash Disbursements Journal
- Subsidiary Sales Journal
- Subsidiary Purchases Journal
If you’re non-VAT or on percentage tax, you need 4 books:
- General Journal
- General Ledger
- Cash Receipts Journal
- Cash Disbursements Journal
You can also keep subsidiary books if your business needs them. Once you do, they become part of your accounting system and follow the same rules.
When should you register your books?
| Format | Deadline |
|---|---|
| Manual | Before the filing deadline of your first quarterly or annual ITR, whichever comes first |
| Loose Leaf | Within 15 days after the end of the taxable year or when you close your business |
| Computerized | Within 30 days from the close of the taxable year or business closure |
You register at your RDO, LTAD, ELTRD, LTD-Cebu, or LTD-Davao.
How long should you keep your records?
Under RMC 29-2019, the retention period was set at 10 years. The first 5 years required hard copies, after which you could switch to electronic storage.
The Ease of Paying Taxes Act (R.A. 11976), which took effect in 2024, shortened this to 5 years.
The one exception
If you have a pending tax protest or refund claim, you need to hold on to those records until the case is fully resolved, even if it goes past the retention period.
How you should preserve them
| Book Format | How to keep them |
|---|---|
| Manual or Loose Leaf | Hard copies only |
| Computerized | Electronic copies are fine |
How the retention period has changed over time
| Period | How long | Basis |
|---|---|---|
| Original NIRC | 3 years | Sec. 235, NIRC |
| 2013 to 2023 | 10 years (5 years hardcopy, then electronic) | RR 17-2013 / RMC 29-2019 |
| 2024 onward | 5 years | R.A. 11976 (EOPT Act) |
Where to keep them and in what language
- Your books must stay at your place of business at all times
- Keep everything in good condition, along with your receipts, vouchers, and supporting documents
- They must be written in Filipino, English, or Spanish
If you also keep records in another language, you’ll need to provide a sworn translation done by your bookkeeper or manager.
Can the BIR check your books?
Yes, but there are limits.
The BIR can examine your books at your office or at their office. For income tax purposes, they can only do this once per taxable year.
They can come back for additional checks only in specific cases:
- They suspect fraud or found irregularities
- You asked for a reinvestigation
- They’re verifying your withholding tax compliance
- They’re checking capital gains tax
- The Commissioner is exercising power under Sec. 5(B) to get info from third parties
If your organization is tax-exempt or enjoys tax incentives, the BIR can also examine your books to make sure you’re meeting the conditions of that exemption.
Do you need a CPA to audit your books?
Only if your gross annual sales, earnings, receipts, or output exceed P3 million. In that case, you must have your books audited yearly by an independent CPA.
Your income tax return will also need an Account Information Form (AIF) that includes data from your balance sheets, profit and loss statements, and income-producing property schedules.
The CPA’s working papers and your audited financial statements follow the same retention rules.
What if you’re closing your business?
If you’re retiring from business, you need to submit your books to the BIR Commissioner within 10 days.
If your corporation or partnership is planning to dissolve, you must notify the Commissioner first. You won’t be allowed to dissolve until you’re cleared of all tax liabilities.
Key BIR issuances to know
These are the circulars and regulations that spell out the rules:
| Issuance | What it covers |
|---|---|
| RMC 29-2019 | How to keep, maintain, and register books of accounts |
| RMC 11, 12, 13, 19-2024 | Initial guidelines for the EOPT Act |
| RMC 77-2024 | Clarifications on invoicing under RR 7-2024 |
| RMC 5-2025 | Updates that align earlier circulars with the EOPT Act |
Resources
- R.A. 11976 (Ease of Paying Taxes Act) full text
- BIR EOPT official page
- RR 7-2024 (Registration, invoicing, and books of accounts)
- Tax and Accounting Center: Books of Accounts in the Philippines
- Tax and Accounting Center: Preservation of Books of Accounts
- Grant Thornton PH: Updates on Preservation of Books of Accounts
The bottom line
The rules on books of accounts come primarily from RMC 29-2019 and the NIRC. Keep your books in the right format, register them on time, preserve them for the required period, and have them ready if the BIR comes knocking. Whether you’re a freelancer or a large corporation, the requirements are the same.