THE Bureau of Internal Revenue (BIR) said it is exempting small farmers from issuing receipts and invoices.
In its latest Revenue Regulations, the BIR exempted agricultural producers from the requirement of issuing principal and supplementary receipts or invoices on the sale of agricultural food products.
“Provided, that the gross sales/receipts for the year shall not exceed P1 million,” it added.
It defined agricultural producers as suppliers, sellers, producers, contract growers and millers of agricultural products whose annual gross sales or receipts for tax purposes do not exceed P1 million.
Agricultural products refer to products in their original state which are generally used in food for human consumption. These range from farm produce, livestock, poultry, marine products, ordinary salt, and agricultural inputs.
“The agricultural products will still be covered by these revenue regulations even if they have undergone simple processes of preparation or preservation for market, such as freezing, drying, salting, broiling, roasting, smoking, or stripping,” it added.
Agricultural producers will also now be required to record their sales transaction in a “simplified sales book.”
If the annual gross sales or receipts of the producer surpasses the P1 million mark, it will be required to issue official receipts or invoices for every subsequent transaction valued at P100 or more.
Producers are also required to register with the BIR, along with their simplified sales book.
The regulations also state that “income payments made by buyers or purchasers engaged in trade or business to agricultural producers not exceeding the cumulative amount of P300,000 within the same taxable year, shall be exempt from withholding tax.”
However, income payments that exceed the P300,000 limit are subject to 1% withholding tax. — Luisa Maria Jacinta C. Jocson