Ever received a BIR notice and suddenly worried about whether your inventory records are correct? Marami ring negosyo sa Pilipinas ang nakararanas ng parehong pressure, especially those in manufacturing, retail, or import/export where accurate stock reporting is essential.
One key requirement is the annual inventory list, a document that often causes confusion because of its strict format, details, and deadlines. Errors or missed information can easily lead to penalties and compliance issues.
This guide explains everything you need to know about the BIR inventory listing, including what to include and how to avoid common mistakes. If you want a system already accredited by BIR, you can try HashMicro BIR Accredited Inventory Software and request a free demo before reading further.
Let’s get started and find out!
Table of Contents
Key Takeaways
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What is the Inventory List?
The inventory list is a detailed record of a company’s stock, including raw materials, work-in-progress, finished goods, and other items on hand at the end of the financial year. In the Philippines, companies must submit this document annually as part of their BIR reporting requirements.
The Bureau of Internal Revenue (BIR) oversees tax collection and ensures businesses report accurate financial data. Since inventory affects taxable income, the BIR uses the inventory list to verify stock values. This is why the document must follow the proper format and contain complete details.
More than just a compliance requirement, the inventory list supports your financial statements and helps maintain transparency in asset reporting. Many businesses struggle with the BIR-required format, which dictates how inventory data must be organized and submitted.
Compliance & Penalties for the Inventory List BIR Every Business Should Know
Submitting an accurate inventory list is essential for BIR compliance, as it helps verify your company’s taxable income. Proper reporting reduces the risk of discrepancies that may trigger audits. Understanding these rules protects your business from penalties and keeps operations smooth.
Why compliance matters in submitting the inventory list
BIR inventory list compliance is mandatory because it prevents legal issues and supports accurate financial planning. A correct list reduces the risk of penalties and reporting errors that may affect tax results. Although the format may seem complex, following it strengthens your long-term stability.
Penalties for non-compliance with inventory list BIR requirements
Ignoring BIR inventory list rules can lead to costly penalties and unwanted audits. Late or inaccurate submissions may harm your business reputation and disrupt important processes. Staying compliant ensures smooth operations, easier tax clearances, and fewer risks for your company.
What to Include & Exlude in the Inventory List BIR Requirement
Preparing your inventory list correctly is essential to meeting BIR requirements and avoiding reporting errors. Knowing which items belong in the list and which ones must be excluded helps ensure accuracy and keeps your business compliant.
What should be included in the inventory list?
When preparing the inventory list BIR requires, you must include only stock-related information to avoid omissions or inconsistencies. The list must show essential details that confirm the accuracy of your year-end inventory records.
Items to include:
- Description of goods or inventories
- Quantity on hand
- Inventory types
- Unit measurements
- Total cost of all items at year-end
In 2023, BIR issued RMC No. 8-2023 to simplify submissions and reduce paperwork from the old RMC No. 57-2015. The update introduced digital submissions, clearer guidelines, and easier processing for businesses of all sizes.
Key updates under RMC 8-2023:
- No printed copies needed; digital files are now required
- Submission via labeled USB flash drive
- Must include a notarized Sworn Declaration from an authorized representative
- Third-party submissions need an SPA, Secretary’s Certificate, or Board Resolution
Manually organizing Annex A to C reports and spreadsheets is time-consuming. If filling out the BIR inventory list slows down your process, using inventory software for manufacturing can automate formatting and calculations. You only enter your data once, and the system handles the rest. Try it through the free demo banner below.
What should not be included in the inventory list?
Your BIR inventory list must stay focused on actual saleable or production-related items. Excluding non-inventory assets helps you avoid errors, prevents confusion during review, and keeps financial records clear and compliant.
Items to exclude:
- Office supplies: Stationery, cleaning items, and daily consumables
- Capital assets: Machinery, buildings, and office furniture
- Depreciated assets: Written-off items not part of sales operations
Keeping these out of your inventory list ensures proper categorization and smoother BIR review. It also strengthens your financial tracking and prevents discrepancies in your records.
Read More: Top Construction Inventory Management Software
When Should the Inventory List Be Submitted?
The submission of the inventory list to the Bureau of Internal Revenue (BIR) is a crucial annual requirement for businesses in the Philippines. Inventory lists must be submitted within 30 days after the end of the company’s financial year.
For businesses following the regular calendar year, the deadline is typically January 30th of the following year, aligning with the submission of annual financial reports. However, companies with a different fiscal year should adjust their submission date accordingly.
The BIR has provided sample templates for the inventory reports and notices, which can be downloaded from their website, or download here, as we’ve also provided samples for Annex A and C:
Download BIR Inventory List Template
You can submit your inventory report and/or notice in one of these ways:
- Through the BIR’s online Taxpayer Registration-Related Applications (TRRA Portal).
- By emailing the Compliance Section of your Revenue District Office (RDO).
- By manually submitting it in person to the Compliance Section of your RDO.
These rules came into effect on June 14, 2024, after being published on the BIR’s website.
Additional Reporting Requirements
Beyond the annual inventory list BIR submission, companies in industries like manufacturing, retail, real estate, and construction must also meet additional reporting requirements under RMC No. 57-2015. The key reports and formats include:
- Monthly or Quarterly Inventory Summaries: Businesses, especially those with large stock volumes or in regulated sectors, may need to submit periodic inventory movement reports and implementing periodic inventory system.
- Inventory Valuation Reports: Disclosures on valuation methods, such as FIFO, LIFO, or weighted average, are required to maintain consistency with inventory data.
- Sector-Specific Reports and Formats:
- Annex A (Manufacturing, Merchandising, or Retailing): Inventory of merchandise, raw materials, goods in process, and finished goods.
- Annex B-1 (Real Estate): Inventory of saleable units, including costs per project, and trade receivables reconciliation.
- Annex C (Construction): Schedules of outstanding receivables (beginning and ending) and realized gross profit per project.
4. Supporting Documentation: Businesses should retain records such as purchase receipts, invoices, and delivery notes to validate their submissions.
5. Submission of Soft Copies: Reports must be submitted on a properly labeled DVD-R, accompanied by a Notarized Certification signed by an authorized representative. This certification confirms the accuracy of the data, as per the provided template in RMC No. 57-2015.
Keeping up with these requirements and maintaining well-organized records is essential for smooth compliance. Using automated solutions can simplify inventory tracking and generate BIR-compliant reports, reducing manual effort and minimizing errors.
HashMicro : The Solution for Your BIR Inventory List Submission
Submitting inventory reports to the Bureau of Internal Revenue (BIR) can be time-consuming and confusing. With HashMicro’s Inventory Software, you can make this process faster and easier. Ang system namin ay kayang mag-track ng inventory mo in real-time at gumawa ng accurate reports automatically.
Instead of manually preparing your inventory list, HashMicro inventory management system automates the entire process. The system allows you to keep accurate records, customize your inventory reports based on BIR templates, and submit them in the required format. This ensures compliance with BIR regulations without any hassle.
By using HashMicro, you save time, reduce errors, and focus on growing your business. With features like barcode inventory system and real-time tracking and automated reporting, you get everything you need to meet BIR requirements effortlessly.
Conclusion
In summary, the inventory list BIR requirement is more than just another compliance checkbox; it plays a crucial role in financial transparency and operational accuracy for your business. Understanding what to include, what to omit, and when to submit your inventory list helps you maintain compliance and avoid unnecessary penalties.
Automating your inventory management with reliable software like HashMicro’s Inventory software can make this compliance process seamless.
Our inventory management software not only keeps your records accurate but also provides real-time insights, customized reporting, and automated reminders to help you stay ahead of submission deadlines.
If you’re ready to streamline your inventory management and avoid compliance hassles, consider a free demo of HashMicro’s solution today!
Frequently Asked Questions (FAQ) about Inventory List of BIR
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What is an inventory list for BIR?
The inventory list for BIR is an official record that provides a detailed breakdown of a company’s inventory at the end of the fiscal year. It’s required to ensure accurate reporting for tax purposes.
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Can I submit the inventory list digitally?
Yes, the BIR allows digital submissions, but the format and labeling must adhere to their requirements.
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How can HashMicro help with inventory list compliance?
HashMicro’s Inventory Management System automates inventory tracking, provides customized reports, and offers reminders for compliance deadlines, making it easier to prepare an accurate BIR-compliant inventory list. Aside from that, HashMicro also provides BIR POS and accounting software for end-to-end business processes.
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What should not be included in the BIR inventory list?
Items such as office supplies, capital assets, and depreciated assets should not be included as they do not qualify as inventory.
