What is the Ease of Paying Taxes Act?
RA 11976 amends the National Internal Revenue Code to simplify compliance. It was signed on 5 January 2024 and took effect 15 days after publication.
“the EOPT Act took effect on January 22, 2024”
What changed under the EOPT Act: before vs after
| Area | Before EOPT | After EOPT | Rule |
|---|---|---|---|
| Where to file and pay | Tied to your RDO; 25% surcharge for the wrong venue | Any AAB, any RCO or an authorized tax software provider; wrong-venue surcharge abolished | RR 4-2024 |
| Taxpayer size classes | None in the Tax Code | Micro < ₱3M; small ₱3M to < ₱20M; medium ₱20M to < ₱1B; large ₱1B and up (gross sales, net of VAT) | RR 8-2024 |
| Surcharge, micro and small | 25% | 10% (50% for fraud still applies) | RR 6-2024 |
| Interest, micro and small | 12% a year | 6% a year | RR 6-2024 |
| Information-return penalty, micro and small | ₱1,000 per failure, ₱25,000 cap | ₱500 per failure, ₱12,500 cap | RR 6-2024 |
| Compromise, micro and small | Full schedule | 50% off, but only for invoicing and printing violations (Secs. 113, 237, 238) | RR 6-2024 |
| Official receipts | Primary document for services | Invoice replaces the OR; OR supplementary only | RR 7-2024 |
| Invoice threshold | — | Non-VAT sellers: ₱500 or more per sale; VAT sellers: every sale | RMC 77-2024 |
| VAT on services | On gross receipts (when paid) | On gross sales (when billed) | RR 3-2024 |
| Output VAT on uncollected receivables | Not deductible | Deductible (Sec. 110(D)); conditions: check with your RDO | RR 3-2024 |
| VAT refunds | 90-day decision (since TRAIN); appeal only after a denial | Still 90 days, with low, medium and high-risk classes; appeal to the CTA also allowed if the BIR does not act in 90 days | Sec. 112(C); RR 5-2024 |
| Other refunds | — | 180 days to decide; 2 years to file | RR 5-2024 |
| ₱500 annual registration fee | Due every January | No longer payable from 22 January 2024; old CORs stay valid | RMC 14-2024; RR 7-2024 as amended by RR 11-2024 |
| Expenses without withholding (Sec. 34(K)) | Not deductible | Deductible, but the duty to withhold remains | RA 11976; RMC 60-2024 |
| Withholding by micro taxpayers | Required | Still required: the proviso exempting micro taxpayers (RA 11976 Sec. 8) was vetoed on signing, 5 January 2024 | RA 11976 veto message; DOF release |
| OFWs earning solely abroad | Not in the list of non-filers | Not required to file an ITR (Sec. 51(A)(2)(e)) | RA 11976 |
| Transfer of registration | — | Electronic or manual update; the auditing RDO keeps an ongoing audit | Sec. 236 as amended |
| Books retention | 10 years | 5 years | Sec. 235 as amended |
Sources: RA 11976; RR 3-2024, RR 4-2024, RR 5-2024, RR 6-2024, RR 7-2024, RR 8-2024, RR 11-2024. As of November 2026.
EOPT implementing revenue regulations
Six regulations were issued on 11 April 2024 and took effect on 27 April 2024.
| Regulation | Covers | What it means for you |
|---|---|---|
| RR 3-2024 | VAT and percentage tax | Services taxed when billed; output VAT credit on uncollected receivables |
| RR 4-2024 | Filing, payment and withholding | File and pay anywhere; eFPS users stay on eFPS |
| RR 5-2024 | Refunds | 180-day non-VAT refunds; risk-based VAT refunds from 1 July 2024 |
| RR 6-2024 | Micro and small penalties | 10% surcharge, 6% interest, ₱500 information-return fine |
| RR 7-2024 | Registration and invoicing | Invoice replaces the OR; no annual registration fee |
| RR 8-2024 | Taxpayer classification | Micro, small, medium, large by gross sales |
Issue and effectivity dates from the BIR digests and RR 11-2024. RR 11-2024 (13 June 2024) later amended the invoicing transition. File-and-pay-anywhere FAQs: RMC 87-2024.
EOPT effective dates timeline
5 January 2024
RA 11976 signed
22 January 2024
Act effective: file and pay anywhere, Sec. 34(K) repealed, no annual registration fee
27 April 2024
RR 3-2024 to RR 8-2024 effective: invoices replace ORs, micro and small penalties, classification
1 July 2024
RR 5-2024 refund rules apply to claims filed from this date
31 July 2024
Inventory of unused ORs to be converted due at the RDO
31 December 2024
Cash registers, POS and CAS reconfigured to print "Invoice" (extendable up to six months)
31 December 2026
E-invoicing deadline for covered taxpayers (RR 26-2025, under the later CREATE MORE law)
Reduced penalties for micro and small taxpayers
Micro and small taxpayers pay less than half the late-payment penalty of a regular taxpayer, as this example shows.
Which penalty rules apply to you?
1Find your gross sales
Business sales net of VAT, excluding compensation and passive income (RR 8-2024).
Under ₱20M: micro or small
Reduced rules
10% surcharge, 6% interest, ₱500 per information return, 50% off invoicing compromises.
₱20M and up: medium or large
Regular rules
25% surcharge, 12% interest, ₱1,000 per information return, full compromise.
- 1
Basic tax ₱10,000, paid 90 days late
Same return, two taxpayer classes.
- 2
Surcharge: 25% = ₱2,500 vs 10% = ₱1,000
Regular vs micro or small.
- 3
Interest: 12% × 90/365 = ₱295.89 vs 6% × 90/365 = ₱147.95
Computed on the basic tax.
- 4
Total: ₱12,795.89 vs ₱11,147.95
Before any compromise.
Late payment of ₱10,000, 90 days late
Regular taxpayer vs micro or small taxpayer
- Regular (25%, 12%)
- Micro or small (10%, 6%)
| Row | Regular (25%, 12%) | Micro or small (10%, 6%) |
|---|---|---|
| Surcharge | ₱2,500.00 | ₱1,000.00 |
| Interest | ₱295.89 | ₱147.95 |
| Surcharge plus interest | ₱2,795.89 | ₱1,147.95 |
What businesses must do now under EOPT
| Action | Who | Rule |
|---|---|---|
| Issue invoices, not ORs; stamp or convert leftover ORs | Every business | RR 7-2024; RR 11-2024 |
| Know your class from gross sales (net of VAT) | Every business | RR 8-2024 |
| Report output VAT on services when billed | VAT-registered service providers | RR 3-2024 |
| Stop paying the ₱500 registration fee | Everyone registered | RR 11-2024 |
| Check e-invoicing coverage before 31 Dec 2026 | E-commerce (except micro), LTS and large taxpayers, CAS/CBA users | RR 26-2025 |
| Show creditable withholding tax as a separate invoice line | Sellers whose buyers must withhold | RR 6-2026 (effective 16 Oct 2026); RMC 112-2026 |
| Keep withholding even though 34(K) is gone | Withholding agents | RMC 60-2024 |
| Keep books for 5 years | Everyone keeping books | Sec. 235 as amended |
See RR 26-2025 and RR 6-2026 (dated 25 August 2026). RR 6-2026 took effect on 16 October 2026, 15 days after its first publication on 1 October 2026 (BIR FAQ annexed to RMC 112-2026, Q3). Unused invoices may be used until consumed if stamped "Less: Withholding Tax" (RR 6-2026 Sec. 3). RMC 112-2026 (12 October 2026) gives e-invoicing and CAS/CBA systems until 31 December 2026, and point-of-sale systems and cash-register machines until 31 March 2027, to add the field. Invoicing details: Form 1906 guide.
Common mistakes about the EOPT Act
| Mistake | Consequence | How to avoid it |
|---|---|---|
| Still issuing "Official Receipts" | Treated as failure to issue an invoice | Switch to invoices |
| Paying the ₱500 fee to a fixer | Money lost | There is no fee |
| Replacing a COR that shows the fee | Wasted trip | Old CORs remain valid |
| Expecting a 50% compromise cut on late filing | Underpaying the settlement | The cut covers invoicing violations only |
Buod sa Tagalog
Ang Ease of Paying Taxes Act (RA 11976) ay umiral noong 22 Enero 2024. Puwede ka nang mag-file at magbayad sa kahit anong bangko, RDO o awtorisadong tax software. Invoice na ang pangunahing dokumento sa halip na official receipt, at wala nang ₱500 na annual registration fee. Mas mababa ang multa ng micro at small taxpayer: 10% na surcharge at 6% na interes.
Frequently asked questions
+What is the Ease of Paying Taxes Act (RA 11976)?
It is a 2024 law amending the Tax Code to make compliance easier. It allows filing and payment anywhere, replaces official receipts with invoices, creates micro, small, medium and large taxpayer classes, lowers penalties for micro and small taxpayers, changes VAT on services to a billing basis and removes the annual registration fee.
+When did the Ease of Paying Taxes Act take effect?
On 22 January 2024, as confirmed by RMC 60-2024. It was signed on 5 January 2024. The six implementing regulations, RR 3-2024 to RR 8-2024, were issued on 11 April 2024 and took effect on 27 April 2024, which is when invoices replaced official receipts.
+Are official receipts still valid under the EOPT Act?
Only as supplementary documents. From 27 April 2024 the invoice is the primary document for goods and services, and an OR cannot support input VAT. Leftover ORs may be used stamped as not valid for input tax, or converted into invoices by stamping 'Invoice'.
+Has the ₱500 BIR annual registration fee been abolished?
Yes. The fee disappeared when RA 11976 rewrote Section 236 of the Tax Code, and RR 11-2024 says taxpayers are no longer required to pay it. Certificates of registration that still show the fee remain valid and do not need to be replaced.
+Can I now file and pay taxes at any RDO or bank?
Yes. Under RR 4-2024 you may file and pay through any authorized agent bank, any Revenue Collection Officer or an authorized tax software provider, regardless of your RDO, and the 25% wrong-venue surcharge is gone. Returns are filed electronically; manual filing is for when platforms are unavailable.
+What are micro, small, medium and large taxpayers under the EOPT Act?
RR 8-2024 classifies by gross sales, net of VAT: micro, under ₱3 million; small, ₱3 million to under ₱20 million; medium, ₱20 million to under ₱1 billion; large, ₱1 billion and above. Only business income counts, not compensation or passive income.
+What penalty reductions do micro and small taxpayers get?
A 10% surcharge instead of 25%, interest of 6% a year instead of 12%, and a ₱500 information-return penalty capped at ₱12,500 a year. The 50% compromise reduction applies only to invoicing and printing violations, not to late filing or payment. Fraud still carries the 50% surcharge.
+Do OFWs still have to file an income tax return under the EOPT Act?
Not if they earn solely from abroad. RA 11976 added overseas Filipino workers and overseas contract workers whose income comes only from abroad to the list of individuals not required to file, in Section 51(A)(2)(e). An OFW with Philippine income, such as rent or business, may still need to file.
+What changed for VAT under the EOPT Act?
VAT on services is now based on gross sales when billed rather than gross receipts when paid, and a seller may deduct output VAT on uncollected receivables, subject to conditions in RR 3-2024. VAT refund claims keep the 90-day decision period but are now classified as low, medium or high risk.
Sources and references
- RA 11976 (Ease of Paying Taxes Act) — full text of the law (checked November 12, 2026)
- RMC 60-2024 — effectivity 22 January 2024; Sec. 34(K) repeal (checked November 12, 2026)
- RR 3-2024 — VAT and percentage tax changes (checked November 12, 2026)
- RR 4-2024 — file and pay anywhere (checked November 12, 2026)
- RR 5-2024 — refund processing (checked November 12, 2026)
- RR 6-2024 — micro and small taxpayer penalties (checked November 12, 2026)
- RR 7-2024 and RR 11-2024 — invoicing and registration; transition (checked November 12, 2026)
- RR 8-2024 — taxpayer classification (checked November 12, 2026)
- RMC 77-2024 — invoicing FAQs (checked November 12, 2026)
- RR 26-2025 — e-invoicing deadline 31 December 2026 (checked November 12, 2026)
Related tools and guides
Author and editorial review
Deepak Middha, Chartered Accountant
Chartered Accountant with 18 years in hedge funds; writes and maintains sulat.ph. Every rate, ceiling, deadline and fee on this page is taken from the National Internal Revenue Code or a BIR issuance and was checked against that source on November 12, 2026. Where a figure could not be confirmed officially, the page says so.
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