Inventory list BIR is an annual report that is submitted to the Bureau of Internal Revenue (BIR) which serves to confirm the business’ inventory and financial information. It is particularly suitable for retail stores especially in the Philippines.
Knowing the format, deadline, annexes, and how to submit are important in order to prevent compliance problems. This guide provides details on what and how to prepare your inventory list with BIR.
Key Takeaways
The BIR inventory list is a complete statement of the inventory as well as other related information submitted to the BIR by the taxpayer. This could be products, materials, finished products, resale property facilities, depending on the company.
As per Revenue Memorandum Circular (RMC) No. 57-2015, the BIR shall ask for an annual inventory list and schedules with regard to property taxes of covered taxpayers. Also, the information should be correlated with the amounts reported on the financial statements and annual income tax returns.
This is especially crucial for companies that will have a large volume of inventory like retail stores, manufacturers, and construction companies. Having a reliable inventory stock control process would make your preparation easier as your stock data is already sorted and traceable at the end of the year.
The requirement is based on RMC No. 57-2015, and applies to taxpayers with balance sheets full of tangible assets, especially those taxpayers having 50 percent or more of their total assets in working current assets. Businesses commonly submit their inventory list include:
This requirement can thus apply to big companies as well as smaller Philippine businesses such as retailers and online sellers, depending on their business registration and inventory operations.
Yes. Even when the company is a typical inventory company and it doesn’t actually have any inventory on the last day of the taxable year, it is still required to file an inventory list. It is always better to file a “nil” report than to not file one.
A retailer can for instance sell every product before December 31 and not stock any product at the end of the year. The business should keep records to justify zero balance instead of simply leaving the BIR without an explanation and follow the submission procedure applicable to the situation.
The Inventory list BIR deadline is generally 30 days after the close of the taxable year, based on Section 13 of Revenue Regulations No. V-1 as cited in RMC No. 57-2015. For businesses using a calendar year ending December 31, this means the inventory list is generally due by January 30 of the following year.
For BIR inventory list deadline 2027, a calendar-year taxpayer whose taxable year ends on December 31, 2026 would generally have until January 30, 2027 to submit its inventory list. Businesses using a fiscal year should instead count 30 days from the close of their applicable taxable year.
Businesses that submit a late, incomplete, inaccurate, or improperly formatted BIR inventory list may be subject to penalties under the National Internal Revenue Code (NIRC), as amended. Compliance is important because the inventory list should contain information that can be supported by the taxpayer’s accounting and financial records.
Under RMC No. 57-2015, an inventory list or related document that is not submitted in the prescribed form may be treated as not received by the BIR. The circular also refers to the applicable penalties under Sections 250 and 255 of the NIRC.
The BIR inventory list penalty is not necessarily the same for every taxpayer. The applicable compromise penalty can depend on the type of violation, taxpayer classification, and the penalty schedule in effect.
RMC No. 57-2015 includes compromise penalty amounts ranging from ₱1,000 to ₱25,000 for the relevant violations. However, businesses should not assume that this range automatically applies to every late or incorrect inventory list. Non-compliance may also result in:
Businesses can reduce the risk of non-compliance by using the prescribed BIR format, selecting the correct annex, reconciling inventory quantities and values with their accounting records, and completing the required certification and supporting documents before submission.
Additionally, Using a perpetual inventory system can also help businesses track stock movements continuously and maintain more consistent inventory records for reconciliation.
Because penalties can vary depending on the circumstances and applicable BIR rules, businesses should verify the latest requirements with the BIR or a qualified tax professional before filing their inventory list.
The BIR inventory reporting requirements are based on different forms by industry per RMC No. 57-2015. For instance, the following information on an inventory schedule (Annex A) could be arranged as follows:
Annex A Template
Annex B Template
Annex B-1 Template
Annex C Template
Annex D Template
Under BIR regulations, governed primarily by RR No. V-1, RR No. 2-2015, and RMC No. 57-2015, taxpayers in the Philippines who hold inventory or maintain books of accounts must submit an annual inventory list along with mandatory schedules. Here are some BIR requirements for inventory list submission:
All businesses holding physical goods, such as manufacturing or retailing, are required to file. Additionally, zero-inventory or purely service-based businesses must submit a “Nil” filing to confirm no stock on hand and prevent open compliance cases with the BIR.
Calendar year taxpayers must submit on or before January 30 following the close of the taxable year. Fiscal year taxpayers must submit on or before the 30th day following the close of their approved fiscal year.
Manufacturing, trade, and retail businesses use Annex A to detail item codes, descriptions, units of measure, quantities, costs, total values, and valuation methods. Real estate developers use Annex B for inventories of land, buildings, condo units, and work-in-progress projects.
Additionally, construction companies use Annex C to report outstanding receivables and realized gross profits per project. Finally, all filing taxpayers must include Annex D, which is a notarized sworn declaration attesting to the accuracy of the submission.
There are several required file formats for documentation and filing compliance. Moreover, you should be aware of the documentation. Below are the accepted file types according to BIR regulations:
Taxpayers should omit capital or fixed assets classified as Property, Plant, and Equipment, goods held on consignment owned by third parties, and general office supplies intended strictly for internal business consumption.
Failure to submit or submitting late or incomplete reports results in compromise penalties ranging from ₱1,000 to ₱25,000 based on gross sales or receipts under RMC No. 7-2015. Unfiled submissions also generate open cases in the BIR system, which can prevent the issuance of Tax Clearances and local business permit renewals.
Therefore, accurate inventory tracking becomes essential for maintaining BIR compliance. When stock movements, quantities, and costs are recorded consistently throughout the year, businesses can reduce the risk of discrepancies.
Also, businesses can use an inventory management KPI to assess areas such as stock accuracy, turnover, and inventory efficiency. When it’s recorded consistently throughout the year, you can reduce the risk of discrepancies when preparing the year-end report.
The exact information required depends on the applicable BIR annex and the nature of the taxpayer’s business. For an inventory schedule, the report should contain enough information to identify the inventory, its quantity and location, and its reported value. For an applicable Annex A inventory list, businesses should organize information such as:
| Information | Purpose |
|---|---|
|
Item or product description |
Identifies the inventory being reported |
|
Product or inventory code |
Helps distinguish individual SKUs or inventory items |
|
Inventory location |
Identifies the branch, warehouse, or other location where inventory is held |
|
Unit of measurement |
Specifies whether inventory is measured in pieces, kilograms, liters, boxes, or another unit |
|
Quantity on hand |
Reports the quantity held at the end of the taxable year |
|
Inventory valuation information |
Shows how the reported inventory value was determined |
|
Unit cost |
Indicates the applicable cost per inventory unit |
|
Total inventory cost |
Shows the total reported cost of the inventory |
|
Remarks |
Provides additional information where applicable |
The figures should be checked against the company’s inventory records and accounting records before submission. RMC No. 57-2015 also requires the applicable information to be correlated with amounts reported in the financial statements and annual income tax return.
Under BIR regulations, governed primarily by RR No. V-1, RR No. 2-2015, and RMC No. 57-2015, taxpayers in the Philippines who hold inventory or maintain books of accounts must submit an annual inventory list along with mandatory schedules. Here are some BIR requirements for inventory list submission:
The most popular format is the one known as Annex A, designed for companies that produce, distribute, or sell tangible products. It needs a complete breakdown of inventory variations for each one of them, along with their quantity, unit cost, and total values.
Annex B reports saleable units and project costs for each real estate project. It includes projected revenue, costs incurred in prior and current years, total costs to date, and estimated costs to complete.
It also records realized gross profit and unit movement, including total units available for sale, units sold in prior years, units sold during the current year, and unsold units at year-end.
Annex B-1 works with Annex B to reconcile saleable units per project with related trade accounts receivable. It records beginning and ending receivables, sales during the year, and collections during the year.
Therefore, this schedule also classifies transactions by sales category, including full-payment, deferred cash, installment, zero-rated, and exempt sales under applicable BIR rules.
Annex C reports the outstanding receivables and gross profit earned on each project according to the percentage of completion method, as opposed to finished goods remaining on the books in a warehouse.
Annex D isn’t an inventory schedule itself; it’s the notarized certification that must accompany your USB flash drive or DVD-R, signed by an authorized representative attesting that the data submitted is true and correct.
Also Read: Inventory Management: Meaning, Types, & Benefits
To maintain full tax compliance in the Philippines, businesses handling physical goods must follow specific procedures when preparing their annual inventory reports. Here is a step-by-step how to create BIR-compliant inventory list for you business:
Submitting an inventory list to the BIR involves identifying the correct inventory schedule, verifying year-end inventory records, preparing the required documents, and submitting them through the appropriate BIR office. These are the steps to submit your submission:
| Step | What to Do | Key Requirement |
|---|---|---|
|
1. Determine Your Business Requirements |
Review your business activities, inventory types, accounting period, and applicable BIR reporting requirements. |
Confirm which inventory schedules apply to your business. |
|
2. Identify the Correct Annex |
Select the appropriate inventory schedule, such as Annex A, B/B-1, or C, based on your business activity and reporting requirements. |
Check the applicable BIR regulations and guidance to determine the correct annex or annexes. |
|
3. Conduct a Year-End Inventory Count |
Count and verify your inventory as of the last day of the taxable year. |
Ensure quantities, item descriptions, and inventory values are accurate and supported by records. |
|
4. Reconcile Your Inventory Records |
Compare the physical inventory count against stock records, so it aligned with the document. Also, businesses using a periodic inventory system should ensure that recorded inventory balances are reconciled with the results of their year-end physical count. |
Investigate discrepancies and correct errors before preparing the final inventory list. |
|
5. Prepare the Prescribed Inventory List |
Complete the applicable BIR inventory schedule using the required format and information. |
Check that all required fields, item details, quantities, and values are complete and consistent. |
|
6. Prepare the Certification |
Complete the applicable certification, such as Annex D, and arrange for notarization when required. |
Verify the certification requirements under the applicable BIR issuance. |
|
7. Save the Electronic Files |
Save the inventory list and required supporting files in the prescribed electronic format and storage medium. |
RMC No. 8-2023 provides updated guidance on inventory list submission requirements, including electronic-file submission. Confirm the current file and storage-medium specifications before filing. |
|
8. Submit to the Appropriate BIR Office |
Submit the required documents to the appropriate office based on your taxpayer classification. |
Non-large taxpayers generally submit to their concerned Revenue District Office (RDO), while taxpayers under the Large Taxpayers Service (LTS) submit to the appropriate LTS office. Confirm the current procedure with the BIR office before submitting. |
|
9. Keep Proof of Submission |
Retain the receiving copy, acknowledgment, or other proof of submission, along with your inventory records. |
Keep copies accessible for future verification, audits, and inventory tracking. |
Preparing a BIR inventory list becomes more challenging as businesses grow, especially when they manage more SKUs, warehouses, branches, purchases, and stock movements. Manual records can make it harder to reconcile inventory data and increase the risk of errors during year-end reporting.
The inventory module of ScaleOcean Atlas helps businesses organize inventory data in one centralized system, making it easier to monitor stock levels, movements, locations, and inventory costs.
With better inventory visibility, businesses can also reduce discrepancies of inventory. ScaleOcean Atlas can support more consistent inventory control throughout the year, so teams do not have to manually gather the data before the BIR deadline.
Schedule a consultation to explore how ScaleOcean Atlas can help improve inventory accuracy and streamline your BIR inventory list preparation. Key features include:
It is best to prepare the inventory list a few days before the deadline, to minimize the risk of errors. Therefore, it’s recommended that the finance team knows the do’s and don’ts to avoid these common problems.
The inventory list BIR is an important annual compliance document for Philippine businesses that maintain merchandise, raw materials, supplies, goods in process, finished goods, or other applicable inventory.
The general rule is that it is due within 30 days of the end of the taxable year (30 January for calendar year businesses). Taxpayers should complete their ending inventories for the year ended 31 December 2027, and submit by 30 January 2027, for FY 2027.
Fill your BIR inventory list using the proper format, fill the appropriate annexes and compare the report with your account records. For this seamless process, ScaleOcean Atlas can assist in a more accurate and efficient inventory listing.
Schedule a consultation with the ScaleOcean team to discuss your Philippine warehouse and inventory requirements, reporting workflow, and business goals.
Use official templates and forms (Annexes A, B-1, C, D) from the BIR website using RMC No. 57-2015 or trusted local tax compliance portals where copies of the forms are downloadable in Excel.
Fill in the key information about each item, such as SKU codes, product descriptions, storage areas, quantities, unit prices, valuation criteria, and total values, which align with your financial statements.
For calendar-year businesses, submit soft copy Excel files on a labeled USB or DVD-R to your RDO or through BIR TRRA Portal by Jan. 30 along with a notarized Annex D certification.
