BIR Releases ESP Accreditation Standards: What CAS Users Need to Know About E-Invoicing Compliance

This article reflects regulatory provisions under BIR Revenue Memorandum Circular (RMC) No. 110-2026 as of October 14, 2026. Taxpayers should consult their accounting professionals or tax advisors to assess specific compliance obligations.

The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 110-2026 last October 12, 2026. The RMC establishes comprehensive accreditation standards for Electronic Invoicing Service Providers (ESP). Providers are expected to satisfy the clarified technical, legal, and operational benchmarks to be able to legally offer e-invoicing solutions within the Philippines. 

For CPAs, IT leaders, and business owners that utilize accounting, invoicing, or Computerized Accounting Software (CAS), understanding RMC No. 110-2026 is important. Your bookkeeping software must be able to generate e-invoices and transmit sales data to the BIR, either on its own or through an accredited ESP, to comply with mandatory BIR electronic invoicing and sales reporting.

CAS Permit vs. E-Invoicing Compliance: Understanding the Difference 

It is a common misconception that having an existing Computerized Accounting System (CAS) automatically covers electronic invoicing. RMC No. 110-2026 reinforces that there are two distinct regulatory frameworks: 

1. CAS Registration (Existing Requirement): Your current Permit to Use (PTU) or Acknowledgement Certificate (AC) authorizes your business to use the accounting system for bookkeeping, financial reporting, and tax filing.

2. E-Invoicing Compliance (Mandatory Requirement): Separately, covered taxpayers must generate, transmit, and store electronic sales transactions following BIR Electronic Invoicing System (EIS) protocols. This requires a Permit to Issue Electronic Invoice (PTI) and a system capable of transmitting sales data to the BIR EIS (e.g. an accredited accounting or invoicing software).

Core Takeaway: A CAS Permit to Use (PTU) or Acknowledgement Certificate (AC) does not by itself make you e-invoicing compliant. To issue e-invoices, you must obtain a Permit to Issue Electronic Invoice (PTI). To transmit sales data, you should go through EIS-Accreditation. The transmittal capability of the CAS system providers is vital to get this approval.

Evaluating Your Two E-Invoicing Operational Pathways 

As e-invoicing mandates roll out, covered taxpayers utilizing computerized accounting software must choose one of two operational pathways:

Option One: Accredited Accounting or Invoicing Solution, Including Computerized Accounting Software  

Under this setup, your existing CAS provider builds the capability to transmit e-invoice and sales data directly to the BIR EIS within its platform. The CAS system must be EIS-Ready, backed by a dedicated vendor team to guide you through the compliance process.

For taxpayers utilizing a CAS, navigating this route involves two essential steps:

1. Secure your PTI: File for a Permit to Issue Electronic Invoice (PTI) with your jurisdictional Revenue District Office (RDO).
2. Apply for EIS Accreditation: Submit your system for official BIR EIS Accreditation to authorize direct server transmission.

This direct capability is a mandatory requirement to maintain compliance under the BIR Electronic Invoicing System (EIS) framework. If you want to learn more about EIS accreditation requirements, you can read this article on BIR E-Invoicing Philippines: Everything You Need to Know.

Since your accounting solution natively integrates BIR transmission capabilities, you do not need to onboard or pay for a separate, third-party middleware provider. This approach offers a seamless, end-to-end workflow which combines invoice generation, BIR transmission, and financial reporting in a single system under one vendor relationship. 

Option Two: CAS Integrates with Third-Party ESP 

In this model, your standalone CAS remains in place but connects to an accredited third-party ESP through Application Programming Interfaces (APIs). When optimized, data flows automatically between your accounting system and the ESP portal. However, this setup introduces added technical complexity, including potential API sync failures and latency, as well as the administrative burden of managing two separate vendor agreements and support teams.

Key Regulatory Terms Defined: PTI, PTT, and ESP 

RMC No. 110-2026 formally introduces three key regulatory instruments:

• PTI (Permit to Issue Electronic Invoice): 
  Official authorization granted to taxpayers that allows them to generate and issue electronic invoices through a system capable of transmitting to the BIR EIS, whether directly or through an accredited ESP. (Note: This is distinct from the CAS Permit to Use).‍
• PTT (Permit to Transmit): 
  Official authorization that permits covered taxpayers to transmit structured sales data directly to the BIR EIS servers. A PTT is generated upon passing technical EIS Accreditation/Certification testing on the BIR portal, converting an evaluated system's test credentials into active live-transmission authority.‍
• ESP (Electronic Invoicing Service Provider): 
  A licensed Philippine juridical entity that provides comprehensive e-invoicing services. These services include sales reporting, software validation, secure data transmission, cloud archiving, and API integrations.

In-House System Exceptions & Affiliate Rules 

In-house accounting systems remain under standard CAS/POS rules and are exempt from ESP accreditation if they are built, hosted, and operated on the taxpayer's private infrastructure for the exclusive use of that single legal entity and its registered branches.

However, if an internal platform processes transactions for parent companies, affiliates, subsidiaries, franchisees, or client entities, it is classified as an ESP. In these cases, the business must either obtain formal ESP accreditation or submit an application for an explicit BIR exemption within 20 working days.

Core Operational Responsibilities of an ESP 

Under Section 2 of RMC No. 110-2026, an accredited ESP must satisfy core operational functions:

1. Generate and Preserve Compliant E-Invoices
   An accredited ESP must be able to implement technical capabilities to build and store structured electronic invoices matching BIR functional, schema, cryptographic, and audit trail guidelines.
   
   
2. Incorporate PTI Electronic Invoice Numbers
   Ensure every issued transaction correctly incorporates the approved PTI Electronic Invoice Number in accordance with BIR sequence standards.
   
   
3. Facilitate PTI Application & Updates
   Assist client taxpayers in securing or updating their PTI via prescribed BIR channels. (The taxpayer remains the sole permit holder).
   
   
4. Transmit Data with Fallback Resilience
   An ESP must transmit e-invoice and sales data to the BIR in real time or within three (3) calendar days from the transaction date. If immediate transmission is unavailable, the system must securely queue, preserve, reconcile, and retransmit the data within three (3) calendar days upon system restoration, without loss, alteration, corruption, or duplication. 

5. Manage API Integrations and Certification
   Handle pre-production testing, environment setup, and API certifications on behalf of client taxpayers upon written authorization.

The Two-Phase BIR ESP Accreditation Process 

Securing BIR ESP Accreditation requires passing two rigorous evaluation phases, with Documentary Verification as the first phase and the Mandatory Testing Stages as the second phase.

Part 1: Annex A Technical & Security Requirements 

Annex A outlines the mandatory technical, security, legal, and operational prerequisites:

1. Security & Data Governance Compliance

• Government Data Residency: Strict adherence to Executive Order (EO) No. 119 s. 2026 regarding government data classification, storing all tax and financial records within Philippine jurisdiction.
• Perimeter Cyber Defenses: Mandatory protection via firewalls, anti-DDoS mitigation, Web Application Firewalls (WAF), and enterprise anti-malware tools.
• International Security Certifications: Certification under ISO/IEC 27001 (Information Security), ISO/IEC 27017 (Cloud Security), and ISO/IEC 27018 (Cloud Privacy).
• System Control Audits: Verified SOC 1 (Financial Reporting Controls) and SOC 2 Type II (Security, Availability, Confidentiality, Processing Integrity, Privacy) audit reports.
• Vulnerability Testing: Independent Source Code Review and Vulnerability Assessment and Penetration Testing (VAPT) yielding favorable, clean results.‍

2. Technical Architecture & System Reporting

• Data Transmission Transparency: Comprehensive end-to-end data flow architecture diagrams, data lineage maps, hosting provider disclosures, and encryption key management controls.
• System Documentation & Indicators: Software screenshots displaying exact version controls, along with evidence of an active Online/Offline Indicator to demonstrate system status during network drops.
• Statutory Sample Reports: Verification of sample transaction outputs for specialized statutory sales—including Senior Citizen, PWD, Solo Parent, and National Athletes and Coaches sales—alongside immutable Audit Trail Reports.

3. Disaster Recovery & Data Portability

• Business Continuity Controls: Documented Backup and Disaster Recovery Plans (DRP) featuring tested Recovery Time Objectives (RTO) and Recovery Point Objectives (RPO).
• Mandatory Exit & Migration Framework: Clear data export procedures allowing taxpayers to switch vendors without lock-in. Annex A explicitly prohibits ESPs from assessing hidden exit fees, data retrieval surcharges, or contractual barriers preventing record retrieval.
  

4. Operational & Legal Prerequisites

• Corporate & Legal Documentation: Mandatory submission of SEC Certificate of Registration, latest SEC General Information Sheet (GIS), notarized/apostilled Sworn Statement, and proof of authority (Board Resolution / authorized representative IDs).
• Financial Assurance & Cyber Protection: Evidence of required insurance or financial assurance, specifically Professional Liability or Cyber Risk Insurance.
• Financial & Service Governance: Latest Audited Financial Statements, company profile, standard Service Level Agreement (SLA) templates, and SEC Joint Venture/Contract Registration, if applicable.

Part 2: The 7 Mandatory BIR Testing Stages 

In addition to document submission, Section 3 of RMC No. 110-2026 requires platforms to pass seven sequential technical tests under simulated peak-volume conditions: 

• Stage 1: Documentary Completeness Review
• Stage 2: Fit & Proper / Cybersecurity Audit
• Stage 3: Technical Architecture & Data Lineage Review
• Stage 4: Data Privacy & EO No. 119 Compliance Check
• Stage 5: Live Solution Demonstration
• Stage 6: Interoperability & API Transmission Testing
• Stage 7: Load, Stress, Failover & Scalability Testing

Six Critical Questions to Ask Your CAS Provider

Because CAS registration does not equal e-invoicing compliance, ask your computerized accounting system provider these crucial questions:

1 Complete System

Record sale in CAS → Automatically generate e-invoice → Sync with the BIR EIS

• Single source of truth across all financial records
• Zero duplicate data entry for accounting staff
• Single vendor relationship and support contact

2 Integrated Systems: Separate CAS and Standalone ESP

Record sale in CAS → Auto record in ESP provider for e-invoicing via API → Issue e-invoice → ESP transmits to BIR EIS

• Double workload from entering transactions twice
• Higher error rates and tax mismatch risks
• Multiple software subscription costs and split support teams

Action Plan for Philippine Taxpayers

1. Audit Your Current Permits: Verify your existing CAS PTU/AC and recognize that separate action is required for e-invoicing.
2. Engage Your Software Vendor: Ask whether their system can transmit to the BIR EIS, and their timeline if not yet available
3. Assess Operational Impact: Determine whether a disconnected workflow is sustainable for your sales volume or if migrating to an integrated platform is more cost-effective.
4. Prepare Early: Avoid last-minute system implementation bottlenecks ahead of statutory compliance deadlines.
5. Monitor Official BIR Updates: Stay informed on upcoming BIR announcements regarding PTI permit applications. You can read about the latest updates on BIR e-invoicing in the Philippines. 

How Juan by JuanTax Is Building Native ESP Compliance 

For enterprises handling dozens or hundreds of daily sales, native integration saves hundreds of administrative hours each year while eliminating manual reconciliation risk.

At Juan by JuanTax, our mission is to simplify accounting and tax compliance for Philippine businesses. Our CAS platform is already EIS-Ready, featuring built-in capabilities to generate e-invoices in the official BIR-prescribed JSON format and transmit sales data directly to the BIR. A dedicated team in Juan is fully equipped to guide you and your business through every step of the compliance flow.

We are actively pursuing ESP accreditation to ensure that our users enjoy native, automated electronic invoicing directly inside their accounting platform. Beyond direct transmission, ESP accreditation lets Juan support e-invoicing at a higher standard of security and reliability. 

Juan’s technical and operational foundation is fully compliant with every requirement mandated by the BIR. Our infrastructure strictly adheres to Philippine local data residency rules under Executive Order No. 119 s. 2026, supported by robust perimeter defenses including active firewalls, anti-DDoS protection, and Web Application Firewalls (WAF), alongside proven backup protocols and Disaster Recovery Plans (DRP). All of this is built into a unified platform that seamlessly bridges bookkeeping, statutory financial reporting, tax filing, and direct e-invoicing under dedicated, Philippine-based customer support. 

As we finalize our official accreditation, we are completing active milestone steps including rigorous Vulnerability Assessment and Penetration Testing (VAPT), source code reviews, formal data portability documentation, and the final BIR testing stages, which includes system demonstrations to load, stress, and interoperability testing.

While we are currently in the formal process of completing our BIR accreditation submission, every system is fully ready to go. 

Build Your BIR-Compliant Workflow Today

As regulatory standards evolve, Juan by JuanTax remains committed to providing Philippine taxpayers, SMEs, and accounting practitioners with native software capabilities and secure compliance infrastructure.

Meeting e-invoicing requirements starts with choosing software purpose-built for local tax regulations. Book a call with our team today to learn how we can help you build an automated, scalable, and BIR-compliant accounting practice.

‍