Do You Need to Notify the BIR Before Transferring, Repairing, or Upgrading Your CRM or POS Machine?

A permitted cash register machine (CRM) or POS terminal can’t be repaired, upgraded, modified, updated, or moved without prior written notice to the BIR office with jurisdiction over the business — Revenue Regulations No. 11-2004, Section 10.3.5, requires this notice before the change happens, though RMO No. 7-2015’s compromise schedule doesn’t print a specific peso figure for skipping it.

This is a companion post to BIR Compromise Penalties for CRM and POS Compliance Failures: A Checklist, which covers the related location and roller-tape requirements, and Do You Still Need a Permit to Use (PTU) for Your POS or CRM Machine?, which covers current CRM/POS registration practice.

What does RR No. 11-2004 require before a machine changes? #

Section 10.3.5 of Revenue Regulations No. 11-2004 requires prior written notice to the proper Bureau office before a permitted machine is repaired, upgraded, changed, modified, updated, or removed from its specified location. The regulation’s exact text:

Sec 10.3.5, RR No. 11-2004 — “Failure to notify the Revenue District Officer regarding the transfer/repair/upgrading/status of machines of CRM/POS and other Similar Devices. (Section 10.3.5 — A machine who has been issued a Permit to Use CRM/POS Machine shall not have the machine required, upgraded, changed, modified, updated, or otherwise removed from its specified location, without prior written notice to the proper Bureau office having jurisdiction over the principal place of business of the proprietor.)”

The notice requirement is triggered by the change itself, not by the outcome — a repair that ends up being minor still needed the prior notice, and a planned upgrade that gets cancelled after notice was already filed doesn’t create a problem either way.

Does RMO No. 7-2015 attach a compromise amount to this? #

No specific peso figure is printed for this line item in the published Annex C/A schedule, unlike several of the more clearly priced CRM/POS and invoicing violations nearby. A finding under this section should be confirmed with the examining revenue office for the applicable figure rather than assumed to carry any particular amount.

Why does the BIR require notice before, not after? #

Prior notice lets the BIR keep its registration records for a specific machine current in real time, rather than reconciling a mismatch after the fact during an audit or tax mapping visit. A machine’s permit ties its serial number, registered location, and configuration to a specific taxpayer record — a repair that changes internal components, a software upgrade that changes how transactions are recorded, or a relocation to a new branch all potentially affect what that record should say. Filing notice beforehand keeps the BIR’s file synchronized with what’s actually happening on the ground.

Typical situations that trigger this notice requirement:

• Sending a malfunctioning POS terminal out for repair
• Upgrading a cash register’s firmware or the accounting software behind a POS system
• Relocating a machine from one branch to another within the same business
• Replacing a failed unit with a new machine under the same registration

Frequently asked questions #

Do I need to tell the BIR before repairing my registered cash register machine? #

Yes. Revenue Regulations No. 11-2004, Section 10.3.5, requires prior written notice to the Bureau office having jurisdiction over the principal place of business before a permitted CRM or POS machine is required, upgraded, changed, modified, updated, or otherwise removed from its specified location.

How much is the compromise penalty for not notifying the BIR before a machine change? #

RMO No. 7-2015’s Annex C lists this as a distinct violation under Section 10.3.5 of RR No. 11-2004 but does not print a specific peso compromise figure for it in the published schedule.

Does this include software updates, not just physical repairs? #

The regulation’s language covers a machine being “required, upgraded, changed, modified, updated, or otherwise removed from its specified location” — broad enough to reasonably include a firmware or software upgrade to the registered system, not only a physical hardware repair, though the regulation predates most modern POS software-update practices.

Is this the same violation as using a machine at the wrong location? #

No. Using a CRM/POS machine at a location other than the one specified in its permit (Sec. 10.3.4) is a separate finding from failing to give prior notice before transferring, repairing, or upgrading the machine (Sec. 10.3.5) — a business could notify the BIR properly before a repair and still separately be found using the machine at an unpermitted location, or vice versa.

What should the notice to the BIR actually say? #

The regulation doesn’t prescribe a specific form for this notice beyond requiring it be in writing and directed to the Bureau office with jurisdiction over the principal place of business — in practice, this should identify the specific machine, describe the change (repair, upgrade, modification, or relocation), and be filed before the change takes place, not after.

Summary #

A registered CRM or POS machine isn’t free to repair, upgrade, or relocate without paperwork — RR No. 11-2004 requires written notice to the BIR beforehand, and RMO No. 7-2015 flags skipping that notice as its own violation, even without stating a peso figure for it. Keeping a simple log of when machines are sent for repair, upgraded, or moved — and notifying the relevant BIR office each time — closes this gap before a tax mapping visit ever surfaces it.