RMC No. 98-2026: Which Businesses Must Switch to Electronic Invoices, and What Actually Counts as One

Revenue Memorandum Circular (RMC) No. 98-2026, issued by the Bureau of Internal Revenue (BIR) on September 22, 2026, sets the policies and guidelines for electronic invoicing under Section 237 of the Tax Code and requires covered taxpayers to begin issuing electronic invoices by December 31, 2026. The circular’s headline change for online sellers: it explicitly names small, medium, and large taxpayers engaged in e-commerce or internet transactions as covered, alongside Large Taxpayers Service (LTS) filers, large taxpayers under the Ease of Paying Taxes (EOPT) framework, and businesses running computerized accounting or invoicing systems (CAS) — while exempting Micro Taxpayers from this transition.

Which businesses does RMC No. 98-2026 require to switch to electronic invoicing? #

RMC No. 98-2026 names four groups as covered by the December 31, 2026 deadline: small, medium, and large taxpayers doing e-commerce or internet transactions; taxpayers under the BIR’s Large Taxpayers Service; large taxpayers under the EOPT framework; and businesses already using a computerized accounting or invoicing system — with Micro Taxpayers carved out entirely. This is reported consistently across Manila Bulletin, Context.ph, Tribune, Aureada Law, and BusinessMirror’s coverage of the circular published the same week it was issued.

The size-based e-commerce language is the practical news here: earlier BIR issuances on electronic invoicing (RR No. 8-2022 and RR No. 11-2025) already named “taxpayers engaged in e-commerce” as a covered category in principle, but RMC No. 98-2026 is what BusinessMirror’s report and Manila Bulletin’s headline describe as the BIR now actively “ordering” small, medium, and large e-commerce and internet-transaction sellers to convert — not just large exporters or LTS accounts. An online seller no longer classified as micro is squarely in scope regardless of whether it also happens to be an exporter.

What actually counts as a valid electronic invoice under RMC No. 98-2026? #

Not every digitally created invoice qualifies. Aureada Law’s, Manila Bulletin’s, and Context.ph’s reporting on the circular converge on the same three-part technical definition: the invoice must be generated through a duly registered, approved, or accredited system; transmitted electronically to the buyer; and structured so its data can be electronically extracted and processed for BIR reporting. A PDF export, a scanned copy, or a typed document from Word or Excel does not meet that bar.

• Generated through a registered system — an in-house system, commercial e-invoicing software, or an Electronic Invoicing Service Provider (EISP), each of which needs the BIR’s registration, approval, or accreditation before it can issue compliant invoices.
• Transmitted electronically to the buyer — the document has to reach the customer through the system itself, not just exist as a file the seller keeps.
• Capable of electronic extraction and processing — the underlying data has to be structured (not a flat image) so the BIR can pull it for reporting purposes.
• Explicitly excluded: manually prepared invoices created in Word, Excel, or similar office applications — a rule multiple outlets, including Manila Bulletin and Context.ph, report the circular states directly.

On why this matters for how the BIR is framing the shift, BusinessMirror’s and Philstar’s coverage both quote BIR Commissioner Charlito Martin R. Mendoza describing the circular’s intent. As BusinessMirror reported it:

“Electronic invoicing is a huge step toward revolutionizing invoicing and tax administration in the Philippines. It will change how businesses document transactions, how tax information is generated, and how the BIR uses data to build a more modern and efficient tax system.”

That framing — quoted here from BusinessMirror’s report, since the RMC’s own PDF was not independently retrievable in this research session — lines up with the technical requirement itself: the BIR wants structured, extractable data, not a digital-looking document that still has to be re-keyed by hand.

Section 237 e-invoicing is a separate obligation from Section 237-A sales reporting #

A distinction worth getting right before you plan a compliance project: RMC No. 98-2026 treats the duty to issue electronic invoices under Section 237 of the Tax Code as separate and distinct from the duty to electronically report sales data under Section 237-A, according to Aureada Law’s and Taxumo’s summaries of the circular. In plain terms, becoming covered for e-invoicing under this circular does not automatically mean a business must also start transmitting real-time sales data feeds — that second obligation still depends on when the BIR issues the implementing policies, guidelines, and procedures specific to Section 237-A for a given taxpayer category.

This is the same underlying legal architecture explained in What Is the BIR Electronic Invoicing System (EIS) and Which Taxpayers Must Comply? — Section 237 covers the invoice/receipt itself, Section 237-A covers the sales-data feed to the BIR’s Electronic Invoicing/Sales Reporting System. RMC No. 98-2026’s contribution is making that separation explicit for the newly named December 31, 2026 wave, so a covered e-commerce seller should not assume that hitting the invoicing deadline also means full sales-data transmission is already required.

A worked example: an online seller crossing into scope #

Consider a Shopee-based apparel seller who currently issues a manually typed acknowledgment receipt (built in a spreadsheet template) for every order, then reconciles monthly sales in a separate ledger for RELIEF SLSP purposes. Once this seller’s registered classification is medium rather than micro — a size classification the BIR sets, not a self-declaration — RMC No. 98-2026 places the seller squarely inside the December 31, 2026 e-commerce coverage group, alongside any Large Taxpayers Service account or EOPT-classified large taxpayer that sells online.

Practically, that means three things change for this seller: (1) the spreadsheet receipt no longer counts, even if a copy is emailed to the buyer, because Word/Excel-generated documents are explicitly excluded; (2) the seller needs a registered or accredited system — in-house, a commercial e-invoicing package, or an Electronic Invoicing Service Provider — to generate the invoice and transmit it electronically to the buyer; and (3) the seller’s separate obligation to transmit sales data to the BIR under Section 237-A does not automatically activate on the same date — it follows its own implementing schedule. A CAS-using wholesaler in the same position faces the identical gap: an existing Permit to Use (PTU) for a computerized accounting system does not, by itself, satisfy RMC No. 98-2026’s invoicing requirement unless that system is also registered or accredited specifically for electronic invoicing.

What this means for taxpayers before December 31, 2026 #

If a business fits any of the four covered categories above, the practical task between now and December 31, 2026 is choosing an implementation path — in-house development, a commercial e-invoicing package, or an EISP — and confirming that path produces a structured, electronically transmitted invoice the BIR can extract data from, not a digital-looking paper substitute. Missing that distinction is exactly the gap this circular is closing: for what happens if the deadline is missed anyway, see BIR E-Invoicing EIS Penalties: What Happens If You Miss the December 31, 2026 Deadline; for how this interacts with existing RELIEF SLSP filing duties, see Does EIS Replace RELIEF SLSP Filing?

Summary #

RMC No. 98-2026 is the BIR’s September 22, 2026 circular setting the operating rules for electronic invoicing under Section 237 of the Tax Code, with a December 31, 2026 deadline for small, medium, and large e-commerce/internet-transaction sellers, LTS taxpayers, EOPT large taxpayers, and CAS users — Micro Taxpayers excluded. A valid electronic invoice must come from a registered, approved, or accredited system, transmit electronically to the buyer, and carry data the BIR can electronically extract; a Word or Excel document does not qualify no matter how it’s formatted or sent. Issuing that invoice is a separate obligation from Section 237-A electronic sales reporting, which follows its own rollout. Businesses newly in scope — especially online sellers who assumed e-invoicing was only for large exporters — have roughly three months from this circular’s issuance to pick an implementation path and get it running.

Sources #

Primary source

• Bureau of Internal Revenue — 2026 Revenue Memorandum Circulars index (citation of record for RMC No. 98-2026, issued September 22, 2026). The circular’s own PDF was not independently retrievable in this research session (not yet indexed on the BIR’s document CDN at the time of writing); the facts above are corroborated across the secondary sources below.

Secondary sources

• Manila Bulletin — BIR orders e-commerce, large taxpayers to switch to electronic invoices
• BusinessMirror — BIR issues electronic invoicing rule (source of the Commissioner Mendoza quote used above)
• Philstar.com — BIR issues electronic invoicing guidelines
• Context.ph — BIR sets year-end deadline for e-invoicing compliance
• Tribune.net.ph — BIR sets 31 December e-invoicing deadline
• Aureada Law — BIR Electronic Invoicing Rules Under RMC No. 98-2026: What Philippine Businesses Need to Know Before December 31, 2026
• Taxumo — BIR EIS Explained: New PTI and Downtime Rules Under RMC No. 98-2026