Record Keeping for Tax Purposes in the Philippines: What the EOPT Act Changed

A business preparing for its annual audit pulls its five-year-old files from storage, only to find someone already shredded the ones from six years back, because that’s what an old checklist said was safe. Under the current rule, that’s fine. Under the rule most business owners still assume applies, it isn’t. That gap is where record keeping for tax purposes in the Philippines usually goes wrong: the rule changed, and the guidance in most people’s heads didn’t catch up.

What Actually Changed in Record Keeping for Tax Purposes

For over a decade, the standard was simple: keep books of accounts and supporting records for ten years. That came from Revenue Regulations No. 17-2013, under Section 235 of the National Internal Revenue Code.

That rule no longer applies. Republic Act No. 11976, the Ease of Paying Taxes (EOPT) Act, amended Section 235 of the Tax Code, and Revenue Regulations No. 7-2024 implemented the change. Books of accounts and other accounting records now only need to be preserved for five years, counted from the day after the filing deadline, or from the actual filing date if the return was filed late, for the taxable year of the last entry.

One exception matters here: if a business has a pending protest or a claim for a tax credit or refund, and the records are material to that case, the five-year clock doesn’t apply. Those specific records stay preserved until the case is fully resolved.

As of mid-2026, this is the current operative standard. No further amendment to the retention period has been issued since RR No. 7-2024 took effect.

Where the Confusion Comes From

This is a pattern that comes up often. The old ten-year standard is still the version most readily available. Older accounting guides, internal SOPs written before 2024, and some still-published articles online continue to cite ten years, because that used to be correct.

Two mistakes tend to follow. Some businesses keep everything indefinitely as a safe default. That means paying for storage, physical or digital, for records that no longer need to be kept, and it can create confusion during an audit over which rule applied to which batch of files.

The more consequential mistake runs the other way: clearing out older records under the 5-year assumption without checking for ongoing tax cases. While the EOPT Act’s 5-year retention period does apply retroactively to older books, it comes with a massive catch. A business cannot destroy older records (such as those from 2022) if they are tied to a pending BIR assessment, an ongoing audit, or an unresolved tax dispute. In those cases, the records must be kept until the matter is fully resolved, regardless of how many years have passed.

What This Means for Different Types of Businesses

The five-year rule applies across the board, but how it plays out depends on how a business is set up.

Businesses running fully on cloud platforms like Xero or QuickBooks need computerized books preserved in electronic form. That means confirming exports, backups, or the platform’s own retention settings actually cover five years back, rather than assuming the cloud handles it automatically. A subscription lapse or platform migration can quietly create a gap.

Businesses still working from manual or loose-leaf books keep hard copies, and the same five-year clock applies. Physical storage usually gets deprioritized until an audit notice arrives, at which point assembling five years of organized paper under pressure is a much harder task than doing it calmly in advance.

Businesses that are part of a larger group, whether a subsidiary reporting to a foreign parent or a company with its own SEC filing history, face more than one retention rule at once. SEC recordkeeping requirements and group-level policies can run on different timelines. The BIR’s five-year rule sits alongside those, not in place of them.

What Records You Actually Need to Keep

“Books of accounts and other accounting records” covers more than the ledger itself. In practice, the records that matter most for tax purposes fall into a few categories:

• Books of accounts — manual, loose-leaf, or computerized, whichever format the business is registered to use. Learn more about which format is best for your business.
• Sales invoices and official receipts — every document issued to customers, since these support declared income.
• Purchase receipts and supplier invoices — the basis for claimed deductions and input VAT, where applicable.
• Bank and credit card statements — used to reconcile recorded transactions against actual cash movement.
• Payroll and withholding tax records — 2316s, alphalists, and contribution records, which BIR and other agencies can request separately. Check our payroll compliance guide to learn more.
• Asset and equipment purchase documentation — needed to support depreciation schedules for as long as the asset is being depreciated, which often runs past five years.

Not all of these expire on the same date. An asset bought in 2021 and depreciated over ten years still needs its purchase documentation on hand well after the five-year mark on that year’s tax return has passed, because the depreciation claims tied to it are still active.

What To Actually Do With Your Records

Start with the last entry date on each set of books, and the filing deadline for that return. That combination, not the calendar year written on the folder, is what starts the five-year clock.

From there, four steps cover most of what a business needs to check:

1. Match format to format. Keep manual books in hard copy and computerized books in electronic form. Records created before a manual-to-digital migration keep following their original format, even after the migration.
2. Flag anything tied to an open case. Before disposing of records near the five-year mark, check for a pending protest, an unresolved refund claim, or an ongoing audit tied to that period. Hold those specific records until the matter is closed.
3. Separate assets from transactions. Records supporting depreciation, capital allowances, or long-term claims should be tracked on their own timeline, tied to the life of the asset rather than the five-year rule for the return itself.
4. Set a review point, not just a disposal point. Reviewing what’s approaching the five-year mark once a year, rather than only when clearing out storage, makes it easier to catch records that need to be held longer for reasons unrelated to the standard retention period.

Five years is the legal floor, not the right number for every document. Records tied to asset purchases, depreciation schedules, or SEC filings are worth keeping longer, since they stay relevant well beyond the BIR’s own retention window.

The Discipline Doesn’t End When Audit Season Does

A recurring pattern shows up right after an audit or a filing deadline closes: the urgency behind weeks of careful documentation fades, until the next deadline forces the same scramble again.

That cycle creates more risk than any single rule does. The five-year clock doesn’t pause between audits, and treating record keeping as a year-round habit rather than a seasonal scramble is what keeps the next one from becoming a fire drill.

Setting up the underlying bookkeeping and document management properly from the start makes that habit easier to sustain than tightening things up only when a deadline is close. Businesses unsure whether their current practices match the current rule can get in touch with CloudCFO to have their record-keeping reviewed against what’s actually required today.