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Manila Bulletin devider Business devider One percent tax on online sellers not new, BIR says

One percent tax on online sellers not new, BIR says

Published Nov 11, 2023 04:34 am

At A Glance

  • Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui, Jr. clarified the proposed one percent withholding tax on online sellers.<br>The tax adheres to existing law obligating taxpayers with annual earnings of more than P250,000 to pay income tax.<br>The tax is creditable and forms part of the taxpayer's annual income.<br>Implementation of the tax will begin next month or in January next year when the regulations are finalized.<br>Online service platform providers will collect the tax on gross remittances before remitting payment to sellers.<br>Platforms acting as intermediaries must not accept orders from unregistered or colorum traders.<br>The regulations aim to capture more taxpayers and include a broader range of sellers, such as individuals renting condominium units, houses, and those vending food, household items, and various goods.<br>Big-time and mid-sized online sellers have already registered with the bureau and are fulfilling their tax obligations.

Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui, Jr. clarified that the proposed one percent withholding tax on online sellers adheres to existing law obligating taxpayers with annual earning of more than P250,000 to pay income tax.

Lumagui emphasized during a press forum hosted by the Philippine Information Agency that the tax is creditable, forming part of the taxpayer's annual income.

He said it will be implemented starting next month, or in January next year when the regulations is finalized.

The tax on the gross remittances will be collected by online service platforms providers before remitting payment to sellers.

The platforms acting as intermediaries in buyer-seller transactions will be required not to accept orders from unregistered, or colorum traders.

The regulations is intended to capture more taxpayers in the bureau's tax net,  encompassing a broader range of sellers, including individuals renting condominium units, houses and those vending food, household items, and various goods.

 Lumagui noted that big-time and mid-sized online sellers have already registered with the bureau and are fulfilling their tax obligations.

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Bureau of Internal Revenue (BIR) BIR Commissioner Romeo Lumagui Jr.
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