BIR clarifies tax obligations for online merchants
By Jun Ramirez and Jun Ramirez
Online merchants must adhere to the same tax requirements as traditional store operators and sellers of goods and services, the Bureau of Internal Revenue (BIR) said.
In an interview over dzBB, BIR Commissioner Romeo D. Lumagui, Jr. clarified the bureau's stance is aimed at encouraging thousands of traders involved in digital transactions to register their operations with the agency and eventually fulfill their tax obligations.
Lumagui explained that online businesses are liable for income, value-added, and percentage taxes, which are determined based on their gross earnings.
However, individuals with an annual income of P250,000 or less are exempt from taxation.
Lumagui also revealed that the BIR will soon release guidelines specifically addressing the tax responsibilities of online traders.
The move comes as many online merchants are unaware or simply ignoring their tax obligations.
"We will initially launch a nationwide information campaign to educate these taxpayers about their financial obligations and assist them in compliance," said Lumagui.
He added that the bureau aims to help taxpayers fulfill their duties before initiating extensive investigations to identify non-compliant individuals.