The Bureau of Internal Revenue (BIR) has cautioned that it will enforce closures on online sellers who persist in operating without registering their businesses with the tax agency.
BIR Commissioner Romeo D. Lumagui Jr. said that they will continue their information campaign for online merchants on registering their businesses with the bureau but will become stricter if noncompliance persists.
“Doon sa kung hindi sila sumunod dito sa pag-uutos natin, patuloy ang gagawin natin information campaign dito sa online sellers kasi naniniwala tayo na doon sa ating soft approach, ayaw natin as much as possible to be aggressive on them at first instance,” Lumagui told reporters.
[In the event that they do not follow our orders here, we will continue our information campaign with online sellers because we believe that in our soft approach, we do not want to be as aggressive as possible towards them at first instance.]
“Ngayon, pagkatapos ng ating soft approach, definitely magiging strikto na tayo dyan, meron din tayong ginagawa na ipasasara natin ang kanilang mga online selling platforms kung hindi talaga sila mag-register,” he added.
[Now, after our soft approach, we will definitely become strict about it. We also have plans to shut down their online selling platforms if they really do not register.]
“Kung meron tayong 'Oplan Kandado' sa mga traditional brick and mortar, magkakaroon din tayo ng Online Kandado,” the BIR chief further said.
[If we have a 'Opland Kandado' for traditional brick-and-mortar stores, we will also have an 'Online Kandado'.]
Lumagui also said that this initiative could also ensure accountability on the part of the online sellers, noting that consumers were not able to get any refund because online businesses are not registered to the BIR.
One must register his enterprise if it is doing business or earning income in any manner or form, including those that make money online, or sell products or services, based on the BIR’s 2020 memorandum circular.
Last year, the BIR issued Revenue Regulations No.16-2023 that imposed a withholding tax on one percent of the gross remittances by electronic marketplace operators and digital financial services to online merchants for the goods sold through their platforms.
The withholding tax imposed does not apply to online sellers whose annual total gross remittances for the past taxable year have not exceeded P500,000.
It also does not apply to those whose cumulative gross remittances in a taxable year have not yet exceeded P500,000, and cooperatives registered with the BIR with a valid certificate of tax exemption.
Earlier, the agency extended the regulation’s implementing period to another 90 days or until July 14 to give leeway for online merchants who still haven’t submitted their sworn declaration of gross remittance.
How to register online business?
Newly-registered business entities, including existing registrants are advised to comply with the provisions of the Tax Code, particularly on the following:
- Issuance of registered Sales Invoice or official receipt for every sale of goods and services
- Keep a registered books of accounts and other accounting records of business transactions
- Withholding of taxes (if applicable)
- Filing of required tax returns
- Payment of correct tax dues on time
Generally, the registration and its updates are done in the BIR’s revenue district office (RDO) having jurisdiction over the place where the Head Office is located or over the place of residence of the individual taxpayer.
The owner will have to accomplish two copies of BIR Form No. 1901, while non-individuals will have to accomplish BIR Form No. 1903.
Individuals should present a birth certificate, passport, driver's license, among others. For non-individuals, SEC Certificate of Incorporation; or SEC Certificate of Recording; or License to do business in the Philippines.
The BIR may also require a DTI certificate for individuals and articles of incorporation or articles of partnership for non-individuals.
Payments for both individuals and non-individuals are the same with the registration fee at P500 and loose and loose documentary stamp tax for affixture to certificate of registration (COR) at P30, then proceed to securing BIR printed receipts.
After being done with the procedures, the registrant must receive, aside from the COR, a copy of the BIR-received Registration Form (1901 or 1903), Notice to Issue Receipt/Invoice (NIRI),
BRP/BPI or ATP (per taxpayers choice), and the proof of payment of registration fee.