Philippines to Tax Businesses Selling Online

Philippine businesses that sell products and services via the Internet will now have to pay taxes.


The Bureau of Internal Revenue (BIR) has issued a memorandum stating that it will start collecting taxes from individuals and businesses selling products online.


"It has become imperative to remind the parties in these online business transactions of their tax obligations," says the BIR in the memorandum.


The memorandum notes that online business transactions encompass business-to-consumer (B2C), consumer-to-consumer (C2C), and business-to-business (B2B).


Individuals or businesses who conduct business through online transactions and its permutations have the obligation to register at their Revenue District Office and pay a registration fee. Online sellers will need to withhold the required creditable/expanded withholding tax, final tax, tax on compensation of employees, and other withholding taxes, and remit the revenue collected to the BIR, having issued to their customers the necessary Certificate of Tax Withheld.


Finally, they must file tax returns on or before the due dates, pay the correct taxes, and submit information returns and other tax compliance reports, such as the Summary List of Sales/Purchases, as required by existing rules and regulations.


"Any person engaged in Internet commerce who fails to comply with applicable tax laws, rules and regulations shall be subject to the imposition of penalties provided for under the existing laws, rules, and regulation," says the memorandum.



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