BIR wants online sellers to pay taxes

MANILA, Philippines - The Bureau of Internal Revenue (BIR) said it will start collecting taxes from  individuals and businesses selling products online as part of its aggressive efforts to meet collection goal and boost government revenues.

The BIR issued a new memorandum which reiterates online sellers’ obligation to pay taxes.

Citing the National Internal Revenue Code, Internal Revenue commissioner Kim Henares said failure of online sellers to register with the BIR would result in the imposition of appropriate penalties.

Henares said the law requires the issuance of receipts by online sellers for every sale of goods and properties or exchange of service. The receipt must bear the full amount of the sale to the buyer.

Under the rules, online sellers must secure the required Authority to Print (ATP) invoices and register books of accounts for use in business either manually or electronically.

The receipt, the BIR said, must be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of the latter’s accounting records.

Online sellers are also required to file and pay applicable tax returns on or before the due dates as well as submit a summary list of sales/purchases including the payees.

Henares said the existing tax laws and revenue issuances on the tax treatment of purchases (local or international) of goods (tangible or not) shall apply to all transactions wherein consumers directly buy goods or services from a seller and an intermediary or third party over the Internet. Therefore, those using online social networks such as Facebook must register as a taxpayer.

Among the popular online buy and sell websites include sulit.com.ph, ayosdito.ph, alibaba.com, and tsikot.com, etc.    

Also covered by the rules are those that use the Internet to deliver marketing messages to attract potential buyers and those that conduct online auctions (such as ebay.ph).

Aside from issuing official receipts, online merchants or retailers are mandated to issue acknowledgement receipt to the credit card company or payment gateways for the amount received.  They must also pay the commission of credit card company net of 10 percent expanded withholding tax.

Payment gateways which refer to banks, credit card companies, financial institutions and bill paying services are similarly required to issue validated bank deposit slips in the name of the merchant or intermediary and remit the amount to the merchant less EWT of one half of one percent.

Freight forwarders and online website administrators are likewise required to issue the BIR registered OR for the service fees paid by the merchant or advertisers.

According to the BIR, the merchant/retailer is obliged to pay the online advertising entity for the advertising fee,  net of two percent EWT.