The Bureau of Internal Revenue (BIR) required “online sellers” or those facilitating business transactions through electronic or digital means to register to ensure tax compliance.
“All persons doing business and earning income in any manner or form, specifically those who are into digital transactions through the use of any electronic platforms and media, and other digital means, to ensure that their businesses are registered pursuant to the provisions of Section 236 of the Tax Code, as amended, and that they are tax compliant,” the BIR said on its Revenue Memorandum Circular No. 60-2020, dated June 10.
The order covered not only partner sellers or merchants, but also other stakeholders such as payment gateways, delivery channels, internet service providers, and other facilitators.
Those who will not register their business activity and/or update their registration status on or before July 31, 2020, shall be imposed with a penalty for late registration.
Likewise, they are encouraged to voluntarily declare their past transactions subject to pertinent taxes and pay the taxes thereon, without the corresponding penalty, when declared and paid on or before the said date.
BIR warned that all those who will be found later doing business without complying with the registration/update requirement and those who failed to declare past due taxes/unpaid taxes should be imposed with the applicable penalties under the law, and existing revenue rules and regulations.
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Newly-registered business entities, including existing registrants, are also advised to comply with the following:
- Issuance of registered Sales Invoice or Official Receipt for every sale of goods or services to clients, customers, or buyers
- Keeping of registered Books of Accounts and other accounting records of business transactions
- Withholding of taxes, as applicable
- Filing of required tax returns
- Payments of correct taxes due on time
BIR issued the memorandum days after the Department of Trade Industry reminded online sellers to refrain from using “PM sent” and disclose the prices of their products instead in compliance with the law.
The Department of Finance (DOF), through its attached agency BIR, earlier said it is now considering imposing taxes on digital activities such as online sales and streaming services like Netflix.