BIR orders online sellers to register business, declare past transactions by July 31
Marje Pelayo • June 11, 2020 • 346
MANILA, Philippines – The Bureau of Internal Revenue (BIR) has notified all sellers and service providers doing income-generating businesses through the Internet of their tax obligations.
They are being required to register or update their registration with the agency to ensure that they are tax compliant.
According to Revenue Memorandum Circular No. 60-2020 dated June 10, all persons doing business and earning income in any manner or form through the use of any electronic platforms and media are advised to accomplish their registration until the end of July.
“All those who will register their business activity and/or update their registration status not later than July 31, 2020 shall not be imposed with penalty for late registration,” the BIR advised.
Online business owners are also asked to declare their past transactions subject to pertinent taxes and all taxes incurred must be settled on or before July 31 so as not to face penalty.
The memorandum covers not only partner sellers or merchants but also ‘payment gateways, delivery channels, Internet service providers and other facilitators.’
The BIR reminded that anyone who will be found doing business without registering or updating their registration and those who failed to declare past due taxes or unpaid taxes on or before July 31 “shall be imposed with the applicable penalties under the law, and existing revenue rules and regulations.”
MANILA, Philippines – The Bureau of Internal Revenue (BIR) announced it has extended the deadline for business registration of online sellers or those earning income by selling and transacting through digital and other electronic platforms.
In a Revenue Memorandum Circular (RMC) No. 75-2020 issued on Wednesday, the BIR said the July 31 deadline stated in the previously issued RMC 60-2020 “for registration of the business activity and/or updates with no penalty imposition is hereby extended to August 31.”
“In addition, those who shall voluntarily declare their past transactions subject to pertinent taxes and pay the taxes due thereon when declared and paid on or before the said date shall not be subject to the corresponding penalty for late filing and payment,” the circular read.
The bureau, through RMC 60-2020 dated June 1, notified 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 order covers partner sellers/merchants, payment gateways, delivery channels, internet service providers and other facilitators.
The BIR warned those who will be found later doing business without complying with the registration/update requirements, and those who failed to declare past due taxes/unpaid taxes “shall be imposed with the applicable penalties under the law, and existing revenue rules and regulations.”
The bureau earlier clarified that the measure is not meant to squeeze out money from online sellers but merely encourage them to register their business.
MANILA, Philippines – Senator Risa Hontiveros on Tuesday said she has filed a resolution seeking for the suspension of the Bureau of Internal Revenue (BIR) memo that mandates online sellers to register and pay taxes amid struggles of finding alternative means to earn money during the coronavirus disease (COVID-19) pandemic.
In a statement, Hontiveros said she recently filed Senate Resolution No. 453 which urges the BIR to suspend the memo’s implementation “until the end of the year.”
The resolution also sought for a Senate investigation into the agency’s efforts to subject online sellers to taxation and registration requirements, which was criticized by many for being “ill-timed and insensitive.”
“Kung hahabulin ng pamahalaan ang malalaking digital entrepreneurs, dapat siguraduhing hindi nito pahihirapan ang maliliit na online seller na dumidiskarte ngayon para kumita. Our revenue policies should be sensitive to the struggles of Filipinos trying to make ends meet in these difficult times,” Hontiveros said.
Malacañang earlier clarified that not all online sellers will need to pay taxes but should still register their business and update their tax records. The Palace also stressed that those earning less than P250,000 annually are tax exempt, referring to a provision of the Tax Reform Acceleration and Inclusion (TRAIN) Law which states that only income above P250,000 is subject to taxes.
The Department of Trade and Industry also backed BIR’s move, saying the registration requirement only aims to build a registry of online sellers.
While Hontiveros noted Malacañang’s clarification, she said the registration requirement may still cost online sellers thousands of pesos in fees.
“It is best for everybody’s interests if the BIR suspends the implementation of the memo until December 31, 2020, while government agencies review and craft better policy guidelines on how online entrepreneurs should register or pay taxes,” she said.
The senator also pushed for a digital platform for BIR registration instead of requiring applicants to physically troop to its offices.
“Magkaroon muna ng digital platform for registration. Requiring people to congregate at the BIR’s offices likewise exposes them to the health risks associated with COVID-19 and might also lead to further spreading the disease and prolonging the pandemic,” she said.
She also reiterated her earlier call for the government to prioritize the collection of tax duties of Philippine Offshore Gaming Operators (POGO) rather than individuals who are making temporarily living via social media channels to weather the economic effects of the pandemic.
“It is only proper for the BIR to ensure that big digital businesses earning millions in profits – such as Philippine Online Gaming Operators (POGOs) – are paying proper taxes as required by law. Pero sana, huwag na pahirapan ang mga kababayan nating dumidiskarte para makakain,” Hontiveros said.
MANILA, Philippines – Senator Sherwin Gatchalian on Monday called on the government to extend fresh capital and other financial assistance, instead of implementing “untimely” new taxes to online entrepreneurs amid the novel coronavirus disease (COVID-19) pandemic.
In a statement, Gatchalian said online sellers should be covered by the microfinancing program of the Small Business Corporation (SB Corp.) under the Department of Trade and Industry to help them grow their business and recover from the economic effects of the pandemic.
The senator noted that DTI’s SB Corp. has a P1 billion Enterprise Rehabilitation Financing facility under the Pondo sa Pagbabago at Pag-asenso (Covid19 P3-ERF) to support micro and small businesses affected by the COVID-19 crisis.
The microfinancing program offers a minimal interest rate of not more than 2.5% per month with no collateral requirement.
Micro enterprises with asset size of not more than PhP3 million may borrow PhP10,000 up to PhP200,000 while small enterprises with asset size of not more than PhP10 million may borrow a higher loan amount but will not exceed PhP500,000.
“Ang DTI ay dapat magbigay pa nga ng puhunan sa mga Pilipino na nawalan ng trabaho at gustong makaahon sa kahirapan sa pamamagitan ng pagnenegosyo sa online. Sa ganitong panahon ng pandemya, mas magandang nasa tahanan lang sila at nag-nenegosyo. Nabibigyan pa nila ng trabaho ang mga delivery service riders.” Gatchalian said.
“Hindi lang basta ayuda ang hinihingi ng mga negosyanteng ito. Ang hinihingi nila ay malaya silang bigyan ng oportunidad na makapag-negosyo para may kita sila,” he added.
Gatchalian, vice chairman of the Senate committee on economic affairs, issued the statement following Bureau of Internal Revenue’s (BIR) move to require online sellers to register their business until July 31, and pay taxes if they are earning higher than P250,000 a year.
The lawmaker believes that registering businesses with the BIR is ineffective since its system requires an applicant’s physical presence at this time when people are still being restricted from leaving their homes.
“Nakita ko na hindi rin handa ang ating pamahalaan na buwisan ang ating mga maliliit na negosyante dahil yung ultimong pagre-rehistro ay hindi pa sila handa kaya huwag na nating ipilit sa ganitong panahon ng pandemya, dahil hindi lang marami ang naghihirap kundi marami rin ang natatakot na lumabas ng kanilang bahay,” he stressed.
Aside from providing capital, Gatchalian also urged the DTI to make use of the Philippine Innovation Law to enhance the competitiveness of these online sellers.
The law aims to harness innovation efforts to help the poor, the marginalized, and MSMEs to be a part of the domestic and global supply chain.
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