Blog > Marketplace News > The Philippine Government Introduces Regulations To Impose A 1% Withholding Tax On Sellers
The Philippine Government Introduces Regulations To Impose A 1% Withholding Tax On Sellers
Jayson 02 Jan 2024 09:18
It is reported that the Philippine Bureau of Internal Revenue (BIR) has previously expressed its intention to impose taxes on online sellers such as Lazada and Shopee before the end of 2023, which is part of the government's efforts to profit from the growth of e-commerce transactions in the country.
Now, with the promulgation of BIR Revenue Regulation No. 16-2023, the taxation issue has been settled.
The new tax provides for a withholding tax on "half of the total amount of remittances made by electronic marketplace operators and digital financial service providers to merchants for goods or services paid for through their platforms."
As such, the BIR will impose a 1% tax on half of the total amount provided by an online financial platform to its partner sellers or merchants for goods or services sold through the former's platform.
This is in addition to the existing withholding tax obligations imposed on electronic market operators.
However, this latest provision exempts online merchants whose revenue in the tax year is less than ₱500,000; online merchants whose cumulative remittances do not reach ₱500,000 in a tax year are also exempt.
Now, with the promulgation of BIR Revenue Regulation No. 16-2023, the taxation issue has been settled.
The new tax provides for a withholding tax on "half of the total amount of remittances made by electronic marketplace operators and digital financial service providers to merchants for goods or services paid for through their platforms."
As such, the BIR will impose a 1% tax on half of the total amount provided by an online financial platform to its partner sellers or merchants for goods or services sold through the former's platform.
This is in addition to the existing withholding tax obligations imposed on electronic market operators.
However, this latest provision exempts online merchants whose revenue in the tax year is less than ₱500,000; online merchants whose cumulative remittances do not reach ₱500,000 in a tax year are also exempt.
