This regulation is based on the Bureau of Revenue Tax Regulation No. 16-2023 promulgated by the Philippine Bureau of Revenue on December 27, 2023. Although the initial implementation date has been postponed, it was finally confirmed to take effect on July 15, 2024.
According to the new regulations, local online sellers are required to pay withholding tax at 0.5% of their gross income, which is actually 50% of 1% of gross income, which is intended to simplify tax calculations and encourage compliance. It is worth noting that all e-commerce sellers must register with the Philippine Bureau of Revenue (BIR), otherwise they may not be able to conduct business normally on e-commerce platforms.
The tax regulations apply to sellers whose total income in the previous tax year exceeded 500,000 Philippine pesos (₱500,000), or whose cumulative income in the current year reaches the same amount. Sellers who do not meet this threshold will be temporarily exempted from withholding taxes, and at the same time, sellers can apply for tax exemption according to existing laws or agreements.
