Reiterating Taxpayers’ Obligations in Relation to Online Business Transactions
The Bureau of Internal Revenue (BIR) appears to have issued a direct reminder to those parties engaged in online transactions of their tax responsibilities by issuing Revenue Memorandum Circular No. 55-2013 (RMC No. 55-2013).
THE Bureau of Internal Revenue (BIR) recently issued Revenue Memorandum Circular (RMC) No. 55-2013 to remind the tax obligations of different parties engaged in online business transactions, which cover online shopping or online retailing, online intermediary service, online advertisement/classified ads, and online auction.
Like any other business, RMC No. 55-2013 highlights the following compliance requirements of persons who conduct business through online transactions:
1) Register the business at the Revenue District Office (RDO) having jurisdiction over the principal place of business/head office (or residence in case of individuals) by accomplishing BIR Form 1901 (for individuals) or 1903 (for corporations or partnerships), and pay the registration fee to any Authorized Agent Bank (AAB) located within the RDO;
2) Secure the required Authority to Print (ATP) invoices/receipts and register books of accounts for use in business (manual or computerized);
3) Issue registered invoice or receipt, either manually or electronically, for every sale, barter, exchange, or lease of goods and properties, as well as for every sale, barter, or exchange of service;
4) Withhold and remit creditable/ expanded withholding tax, final tax, tax on compensation of employees, and other withholding taxes, and issue the corresponding withholding tax certificates;
5) File applicable tax returns on or before the due dates, pay correct internal revenue taxes, and submit information returns and other tax compliance reports, such as the Summary List of Sales/Purchases (SLS/P), Annual Alpha List of Payees, etc., at the time or times required by existing rules and regulations; and
6) Keep books of accounts and other business/accounting records within the time prescribed by law and make them available anytime for inspection and verification by duly authorized Revenue Officer/s for the purpose of ascertaining compliance with tax rules and regulations.
For any person engaged in internet commerce who fails to comply with applicable tax laws, rules and regulations shall be subject to imposition of penalties under existing rules, in addition to the imposition of penalties pursuant to applicable provisions of the Tax Code.
What is REVENUE MEMORANDUM CIRCULAR NO. 55-2013?
Given the continuing advances in information technology, the internet has become the
vogue medium not only for business advertisements but also for the conduct of online business
transactions, including online retailing through virtual shopping malls, online market places,
webstores, and similar websites (or “online stores”). An increasing number of consumers are
visiting and purchasing goods and services from such online stores primarily because of the
high level of convenience inherent in online shopping which can be done within the confines
of one’s home, office, and even in public places offering internet access.
In view of the foregoing, it has become imperative to remind the parties in these online
business transactions of their tax obligations, hence this circular.
For additional guidance, the following are some of the kinds of online business
transactions, classified as to their participating parties:
i. Business to Consumer (“B2C”): which involves online stores selling goods and
services to final consumers;
ii. Consumer to Consumer (“C2C”); and
iii. Business to Business (“B2B”): which encompasses job recruitment, online
advertising, credit, sales, market research, technical support, procurement and
different types of training.
But as Bloggers you also deducting a 2% withholding tax as publisher.
I get this email from AMBIENTDIGITAL, INC.:
Please be advised that on March 1st, 2014, the Ambient Digital accounting team will start deducting a 2% withholding tax on all Publisher Payments to help everyone comply with the Bureau of Internal Revenue’s REVENUE MEMORANDUM CIRCULAR 55-2013. Note that the BIR released this memorandum last August 5th, 2013, hence, all publisher earnings gained before that date are exempted from the deduction.
We will issue Form 2307 (Tax Credit Certificates) only for individuals and juridical persons who have filed BIR form 2303 or Individual Tax Identification Numbers with us together with their Personal Information Sheet.
This is a requirement of the BIR. For more information, please click on the link below:
AMBIENTDIGITAL, INC. provides a way for advertisers to coordinate online advertising campaigns across hundreds of sites in a cost-efficient manner. We optimize how advertiser money is invested, maximizing the value of our clients’ media investment and providing incremental revenue to our partner websites.