Tax Compliance for Online Sellers

In BIR Revenue Memorandum Circular No. 60 – 2020 dated 01 June 2020, the BIR reminds all persons doing business and earning income through digital transactions to register with the BIR and ensure that they are tax compliant.

These include the sellers, payment gateways, delivery channels, internet service providers, and other facilitators – all of which are expected to have registered with the Department of Trade and Industry (DTI) as a sole proprietor or the Securities and Exchange Commission (SEC) as a corporation/partnership/foreign corporation.

Period to Register/Update Registration and Settle Past Taxable Transactions

A taxpayer registering or updating its business registration and voluntarily declaring its past taxable transactions not later than 31 July 2020 shall not incur a penalty for late registration or late payment of taxes, respectively.

Those found doing business after 31 July 2020 without having registered or updated their business registration and/or paid taxes for past transactions shall be subjected to fines and penalties.

Basic Requirements for Registration

1. Secure appropriate Tax Identification Number for online selling, if none yet
2. Register business and secure Certificate of Registration from the Revenue District Office having jurisdiction over the place of physical establishment or if none, over the place of residence upon complete submission of:
   1. 2 original copies of BIR Form 1901 for individuals and BIR Form 1903 for non-individuals
3. Any valid government-issued ID
4. DTI Certificate, SEC Certificate of Incorporation/Articles of Incorporation, SEC Certificate of Recording, SEC License to Do Business in the Philippines, if applicable
5. Proof of payment of registration fee of Php500
6. Proof of payment of loose Documentary Stamp of Php30
7. Secure approved Authority to Print Receipts or BIR Printed Receipts / BIR Invoices

Existing and newly registered businesses are reminded to:

1. Issue registered Sales Invoice or Official Receipt for every sale of goods or services
2. Keep registered Books of Accounts and other accounting records of business
3. Withhold taxes
4. File tax returns on time
5. Pay correct taxes due on time

Click here to read the entire text of RMC No. 60 – 2020.