The Bureau of Internal Revenue (BIR) revealed last Friday that they plan to implement the collection of 1% withholding tax from online sellers as early as December to January of 2024.
BIR Commissioner Romeo Lumagui Jr. said that they are now in the final phase of drafting the new regulation, which was done after consulting online platforms selling goods and services, as well as different online payment channels.
Once implemented, BIR will impose a 1% withholding tax on one-half of the gross remittances of the online platforms to their partner merchants or sellers.
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Lumagui explained that the tax would be deducted from the amount remitted by the platform to the seller/merchant. That means that the online platforms and payment channels will be the ones making the transaction to the BIR.
BIR also noted that the said withholding tax will be creditable.
As for worried small business owners, BIR emphasized that the new regulation will not apply to online merchants whose annual total gross remittance for the past taxable year did not exceed Php250,000.
BIR said that the new regulation will level the playing field for bring-and-mortar businesses who, above their taxes, also have to pay for overhead expenses like rent.
Via: ABS-CBN News