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Feb 19, 2016 @ 8:34

BIR to tax online companies

 

Entrepreneurs making a killing from sales using the digital platform will now have to pay taxes.

The country’s tax chief Commissioner Kim Henares said the Bureau of Internal Revenue will soon release an order that would detail the tax liabilities of e-commerce companies as part of government efforts to strengthen tax administration.

Henares told reporters the upcoming issuance would involve “whoever uses the digital platform to sell, provide service, and receive payments.”

The official said that while the existing Tax Code should already apply to online sellers, the regulation would serve as a reminder by spelling out the taxes that they must settle.

Among the popular online-based shops are Lazada, Zalora and OLX, which also serve as online marketplaces. Some online sellers also conduct business through social media platforms such as Facebook and Instagram, with payments made via fund transfers and bank deposits.

The sellers are expected to remit a 12% value-added tax (VAT) for the transactions, personal income taxes, and percentage taxes for any sales made, the same duties levied from offline entrepreneurs as in the National Internal Revenue Code of 1997.

Under the law, persons selling items and services who make less than P1.92 million a year must remit to the government 3 percent of what they earn monthly. Those who make more than P1.92 million, meanwhile, must subject their sales to VAT.

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