BIR requires online sellers to register business, declare past transactions for tax purposes

The Bureau of Internal Revenue (BIR) is requiring “online sellers” or those conducting business transactions through digital or electronic means to register with the taxman to ensure tax compliance.

Likewise, the BIR also want these businesses to declare their past transactions for taxation purposes.

In its Revenue Memorandum Circular No. 60-2020, dated June 1, the BIR notified “all persons doing business and earning income in any manner or form, specifically those who are into digital transactions through the use of any electronic platforms and media, and other digital means, to ensure that their businesses are registered pursuant to the provisions of Section 236 of the Tax Code, as amended, and that they are tax compliant.”

The order shall not only include partner sellers or merchants, but also other stakeholders such as payment gateways, delivery channels, internet service providers, and other facilitators.

As the lockdown measures to contain COVID-19 spread forced many people to stay at home, online buying and selling saw an increase.

READ: The Bureau of Internal Revenue issues a memorandum requiring those into digital transactions such as online sellers to register and declare their past transactions subject to pertinent taxes on or before July 31. | @Ted_Cordero pic.twitter.com/FqOXJNSYNW

— GMA News (@gmanews) June 10, 2020

The BIR told those involved who will register their business activity and/or update their registration status on or before July 31, 2020 “shall not be imposed with penalty for late registration.”

The taxman, likewise, encouraged online sellers or those whose businesses are done through electronic or digital means to “voluntarily declare their past transactions.”

Past transactions will be subject to pertinent taxes. If declared on or before July 31, such transactions shall not be imposed corresponding penalty.

The BIR warned those who will be found non-compliant with the registration or update requirements and those who failed to declare past due taxes shall be imposed with applicable penalties under the law, and existing revenue rules and regulations.

Newly-registered business entities, including existing registrants, are also advised to comply with the following:

• Issuance of registered Sales Invoice or Official Receipt for every sale of goods or services to clients, customers, or buyers
• Keeping of registered Books of Accounts and other accounting records of business transactions
• Withholding of taxes, as applicable
• Filing of required tax returns
• Payments of correct taxes due on time

Earlier, the Department of Finance (DOF), through its attached agency BIR, said it is now looking at how to impose taxes on digital activities such as online sales and streaming services. 

House Committee on Ways and Means chair Joey Salceda earlier this week filed a measure seeking to impose taxes on digital services.

Senator Ramon Bong Revilla Jr. on Wednesday said he has filed a similar measure.

Sen. Imee Marcos said proposed taxation of digital transactions such as online selling amid the COVID-19 pandemic would be ill-timed as it could nip several economic opportunities in the bud.

The BIR's announcement came just days after the Department of Trade Industry reminded online sellers to disclose the prices of their products and refrain from the usual practice of withholding the prices from the public, sending instead private messages to interested buyers. -MDM, GMA News