Technology
Sellers on Online Shopping Platforms Now Subject to Withholding Tax: BIR
Sellers currently on online shopping platforms like Lazada and Shopee must now pay taxes that are to be collected by their respective e-commerce platforms, according to the Bureau of Internal Revenue (BIR).
This comes as BIR Commissioner Romeo Lumagui said in a press release that starting July 15, 2024, e-commerce platforms are to impose withholding tax against sellers using the platforms.
“Electronic Marketplace Operators will begin imposing withholding tax against their sellers/merchants starting July 15, 2024. We have already extended this by 90 days. No further extensions will be given,” Lumagui said in a press release issued on July 16.
The BIR has already issued Revenue Regulation 16-2023 in December 2023, requiring online sellers or merchants with more than PHP500,000.00 earnings to be subject to a 1 percent withholding tax annually.
Lumagui, however, made the clarification on withholding tax as to avoid confusion.
“Withholding tax is not a new tax, it’s merely a system of taxation where taxes are collected at source, which will be credited against the total income tax liability of the sellers/merchants,” Lumagui said.
He added that BIR wants to have a level playing field between brick-and-mortar stores and large corporations.
“The BIR aims to level the playing field between brick-and-mortar stores, which are regularly complying with their tax obligations, and online market places. Whether their business is operated online or through physical stores, sellers and merchants have to pay their taxes,” Lumagui added. (GFB)