The Bureau of Internal Revenue (BIR) has extended the transitory period for electronic marketplace (e-marketplace) operators and digital financial service providers to comply with government regulations, before the implementation of withholding tax on gross remittances to online sellers or merchants.
Revenue Memorandum Circular (RMC) No. 55-2024 dated April 15, 2024, imposed the extension of the transitory period to an additional 90 days or until July 14, 2024, “in order to provide the said taxpayers sufficient time to comply and adjust to the requirements.”
In a social media post, BIR commissioner Romeo Lumagui Jr. said the deadline has been extended to allow e-marketplace operators to adjust with the changes brought by the imposition of Revenue Regulation No. 16-2023.
The said regulation imposes withholding tax on gross remittances made by e-marketplace operators and digital financial service providers to online sellers or merchants for the goods and services sold or paid through the former’s platform or facility.
Specifically, a one percent withholding tax will be imposed on one-half of the said gross remittances.
The withholding tax, however, shall not apply if the gross remittances for the taxable year has not exceeded P500,000.
It also does not apply if the seller or merchant is duly exempt from or subject to a lower income tax rate pursuant to any existing law or treaty.
An earlier circular, RMC No. 8-2024, provided for the initial transitory period of 90 days, which has now been extended with the latest issuance.
