THE Bureau of Internal Revenue (BIR) said the imposition of withholding tax by electronic commerce operators on online sellers or merchants took effect last June 15.
“We have extended this by 90 days. No further extensions will be given,” BIR Commissioner Romeo Lumagui Jr. said in a statement yesterday.
The BIR previously granted a 90-day extension in recognition of the compliance needed with the relative policies or requirements of other government agencies and to give the affected parties an opportunity to adjust with the necessary provisions prior to the actual imposition of the withholding tax.
“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.
“The BIR aims to level the playing field between brick-and-mortar stores, which are regularly complying with their tax obligations and online marketplaces. Whether their business is operated online or through physical stores, sellers and merchants have to pay their taxes,” the tax chief added.
Meanwhile, Revenue Memorandum Circular No. 79-2024 dated July 15 extended the transitory period for digital financial services providers.
“In order to provide additional time to the digital financial service providers to finally complete their respective system adjustments for compliance with the requirements… the prescribed transitory period is hereby further extended for another 90 days or until October 12, 2024,” the circular said.
