MANILA, Philippines – Online sellers earning less than P250,000 a year would not have to pay income tax, the Bureau of Internal Revenue (BIR) said Wednesday, June 17, as it defended its circular reminding the group to register and pay tax.
"Puwedeng nakarehistro ka nga pero 'di ka kailangang magbayad ng buwis kung ito ay maliit lamang. Kung ito ay hindi aabot ng P250,000 a year, wala ka babayarang income tax," Tax Deputy Commissioner Arnel Guballa said during the government's Laging Handa briefing on Wednesday, June 17.
(You can be registered but you don't have to pay taxes if it's just a small business. So if your earnings are less than P250,000 a year, you don't have to pay income tax.)
Guballa also said that online sellers earning less than P3 million a year would not have to pay value-added tax (VAT).
But all online sellers, regardless of income, would still have to register, or else pay penalties.
"Kung ikaw ay engaged sa online seliing, kapag nahuli ka ng BIR later magkakaroon ka ng penalties (If you are engaged with online selling and the BIR catches you, you will have penalties)," Guballa warned.
Guballa said the BIR just needs to assess the population of online sellers in the Philippines, and said small vendors should still register "para hindi ka colorum (just so you are not undocumented)."
He added that registration with the BIR is not automated yet.
"Medyo kailangan mag-physical appearance muna tayo sa mga regional district offices dahil hindi pa automated ang registration pero in the soonest time, baka one month and two months, kakayanin na ng BIR na pati registration ay online na," said Guballa.
(Physical appearance is still required in regional district offices because registration is not automated yet, but in the soonest time, maybe in one month and two months, BIR can enable online registration.)
Guballa said the BIR only intends to tax big businesses like Lazada and big foreign big businesses like Netflix.
Guballa said they were studying how to collect from Netflix the VAT charged from its subscribers when they paid the subscription fee. Guballa said this falls under the destination principle.
"Dahil dito po ang consumption sa Pilipinas, dito ang destination ng paggamit ng serbisyo kaya puwede po nating kunin ang VAT para po sa atin sa Philippine government," said Guballa.
(Because the consumption took place in the Philippines, this is where the destination is for the service, so we can get the VAT on behalf of the Philippine government)