No tax exemption for online sellers , says BIR

BIR tax for onlineOnline sellers are not exempted from paying taxes according to the Bureau of Internal Revenue (BIR).

BIR reiterated on its new memorandum issued that online sellers are obliged to pay their taxes.

According to Internal Revenue commissioner Kim Henares, they are already starting to collect taxes from individuals who doing business online.

In a report of, Henares said the existing tax laws and revenue issuances on the tax treatment of purchases (local or international) of goods (tangible or not) shall apply to all transactions wherein consumers directly buy goods or services from a seller and an intermediary or third party over the Internet. Therefore, those using online social networks such as Facebook must register as a taxpayer.

She added that failure of online sellers to register with the BIR would result in the imposition of appropriate penalties based on the National Internal Revenue Code.

Henares further explained that online sellers must issue receipts to every costumer who purchased goods, properties and obtained services.

“The law requires the issuance of receipts by online sellers for every sale of goods and properties or exchange of service. The receipt must bear the full amount of the sale to the buyer,” Henares said.

The rules also requires online sellers to process manually or electronically the required Authority to Print (ATP) invoices and register books of accounts for use in business.

They must file and pay applicable tax returns on or before the due dates as well as submit a summary list of sales/purchases including the payees.

Those who go online to deliver marketing messages to find buyers and those who do online auctions are also covered by the rules.

PhilStar report further said that online merchants or retailers are mandated to issue acknowledgement receipt to the credit card company or payment gateways for the amount received. They must also pay the commission of credit card company net of 10 percent expanded withholding tax.

“Payment gateways which refer to banks, credit card companies, financial institutions and bill paying services are similarly required to issue validated bank deposit slips in the name of the merchant or intermediary and remit the amount to the merchant less EWT of one half of one percent. Freight forwarders and online website administrators are likewise required to issue the BIR registered OR for the service fees paid by the merchant or advertisers. The merchant/retailer is obliged to pay the online advertising entity for the advertising fee, net of two percent EWT,” PhilStar said.

Henares said that they are doubling their effort to attain their collection goal in the end of the year. IMT


  1. Good morning!

    I have a list of friends on Facebook that uses the media network as a mode of their business transactions. Perhaps the BIR would like to impose them their responsibilities to pay for the penalties and duties to our Government. I have more or less 100 friends who are currently doing sales online on Facebook.

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