SMALL-SCALE online sellers are exempted from paying the one percent withholding tax on electronic marketplace operators and digital financial service providers, the Bureau of Internal Revenue (BIR) said yesterday.
The BIR said the following sellers are exempted from paying the withholding tax:
* If the annual total gross remittances to an online seller/merchant for the past taxable year has not exceeded P500,000; or
* If the cumulative gross remittances to an online seller/merchant in a taxable year has not yet exceeded P500,000; or
* If the seller/merchant is duly exempt from or subject to a lower income tax rate pursuant to any existing law or treaty.
The tax bureau’s “Revenue Regulations No. 16” imposes a one percent creditable withholding tax on half of the gross remittances made by electronic marketplace operators and digital financial service providers to sellers or merchants. This translates to 0.5 percent of the total gross remittances.
Online shopping apps, food delivery apps, online hotel booking sites, transport service apps, and other online platforms are covered by this policy.
E-wallet platforms like GCash and Paya are also covered, the BIR said. (ABS-CBN News)
