The BIR issued Revenue Memorandum Circular (RMC) No. 8-2024 to provide guidance on the timeline and procedures to implement Revenue Regulation (RR) No. 16-2023.
In brief
On 27 December 2023, the BIR published RR No. 16-2023 to amend RR No. 2-1998 and impose withholding tax on the gross remittances by e-marketplace operators and digital financial services providers to sellers/merchants.
On 11 January 2024, the BIR issued RMC 8-2024 to provide guidance on the timeline and procedures to implement RR No. 16-2023.
According to RR No. 16-2023, e-marketplace operators and digital financial services providers are allowed a transitory period of 90 days from the issuance of RMC 8-2024 to comply with the provisions of RR No. 16-2023.
Coverage of the regulations
The following sellers/merchants are excluded from the coverage of the regulations:
- Those whose annual total gross annual remittances from all e-marketplace operators and digital financial services providers do not exceed PHP 500,000.
- Those exempt from income tax or subject to a lower income tax rate pursuant to any existing law or treaty.
Obligations of e-marketplace operators and digital financial services providers
E-marketplace operators and digital financial services providers are required to observe the following:
- Ensure that the sellers/merchants are registered with the BIR by requiring the sellers/merchants to submit a copy of their BIR Certificate of Registration (BIR Form No. 2303) prior to permitting the sellers/merchants to use the platform or facility.
- Require the sellers/merchants who are exempt from or subject to a lower income tax rate pursuant to any existing law or treaty to submit the necessary certification or document to prove their entitlement to the exemption or lower income tax rate.
- Direct sellers/merchants to submit the BIR-received Sworn Declaration if the sellers/merchants claim that their annual total gross annual remittances from all e-marketplace operators and digital financial services providers do not exceed PHP 500,000 (which will exclude them from the coverage of RR No. 16-2023).
- Monitor the gross payments of buyers/customers, and deduct the withholding tax prescribed under RR No. 16-2023 before remitting the payments to the sellers/merchants.
- Provide sellers/merchants the Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) within the period prescribed under the Tax Code and relevant regulation revenue issuances, or upon request by the sellers/merchants.
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