RMC 55-2013: Tax Rules and Obligations on Online Business Transactions

B) Online Intermediary Service

(1) Online Intermediary– If the buyer’s payment is:


1. thru credit card companies:

1.1 If the Online Intermediary is the agent of the merchant, they are required to (a) issue the merchant’s acknowledgement receipt (for goods)/OR (for services) for buyer to claim the goods/service (in this case, the merchant acting as the principal shall assign a number of pads of such receipt to the intermediary/agent); (b) ensure merchant delivers the goods to buyer with accompanying invoice or merchant performs the purchased service; (d) issue OR to merchant for the full amount of the agreed commission, and reflecting therein the amount withheld by merchant.

1.2 If the Online Intermediary control the collections/payments of buyers or markets products/services for its own account, and are therefor considered the retailer/merchant, they are required to (a) issue electronically the invoice/OR for the full amount of the sale to the buyer; (b) issue acknowledgment receipt to the credit card company for the amount received; (c) pay the commission of credit card company net of 10% EWT (d) remit the balance to the merchant retailer net of intermediary’s agreed mark-up/commission (include in the said remittance to merchant/retailer the 10% EWT to be remitted by merchant to the BIR)

2. thru the banks-

2.1 If the Online Intermediary is the agent of the merchant, they are required to (a) issue the merchant’s acknowledgement receipt (for goods)/OR (for services) for buyer to claim the goods/service (in this case, the merchant acting as the principal shall assign a number of pads of such receipt to the intermediary/agent); (b) ensure merchant delivers the goods to buyer with accompanying invoice or merchant performs the purchased service; (d) issue OR to merchant for the full amount of the agreed commission, and reflecting therein the amount withheld by merchant.


2.2 If the Online Intermediary control the collections/payments of buyers or markets products/services for its own account, and are therefor considered the retailer/merchant, they are required to (a) issue the invoice/OR for the full amount of the sale to the buyer; (b) issue acknowledgment receipt to the bank for the amount received; (d) remit the amount to the merchant retailer net of intermediary’s agreed mark-up/commission (include in the said remittance to merchant/retailer the 10% EWT to be remitted by merchant to the BIR)

3. Cash on delivery or in the office of merchant (on sale of goods for pick-up by the customer): Online Intermediary Sellers are required to secure the invoice/OR from the merchant before delivery of goods to buyer/performance of service and to issue either electronically or manually the BIR registered Invoice/OR for the full amount of the sale to the buyer. Issue OR for the amount of commission received, if agent.

(2) Merchant/Retailer– The Merchant/Retailer is obliged to (a) issue Invoice/OR to the buyer; (b) receive payment from the intermediary net of commission but should include the 10% EWT on commission that should have been withheld from the intermediary; and (c) remit the 10% EWT on commission to the BIR.

(3) Buyer/ Customer– If payment of the goods/service is thru:

  1. Credit Card- The Buyer/Customer is required to (a) receive the Payment Confirmation from the credit card company for the purchase price charged; and (b) receive Invoice/OR upon delivery of the goods or rendering of service.
  2. Banks- The Buyer/Customer is required to (a) receive validated copy of the deposit slips made in the name of the intermediary or merchant, whichever if applicable; and (b) receive Invoice/OR upon delivery of the goods or rendering of service.
  3. Cash on delivery or in the office of intermediary (pick-up): The Buyer/Customer is similarly required to receive either the electronic or manually registered Invoice/OR in the name of merchant/retailer coursed through the intermediary for the full amount of payment made to the intermediary.

(4) Payment Gateways

  1. Credit Card Companies are required to (a) issue Payment Confirmation, in the name of the merchant-seller or the intermediary, whichever is applicable, for the purchase price charged to buyer; (b) remit to merchant-seller or intermediary the price less EWT of ½ of 1%; (c) remit to BIR the EWT of ½ of 1%; and (d) receive agreed commission from merchant or intermediary, net of EWT of 10%.
  2. Banks (over the counter) are similarly required to (a) issue validated bank deposit slips in the name of merchant or intermediary, whichever is applicable, to the depositor-buyer; and (b) remit the amount to the merchant or intermediary.

(5) Freight Forwarders and Online Website Administrators are likewise obliged to issue, either electronically or manually, the BIR registered OR for the service fees paid by the merchant, intermediary or advertisers.

C) Online Advertisement

(1) The Advertising Entity is obliged to issue either electronically or manually the BIR registered invoice/OR to the merchant or retailer for the full amount of advertising fee (amount received is net of withholding). Consequently, it shall receive from the advertiser/merchant at the prescribed time a Certificate of Creditable Tax Withheld at Source (Form 2307) for the amount of tax withheld.

(2) Merchant/ Retailer

As Online Advertiser: Merchant/Retailer as online advertiser is obliged to (a) pay the online advertising entity for the advertising fee, net of 2% EWT; (b) receive from said entity the BIR registered electronic copy or original copy of manually issued OR for the amount of advertising fee paid; and(c) remit to BIR the EWT from the advertising entity.

As Merchant/Retailer: If buyer’s payment is:

  1. thru credit card companies: The Merchant/Retailer is obliged to (a) issue electronically the BIR registered Invoice/OR for the full amount of the sale to the buyer; (b) issue acknowledgment receipt to the credit card company for the amount received; and (c) pay the commission of credit card company net of 10% EWT.
  2. thru the banks: The Merchant/Retailer is required to (a) issue Invoice/OR to the buyer for the payment of the goods/services; and (b) issue acknowledgment receipt to the bank for the amount received.
  3. Cash on delivery or in the office of merchant (on sale of goods for pick-up by the customer): The Merchant/Retailer is required to issue either electronically or manually the BIR registered Invoice/OR for the full amount of the sale to the buyer.

(3) Buyer/Customer: If payment to seller is:

  1. thru credit card: The Buyer/Customer is required to (a) receive the Payment Confirmation, under the name of the merchant, for the purchase price charged by the credit card company; and (b) receive Invoice/OR from the merchant upon delivery of the goods or performance of service.
  2. thru the banks: The Buyer/Customer is similarly required to (a) receive validated copy of the deposit slips made in the name of the merchant; and (b) receive Invoice/OR from the merchant upon delivery of the goods or performance of service.
  3. Cash on delivery or in the office of merchant (on sale of goods for pick-up by the customer): The Buyer/Customer is required to receive either the electronic or manual registered Invoice/OR for the full amount of payment made to merchant/retailer.

(4) Payment Gateways

  1. Credit Card Companies are required to (a) issue Payment Confirmation (in the name of the merchant-seller) for the purchase price charged to buyer; (b) remit to merchant-seller the price amount less EWT of ½ of 1%; (c) remit to BIR the EWT of ½ of 1%; and (d) receive agreed commission from merchant, net of EWT of 10%.
  2. Banks (over the counter) are similarly required to (a) issue validated bank deposit slips in the name of merchant to the depositor-buyer; and (b) remit the amount to the merchant.

(5) Freight Forwarders and Online Website Administrators are likewise obliged to issue either electronically or manually the BIR registered OR for the service fees paid by the merchant or advertisers.

3 Responses to "RMC 55-2013: Tax Rules and Obligations on Online Business Transactions"

  1. with the proliferation of on-line businesses how can the BIR or the government control them for the purpose of paying business tax, fees and charges. with the thousands on on-line business it will be a bulk of taxes for the government. Cannot the government control them electronically? DICT might have the answer.

    Reply
  2. The where are you principally doing your business? What form of business are you doing po ba? Kasi whatever business it is, you need to register a business address po. If you don't want to make your residence address as your business address, you have to find a new address (e.g. rent some office space) that you can make your business address.

    Reply

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