D) Online Auction
(1) Auction Webstores
A. If buyer’s payment for voucher/coupon/bid packs is:
- thru credit card companies: Auction Webstores are required to (a) issue electronically the BIR registered Invoice/OR to the buyer for the purchase price of bid packs (fee for right to participate in the bidding); (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% WT.
- thru banks: Auction Webstores are likewise required to (a) issue Invoice/OR to the depositor-buyer for the payment of the bid packs; and (b) issue acknowledgment receipt to the bank for the amount received
B. Sale of Auctioned Item to the highest bidder:
Auction Webstores are obliged to issue, either electronically or manually, the BIR registered Invoice/OR for the winning bid price to the buyer/bid winner. The above paragraph shall apply for payments received thru the modes discussed.
(2) Merchant/ Retailer: If buyer’s payment is:
- thru credit card companies: 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.
- thru the banks: 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.
- 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.
The Buyer/Customer is required to pay the price of the bid packs to designated payment gateway: Consequently, he/she shall (a) receive Payment Confirmation from the payment gateway for the amount paid for the bid packs; (b) receive from the auction webstore the BIR registered electronic copy or original copy of manually issued OR for the purchase of bid packs; and (c) if winning bidder, he/she shall receive the goods/service together with the invoice/OR for the bid price of goods/service.
(4) Payment Gateways
- Credit Card Companies are obliged 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%.
- 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.
IV. Penalty Clause
Any person engaged in internet commerce who fails to comply with applicable tax laws, rules and regulations shall be subject to the imposition of penalties provided for under the existing laws, rules, and regulations, in addition to the imposition of penalties pursuant to the applicable Section/s under Chapters II and IV, Title X of the National Internal Revenue Code of 1997, as amended.
All concerned are hereby enjoined to give this circular as wide a publicity as possible.
KIM S. JACINTO-HENARES
Commissioner of Internal Revenue
Tell us what you think! 😉