Pursuant to Revenue Regulation (RR) 16-2023, the Bureau of Internal Revenue (BIR) has required electronic marketplace (e-marketplace) operators and digital financial services providers (DFSP) to withhold a one percent withholding tax on 1/2 of their gross remittances to sellers or merchants for goods and services sold through their platforms or facilities.
As clarified under Revenue Memorandum Circular (RMC) 8-2024, the e-marketplace operators and DFSPs were given 90 days transitory period from Jan. 15, 2024, or until April 14, 2024, to provide an opportunity to adjust and ensure full compliance with the requirements set in the said RR. Subsequently, RMC 55-2024 was issued extending its implementation for an additional 90 days or until July 14, 2024.
Just recently, on July 15, 2024, the BIR issued RMC 79-2024, which further extends the transitory period for the imposition of withholding tax on gross remittances made by DFSPs to sellers or merchants for another 90 days or until Oct. 12, 2024. However, the BIR retained the deadline for the withholding tax compliance of e-market operators beginning July 15, 2024.
Accordingly, all e-marketplace operators must impose withholding tax on payments to sellers or merchants starting July 15, 2024, while DFSPs shall start imposing withholding tax on payments to sellers or merchants starting Oct. 13, 2024.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants