Recently the Bureau of Internal Revenue (BIR) announced that July 14, 2024, is the new deadline for online businesses to transition to the new withholding tax system, according to a GMA Network news report. Previously the deadline was April 15, 2024 and online businesses with annual earnings of over P500,000 were to be covered by the 1% withholding tax.
To put things in perspective, posted below is an excerpt from the GMA news article. Some parts in boldface…
The Bureau of Internal Revenue (BIR) announced Tuesday that it has extended the deadline for online merchants to transition to the new withholding tax system by 90 days.
According to the agency, Revenue Memorandum Circular No. 55-2024 extended the transitory period for compliance with Revenue Regulations (RR) No. 16-2023 until July 14 after considering the private sector’s request on the implementation.
“This 90-day extension of the transitory period under RR No. 16-2023 shows the BIR’s commitment in listening to the voice of the private sector,” BIR Commissioner Jun Lumagui said in a statement.
“This is part of my administration’s thrust on Excellent Taxpayer Service. We hear the thoughts of the private sector, and if the same is reasonable, then we make policy adjustments for the benefit of the Filipino people,” added Lumagui.
Under RR No. 16-2023, one-half of the gross remittances of e-marketplace operations and digital financial services providers to the sellers or merchants for goods or services paid through their platform shall be subject to a 1% creditable withholding tax.
The BIR said that the online transactions industry has experienced growth during and after the coronavirus pandemic but it appeared that many online sellers were not paying their share in taxes.
RR No. 16-2023 was signed by Lumagui and Finance Secretary Benjamin Diokno in December 2023.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that the new deadline will give all online businesses here in the Philippines enough time to transition into the new withholding tax system?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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