BIR clarifies tax status of offshore gaming firms

The Bureau of Internal Revenue has issued special rules on the registration of foreign-led Philippine offshore gaming operators (Pogo).

“Due to different attributes of a foreign corporation, there shall be a special implementation and administration with regard to the registration of Pogo licensee who is a foreign corporation,” Internal Revenue Commissioner Caesar R. Dulay said in Revenue Memorandum Circular (RMC) No. 78-2018 issued on Sept. 6.

Citing the previously issued RMC 102-2017 also concerning taxes slapped on Pogo, Dulay said that “online activity is sufficient to constitute doing business in the Philippines; thus, a foreign corporation engaged in Pogo is considered as resident foreign corporation engaged in business in the Philippines and not a nonresident foreign corporation.”

The National Internal Revenue Code or the Tax Code defines a resident foreign corporation as a foreign corporation engaged in business or trade in the country, while a nonresident foreign corporation has no business here.

The BIR earlier defined Pogo as “the offering by a licensee of Pagcor (Philippine Amusement and Gaming Corp.) of online games of chance via the internet, using a network and software or program, exclusively to offshore authorized players, excluding Filipinos abroad, who have registered and established an online gaming account with the licensee.” —BEN O. DE VERA