BIR extends online trade registration to Aug. 31

The Bureau of Internal Revenue (BIR) has given online businesses one more month, or until Aug. 31, to register without penalty as movement restrictions remained in place despite a less-stringent COVID-19 community quarantine.

The original cutoff date was July 31 or this coming Friday, but Internal Revenue Commissioner Ceasar R. Dulay acknowledged in Revenue Memorandum Circular (RMC) No. 75-2020 issued on Wednesday (July 29) that “online merchants have signified their cooperation but are requesting for more time to comply.”

Among the reasons cited were:

• The current problem in going to the district offices
• Fear of dealing face-to-face with others
• Limited open bank branches

On top of the deadline extension, Dulay said online traders who would voluntarily declare previous transactions for tax purposes and pay these before the new deadline would be spared penalties for late filing and payment.

But after the deadline, Dulay warned that online traders who continued to do business without registering or updating requirements and fail to pay taxes “shall be imposed with the applicable penalties under the law.”

In June, Dulay issued RMC 60-2020, which reminded online stores of their registration and tax obligations under the Tax Code and guidelines issued by then BIR chief Kim S. Jacinto-Henares in 2013.

Henares’ RMC 55-2013 required all online stores—specifically, those engaged in online business transactions, including online retailing through virtual shopping malls, online marketplaces, web stores, and similar websites—to register and pay their taxes.

The government had also found that online sales flourished as more and more enterprises did business via the internet, social media, and other digital channels during the COVID-19 lockdown that shut down many brick-and-mortar marketplaces.

Finance Secretary Carlos G. Dominguez III had said that RMC 60-2020 was part of the government’s efforts to implement a tax-collection program on digital transactions for both goods and services, just as it also collected taxes from physical stores.

“What we are asking right now is just for online sellers to register with the BIR. Whether or not they will be subject to tax depends on their specific circumstances,” Dominguez had said.

TSB