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BIR preparing to tax streaming services, online merchants

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REUTERS

THE Bureau of Internal Revenue (BIR) said Wednesday it is laying the groundwork for taxing online service platforms and merchants including streaming services like Netflix.

In a briefing, Deputy Commissioner for Operations Arnel S.D. Guballa said the BIR is “papunta na (heading towards)” that direction and studying what other countries are doing with regard to value-added tax for such services.

He added that the BIR will apply the destination principle in taxing online services and goods. Using Netflix as an example, he said even if its head office is in Europe, there is consumption in the Philippines which the government can collect taxes from.

Hinahanda na ang BIR kung papaano natin ita-tax pero under international (practice)… kapag tayo ang su-subcribe sa Pilipinas, kasama na sa binabayaran natin china-charge ‘yan sa value-added tax (We in the BIR are readying how we can tax this but under the international practice… if we subscribe here in the Philippines, the value-added tax is based on what we pay),” Mr. Guballa said.

On the other hand, Mr. Guballa said the BIR is focusing on the registration of online sellers, for whom a deadline of July 31 has been set. The BIR said it will not tax small online businesses and will be focusing on large online merchants and sellers.

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“We are looking sa mga mas malaking negosyante (the bigger businesses) in online selling,” he said.

The BIR last week issued a directive for online sellers to register with the agency and pay taxes. Under the Tax Reform for Acceleration and Inclusion Act, those who earn less than P250,000 annually are exempt from paying income tax. — Gillian M. Cortez

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