Online sellers operating on irregular basis not required to register – DTI

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The Department of Trade and Industry (DTI) on Friday clarified online sellers who operate on an “irregular” basis or sell homemade products as a hobby are not required to register.

“If one is just selling intermittently or on an irregular basis or selling homemade stuff as a hobby, it is understood they are not yet in business thus they are not required to register,” Trade and Industry Secretary Ramon M. Lopez said during the virtual hearing of the House Ways and Means Committee.

His remark came after the Bureau of Internal Revenue (BIR) issued a memorandum on June 1 reminding businesses that earn income “through the use of any electronic platforms and media, and other digital means” to register on or before July 31. It also “encouraged” these businesses to voluntarily declare their past transactions and pay taxes on these without any penalty on or before July 31.

In 2013, BIR issued a memorandum reminding businesses that online sales are taxable, but only the 2020 circular imposed a deadline to settle past taxes.

Mr. Lopez said online businesses that generate regular sales, even if such activity is small in size, must be registered.

“Anyway, the annual income below P250,000 is exempted from the income tax according to the BIR ruling,” he added.

Mr. Lopez underscored the importance of registering with the government, saying this is “key to consumer protection.”

“There is greater traceability if online sellers are registered and this increases the trust factor and confidence of online buyers in making the transaction online,” he said.

Lawmakers also urged the BIR to automate filing and payment of taxes, lessen the requirements for registration, and remove the registration fee of P500 to incentivize online businesses to register.

“We are studying that. We are really streamlining the registration process,”BIR Deputy Commissioner Arnel S.D Guballa said. — Genshen L. Espedido