Electronic Marketplace Operators to Implement Withholding Tax on Sellers Starting July 15, 2024

Source: Bureau of Internal Revenue (BIR)

In a recent announcement, the Bureau of Internal Revenue (BIR) has confirmed that electronic marketplace operators will begin imposing withholding tax on their sellers and merchants starting July 15, 2024. This move aims to level the playing field between online platforms and traditional brick-and-mortar stores by ensuring that all businesses comply with tax obligations. Commissioner Romeo D. Lumagui Jr. emphasized that this is not a new tax but a system where taxes are collected at the source, which will be credited against the total income tax liability of the sellers and merchants. He further stated that no further extensions will be granted beyond the previous 90-day extension provided under Revenue Memorandum Circular No. 55-2024.

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The BIR has granted a 90-day extension to allow affected parties to adjust to the provisions of Revenue Regulation No. 16-2023 before the actual imposition of the withholding tax. This initiative is part of the BIR's efforts to ensure fair tax compliance across all business platforms, whether online or physical. Sellers and merchants are advised to prepare for the upcoming changes to avoid any compliance issues.