Bureau of Internal Revenue Commissioner Romeo D. Lumagui Jr. reiterates the imposition of withholding tax to sellers/merchants by electronic marketplace operators starting July 15, 2024, through Revenue Memorandum Circular (RMC) No. 79-2024. No more extensions will be given after the previous 90-day extension under RMC No. 55-2024.
“Electronic Marketplace Operators will begin imposing Withholding Tax against their sellers/merchants starting July 15, 2024. We have already extended this by 90 days. No further extensions will be given,” Commissioner Lumagui stated.
The BIR has already granted a 90-day extension, prior to RMC No. 79-2024. The previous extension was given in recognition of the compliance needed with the relative policies or requirements of other government agencies and to give the affected parties an opportunity to adjust with the provisions of Revenue Regulation No. 16-2023 prior to the actual imposition of the Withholding Tax.
“Withholding Tax is not a new tax, it’s merely a system of taxation where taxes are collected at source, which will be credited against the total income tax liability of the sellers/merchants. The BIR aims to level the playing field between brick-and-mortar stores, which are regularly complying with their tax obligations, and online market places. Whether their business is operated online or through physical stores, sellers and merchants have to pay their taxes,” Commissioner Lumagui stated.
To clarify, RMC No. 79-2024 only extended the transitory period for digital financial services providers.
