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Lazada, Shopee and Online Platform Merchants are Reminded of their Tax Obligations

Posted by on August 15th, 2023

The digital revolution has transformed the business landscape in the Philippines. E-commerce platforms like Lazada, Shopee, and Zalora have made buying and selling goods and services more accessible. But with these new opportunities come new tax obligations. Understanding your tax responsibilities is crucial whether you’re a merchant selling your products online or a platform provider facilitating these transactions. Let’s take a closer look at these obligations, guided by the rules set out in Revenue Memorandum Circular No. 55-2013.

Tax Obligations for E-commerce Platforms
Tax ObligationDescription
Income TaxE-commerce platforms are required to pay income tax on their net income.
  Value-Added Tax (VAT)E-commerce platforms are also subject to VAT on gross sales.
Withholding TaxE-commerce platforms are required to withhold tax on certain payments to suppliers and remit this to the BIR.
Tax Obligations for Merchants
Tax ObligationDescription
Income TaxMerchants must pay income tax on their net income from sales made through the platform.
  Value-Added Tax (VAT)Merchants are also subject to VAT on their gross sales. However, small businesses with annual sales below the VAT threshold are exempt.
Percentage TaxMerchants exempt from VAT are subject to a percentage tax on their gross sales.

Fun Fact: Did you know that the BIR issued revenue memorandum circular no. 55-2013 in June 2013 requiring all online sellers to register their businesses and pay taxes? This move was part of the government’s efforts to increase tax collections amid the pandemic. However, it sparked controversy, with many arguing that small online sellers should be exempt from tax during these challenging times.

Call to Action: T.A.X. SATORI

Navigating the complexities of e-commerce taxation can be daunting. But don’t worry. You’re not alone. Join our Tax Satori Community today and gain access to a wealth of resources designed to help you understand and meet your tax obligations. Take advantage of this opportunity to ensure your compliance and avoid potential penalties. Remember, knowledge is power, and in the world of e-commerce, it’s your key to success.

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