No More Extension for Online Sellers’ Registration; BIR to Start Crackdown

After extending the deadline for the registration of online businesses, the Bureau of Internal Revenue (BIR) will start to go after unregistered ones this month, even faced with the challenges of lack of physical addresses and the absence of financial documents to audit.

The original deadline for registration was first set on July 31. However, the existing community quarantine restrictions posed difficulties for the online business owners and the BIR personnel, themselves, to comply with the directives. BIR extended the deadline twice—one was at the end of August and the second one at the end of September.

BIR registration of online sellers

After the deadline, businesses operating online will have to face penalties and sanctions similar to those which are imposed on tax-delinquent firms.

According to Internal Revenue Deputy Commissioner Arnel Guballa, there were at least 7,262 web-based businesses registered with the BIR, as of September 30.

He added that the BIR is now working on procedures on how BIR officers will be able to track these unregistered online businesses despite the challenges of mobility and lack of sufficient information.

“How to monitor and apprehend (unregistered online businesses) are on the table,” the BIR official said. However, Guballa did not disclose the specific actions of the BIR but stated that they are already crafting the methodology.

BIR registration of online sellers

Furthermore, the BIR will also have to determine the exact number of online-based businesses operating in the country. They will also have to find out how much exactly they have to collect from these enterprises.

Business registration

Under the country’s Tax Code, all businesses must register with the BIR. Failure to do so may lead to business closure for not less than five days. Once the business has already complied with the requirements of the BIR, the closure order shall be lifted.

Registration is a must, regardless of the size of the business. In terms of tax payment, those businesses earning less than P250,000 in a year do not have to pay any amount.