Online Sellers are Now Required to Register Under BIR

To ensure tax compliance, the Bureau of Internal Revenue (BIR) is now requiring all ‘online sellers,’ or those who conduct business through digital or electronic means, to register and declare past transactions.

Through Revenue Memorandum Circular No. 60-2020, the BIR reminds the obligations of persons conducting business and earning income in any manner or form to ensure that their businesses are registered, according to the provisions of Section 236 of the Tax Code, as amended.

The memorandum circular is applicable, not only to partner sellers/merchants, but also to other stakeholders such as payment gateways, delivery channels, internet service providers, and other facilitators.

registration of online business

They are given until July 31, 2020, to register their business activity and update their registration status so as not to incur penalties.

Likewise, they are encouraged to voluntarily declare their past transactions subject to pertinent taxes and pay such before the deadline.

Upon registration as business entities, they are advised to comply with the provisions of the Tax Code and other applicable tax revenue issuances particularly on the following;

  1. Issuance of registered Sales Invoice or Official Receipt for every sale of goods or services to clients, customers, or buyers;
  2. Keeping of registered Books of Accounts and other accounting records of business transactions;
  3. Withholding of taxes, as applicable;
  4. Filing of required tax returns; and
  5. Payment of correct taxes due on time.

registration of online business

Existing registrants are also enjoined to comply with the said provisions.

Failure to comply

Non-compliance with the memorandum circular, such as failure to register or update business registration, declare past due or unpaid taxes, shall be imposed with applicable penalties under the law, existing revenue rules, and regulations.

Registration of business or updating of business registration is usually done in the Revenue District Office (RDO) with jurisdiction over the place where the Head Office of the company or over the area of residence of the individual taxpayer.

Learn more about registering an online business with the BIR here.