Tax Articles

Registration Requirements for Online Sellers

By: Atty. Rodel C. Unciano

Atty. Rodel C. Unciano Partner   +632 8403-2001 loc.380 This email address is being protected from spambots. You need JavaScript enabled to view it. View Profile

Section 236 of the Tax Code, as amended, requires registration of every person subject to any internal revenue tax with the Bureau of Internal Revenue (BIR). It is the duty of all persons engaged in business in the Philippines to comply with business registration requirements and pay taxes, where applicable. Any person who is engaged in any trade or business and fails to register the same with the BIR shall be administratively and criminally liable for fines and penalties.

With the proliferation of online selling and other online business activities throughout the country, the Department of Finance (DOF) has recently issued new guidelines in the registration of online sellers and laid down penalties, which include closure of business operations as a penalty for not being able to register with the BIR within the period prescribed by law, which should be made on or before the commencement of business or before payment of any tax due or upon the filing of a return, statement or declaration, as required under the Tax Code.

So, as a general rule, a person engaged in the sale and/or lease of goods and services through a physical store (brick-and-mortar store) shall register its head office at the BIR district office having jurisdiction over the place of business address while any branch and/or facility shall be registered with the BIR district office having jurisdiction over the place of business address or location of the branch and/or facility.

Now, under Revenue Regulations (RR) 15-2024, a person operating, maintaining, or setting up an online presence or an online store for its brick-and-mortar store shall, in addition to the registration of its physical store, likewise, register its store name with the BIR as an additional "business name" attached to the head office or branch managing or operating the said online store or business. The online presence or an online store attached to the head office or a branch shall not be separately registered as a branch.

On the other hand, a person engaged in the sale and/or lease of goods and services through website, webpage, page, platform, or application who does not have a brick-and-mortar store, shall register at the BIR district office having jurisdiction over the place of residence for individuals or principal place of business registered with the Securities and Exchange Commission (SEC) for juridical entities.

All covered persons operating a business through a website, social media, or any digital or electronic means, shall display conspicuously a copy of the BIR Certificate of Registration (COR) on their website, webpage, account, page, platform, or application in a manner that is easily accessible and visible to buyers or customers visiting the seller’s webpage, account, page, platform or application.

To aid the BIR in seeing to it that lessees engaged in online selling are duly registered with the BIR, the lessors, sub-lessors of commercial establishments/buildings/space, and operators of digital platform, including e-marketplace platforms, are now mandated under the regulations to ensure that all their respective lessees and online sellers or merchants are duly registered with the BIR. Failure to do so shall be construed as an act of aiding or abetting in the commission of the offense. So, under the regulations, a lessor allowing lessees or online sellers/merchants to engage in business without the required BIR registration shall be meted with fines and penalties as well.

To recall, the BIR’s call for the registration of taxpayers doing online business transactions is not new. There have been issuances in the past reminding online sellers to register with the BIR and issue registered invoices or receipts, either manually or electronically, for every barter, sale, or exchange of goods and services.

In fact, RR 16-23 issued towards the end of last year already required e-marketplace operators and Digital Financial Service Platforms (DFSP) to ensure that the online sellers/merchants they are transacting with are duly registered with the BIR, in addition to their obligation to withhold remittances to the merchants. And to add, under the proposed digital service law, non-resident supplier of digital services dealing with non-VAT registered taxpayers should also register with the BIR.

Compliance with the BIR registration requirement is a must to avoid inconvenience in failing to do so. It is an obligation which every law-abiding taxpayer is mandated to do, in addition to paying taxes that are due.