Special InTAX: January 2024 Issue 1 | Volume 6

Department of Finance

The Department of Finance (DOF) issued Revenue Regulations (RR) No. 16-2023, 10 January 2024, to implement the new threshold for the sale of house and lots and other residential dwellings for VAT-exemption purposes to Php3,600,000 effective 01 January 2024 (Section 2, Sub-section 4.109.1 (B)(p) of RR No. 4-2021, as amended).

Bureau of Internal Revenue

The Bureau of Internal Revenue (BIR) issued the following:

Revenue Memorandum Circular (RMC) No. 08-2024, dated 15 January 2024, to clarify the provisions of the RR No. 16-2023 imposing a withholding tax (i.e., expanded withholding tax or EWT) on gross remittances made by electronic marketplace (e-marketplace) operators and digital financial services providers (DFSPs) to sellers/merchants.

The pertinent clarifications in the RMC are:

• The effectivity of RR No. 16-2023 is 11 January 2024, 15 days after publication in Manila Bulletin on 27 December 2023.
• E-marketplace operators and DFSPs has a 90-day transitory period from the date of issuance of the RMC to comply with the provisions of RR No. 16-2023 as well as the relative policies or requirements of other government agencies.  
  
• The PHP500,000 annual total gross remittances threshold shall consist of the total amount of remittances received by the online seller/merchant from ALL e-marketplace operators and DFSPs. The e-marketplace operators and/or DFSPs shall withhold the prescribed withholding tax if it determines on a particular remittance that the gross remittances in its online platform exceeds the threshold amount anytime during the taxable year; upon receipt of the BIR-received sworn declaration (SD) indicating the sellers/merchants have exceeded the threshold; or if the seller/merchant failed to submit to the e-marketplace operators and/or DFSPs the required BIR-received SD within the prescribed period (Q&A Nos. 3 and 7).
• Q&A No. 4 provides for the specific obligations of sellers/merchants under RR No. 16-2023 including the registration with the BIR prior to the use of the e-marketplace facility and the submission to the e-marketplace operator of any proof in case the latter invokes exemption or entitlement to a lower tax rate.
  
• Q&A No. 6 provides for the obligations of the e-marketplace operators and DFSPs under RR No. 16-2023 and this includes not allowing existing unregistered businesses in an e-marketplace to sell goods and services in their platform/facility, after the transitory period prescribed under this RMC.
  
• All payments/remittances/transfers covered under RR No. 16-2023 should always be under the seller/merchant’s business account under its registered tradename. 
  
• If the e-marketplace platform advances the payment to the seller, i.e., it does not collect the payment of the buyer on behalf of the seller (hence, no remittance of payment to the seller), it is not subject to withholding tax under RR No. 16-2023. EWT imposed under RR No. 16-2023 only applies to remittances to seller with respect to payments for the goods/services sold/paid collected on the latter’s behalf.
  
• In the event that the payment is transmitted to the seller/merchant through different facilities, the last facility which has control of the payment before completely remitting the same to the seller/merchant shall be liable to withhold the taxes under RR No. 16-2023.
  
• BIR Form No. 0619-E shall be filed for the first two months of the quarter and the revised BIR Form No. 1601-EQ for the last month of the quarter using the additional ATC for creditable withholding tax imposed by the RR (to be issued in a separate RMC).
  
• The violation of any of the provisions of RR No. 16- 2023 shall be subject to appropriate penalties under the Tax Code, relevant laws, rules and regulations.
  

RMC No. 09-2024, dated 15 January 2024 clarifies that taxpayers should disregard the surcharge automatically computed in amended returns filed through the electronic Filing and Payment System (eFPS), provided the original return was filed on or before the set deadline. The RMC also mentioned that the eFPS is being enhanced to adjust the computation of the surcharge. 

Here are the full text of the issuances: RR No. 01-2024, RMC No. 08-2024, RMC No. 08-2024 Annex A, and RMC No. 09-2024.