Consultative meeting on Online Transaction by the Burea of Internal Revenue


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A presentation made by the Bureau of Internal Revenue about its draft Memorandum Circular on "Reiterates Taxpayer's Obligations in Relation to Online Business Transactions". It also tackled BIR's understanding of online business transaction types, issues, and concerns. Members of will give their inputs to Janette Toral on or before November 7, 2012 for consolidation and shall be transmitted to BIR on November 8, 2012.

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Consultative meeting on Online Transaction by the Burea of Internal Revenue

  1. 1. CONSULTATIVE MEETINGONLINE TRANSACTIONS 10th Floor, Training Room October 30, 2012
  2. 2. AGENDA:a. Draft Revenue Memorandum Circular “Reiterates Taxpayer’s Obligations in Relation to Online Business Transactions”b. Issues and Concernsc. Other Matters 2
  3. 3. TYPES OF ONLINE TRANSACTIONS: Online transaction websites a. Online shopping b. Online intermediary service c. Online advertisements/classified ads d. Online auction 3
  4. 4. ONLINE SHOPPINGOnline shopping or online retailing is a form of electroniccommerce whereby consumers directly buy goods or services from aseller over the Internet without an intermediary service. An onlineshop, eshop, e-store, Internet shop, webshop, webstore, online store,or virtual store evokes the physical analogy of buying products orservices at a bricks-and-mortar, retailer or shopping center(source: intermediary service - An intermediary (or go-between) isa third party that offers intermediation services between two tradingparties. The intermediary acts as a conduit for goods or services offeredby a supplier to a consumer. (source: buy goods or services from an intermediary serviceprovider who receives commission from the merchant/retailer. 4
  5. 5. ONLINE ADVERTISEMENT/CLASSIFIED ADSOnline advertisement/classified ads - Online advertising is a form ofpromotion that uses the internet and world wide web to deliver marketingmessages to attract customers (source: first advertisement is sometimes given for free for someadvertisement websites and the succeeding advertisement is subject fortransactional fee. Arts and Crafts  Flowers and Gifts Automotive  Food and Beverages Beauty and Wellness  Health and Medical Building and Construction  Home Services Business Services  Manufacturing Buy and Sell  OFW Services Clubs and Associations  Pets Computers and Associations  Photo and Video Computers and Digital Media  Real Estate Death Care  Sports and Fitness Education and Lessons  Talent Management Event Management  Travel and Leisure Fashion  WeddingExample:, AyosDito 5
  6. 6. ONLINE AUCTIONVirtual auctions on the internet. The seller sells the product orservice to the person who bids the highest price. For sellers, onlineauctions open up new sales channels for new products and offerbuyers favorable purchasing conditions. ( AND SERVICES:  Retail items (i.e., bags, electronics, travel, etc.)  Gift Cards  Bid Packs  Cellphone/Electronic Loads Example: Pisobid, Crazybid etc. 6
  7. 7. Obligations in Relation to Online Business Transactions: a. Register the business in the Revenue District Office (RDO) having jurisdiction over the principal/head office by accomplishing:  BIR Form 1901- For individuals  BIR Form 1903 - For Corporations or Partnerships A BIR Certificate of Registration shall be issued by the RDO reflecting therein the tax types required of concerned taxpayer for filing and payment which shall be displayed conspicuously in the business establishment. b. Secure required Authority to Print (ATP) invoices/receipts and register Books of Accounts for use in business.  Manual Books of Accounts, booklets of invoices/receipts  Computerized Accounting System (CAS) and/or its components including e-Invoicing System 7
  8. 8. Obligations in Relation to Online Business Transactions: c. Issue registered invoice or receipt, either manually or electronically, for every sale, barter, exchange, or lease of goods and properties as well as for every sale, barter or exchange of services. Said invoice or receipt shall conform to the information requirements prescribed under RMC No. 62-05 and shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. d. Keep Books of Accounts and other business/accounting records within the time prescribed by law e. File applicable tax returns, pay correct internal revenue taxes, submit information returns and other required tax compliance reports 8
  9. 9. Issues and Concerns: a. Transaction Process  Compliance to BIR regulations on  OR Requirement  Permit to Use, Accounting System/POS b. PSIC for online retailing c. No TINs d. Taxing the Key Players  Phase 1: Online transaction Websites  Phase 2: Other Key Players 9
  10. 10. THANK YOU 10