RMC No. 8-2024: Clarifying the provisions of Revenue Regulations No. 16-2023 imposing Withholding Tax on gross remittances made by electronic marketplace operators and digital financial services providers to sellers/merchants

Key points

1. Effectivity and transition. RR No. 16-2023 takes effect January 11, 2024, after publication in Manila Bulletin on December 27, 2023. Operators and DFSPs have ninety (90) days from the Circular’s date of issuance to comply with other agencies’ requirements before the tax is imposed, and unregistered existing sellers have the same period.
2. The ₱500,000.00 threshold. Remittances up to ₱500,000.00 are not subject to the tax and are counted from all remittances the seller receives from operators and DFSPs. Once the platform determines the threshold was exceeded, the tax is deducted from the remittance exceeding it and from later remittances.
3. Sworn Declaration. Sellers expecting not to exceed ₱500,000.00 submit a BIR-received Sworn Declaration (Annex A) on application or within the transition period, then on or before the 20th day of the first month of each taxable year. Without it, the tax is automatically deducted regardless of actual remittances.
4. Exempt or lower-rate sellers. Sellers exempt or subject to a lower income tax rate under a law or treaty submit a duly issued certification as proof to the operator.
5. Operator duties. Operators and DFSPs require BIR Form No. 2303 before allowing sellers to use the platform, and collect certifications and Sworn Declarations. They monitor payments and deduct the tax, and issue BIR Form No. 2307 within the Tax Code period or on request.
6. Accounts and liability. Sellers cannot receive payments through personal accounts, and accounts must be under the BIR-registered tradename. Where payment passes through several facilities, the last facility with control of the payment withholds.

Who is affected

• E-marketplace operators
• Digital financial services providers
• Online sellers and merchants

Deadlines and effectivity

• RR No. 16-2023 effective January 11, 2024
• Ninety (90) days from issuance of the Circular to comply
• Sworn Declaration on or before the 20th day of the first month of each taxable year