RMC No. 102-2017: Clarifies the taxation of taxpayers engaged in Philippine Offshore Gaming Operations

Key points

1. Income classes. POGO income is classified as income from Gaming Operations and income from Other Related Services (non-gaming operations).
2. Gaming income. The entire gross gaming receipts or the agreed or pre-determined minimum monthly revenues from Gaming Operations, whichever is higher, are subject to a five percent (5%) Franchise Tax in lieu of all kinds of taxes, levies, fees or assessments, national or local.
3. Non-gaming income. Income from Other Related Services is subject to normal Income Tax, Value-Added Tax (VAT) and other applicable taxes, and the 5% Franchise Tax does not apply. A Licensee with both kinds of income pays the 5% Franchise Tax on gaming revenues and normal taxes on non-gaming revenues.
4. Other entities. An Other Entity, such as a gaming agent, Service Provider or Gaming Support Provider, that is also a POGO Licensee is taxed the same way on gaming and non-gaming activities. One that is not a POGO Licensee and earns only non-gaming income pays normal Income Tax, VAT and other applicable taxes on its entire revenues.
5. Withholding and other taxes. Payments by POGO Licensees or other PAGCOR-licensed entities for goods and services, and compensation, fees and commissions for services rendered to them, are subject to applicable Withholding Taxes. Purchases and sales of goods or services remain subject to existing tax laws and revenue issuances.

Who is affected

• POGO Licensees
• Gaming agents, Service Providers and Gaming Support Providers
• Other entities licensed or authorized by PAGCOR