RMC No. 25-2022: Clarifies the taxability of Electronic Sabong (e-Sabong) operations as regulated by the Philippine Amusement and Gaming Corporation (PAGCOR)

Key points

1. Compliance duties. E-Sabong entities register at the RDO over their principal place of business or head office (or residence for individuals), file returns on time, keep books, and withhold and remit taxes. The BIR may inspect totalizators and other betting devices used for online or remote betting on locally licensed games.
2. Operator gaming income. Gaming income of an e-Sabong Operator is subject to a five percent (5%) Franchise Tax in lieu of all internal revenue taxes, except VAT or Percentage Tax depending on the threshold. Goods and services provided to PAGCOR are VAT zero-rated, and the tax is remitted directly to the BIR, separate from PAGCOR’s own 5% Franchise Tax.
3. Operator service and other income. Service income, and income from activities not authorized by the PAGCOR e-Sabong license, is subject to regular Income Tax, VAT or Percentage Tax, Withholding Tax and other taxes. The 5% Franchise Tax does not apply to it.
4. Agents, cockpit owners and others. Commissions of Master Agents, Agents, Promoters and Coordinators, income of Cockpit Owners and Operators, and income of Third Party OCBS Hosts and Game Cock Owners are subject to regular taxes. The operator withholds Creditable Withholding Tax at 5%/10% for individual agents and 10%/15% for non-individual agents, 5% for cockpit owners, and 2% for OCBS hosts and game cock owners.
5. Unauthorized operators. Unauthorized e-Sabong operators and their ancillary service providers are not covered by the PAGCOR charter fiscal regime. They are subject to NIRC taxes and penalties, in addition to sanctions from regulators.

Who is affected

• E-Sabong Operators
• Master Agents, Agents, Promoters and Coordinators
• Cockpit Owners and Operators
• Third Party OCBS Hosts and Game Cock Owners