The Bureau of Internal Revenue (“BIR”) recently issued Revenue Regulations (“RR”) No. 15-2024 (“RR 15-2024”) to prescribe the guidelines on the registration of brick-and-mortar stores and online stores with the principal purpose of leveling the playing field by equally regulating and uniformly taxing physical and online businesses.
RR 15-2024 covers natural and juridical persons who are engaged in the following trade or business in the Philippines:
- Sale and/or lease of goods or services through brick-and-mortar stores;
- E-commerce or online businesses, whether formal or informal, including sale, procurement, or availment of physical or digital goods (such as virtual items in online games), digital content/products, digital financial services, entertainment services, travel services, transport and delivery services, educational services, social commerce, on-demand labor and repair services, and property and space rentals;
- Operation of digital or e-market platforms;
- Sale and/or lease of goods and services through digital platforms;
- Digital content creation and streaming that are income generating;
- E-retailing of goods and services;
- Sale of creative or professional services, on-demand or freelance services or digital services supplied over the internet; and
- Other forms of online businesses.
Covered persons must register with the BIR based on the following guidelines:
- A person engaged in the sale and/or lease of goods and services, through brick-and-mortar stores, shall register its head office at the BIR Revenue District Office (“RDO”) having jurisdiction over the place of its business address. Any branch or facility shall be registered with the BIR RDO having jurisdiction over the place of business or location of the said branch or facility.
- A person operating an online store for its brick-and-mortar store shall register its store name with the BIR as an additional business name attached to the head office or branch managing or operating the said online store/business and shall not be registered as a branch.
- A person engaged in the sale and/or lease of goods or services through website, webpage, platform or application who do not have a brick-and-mortar store shall register at the BIR RDO having jurisdiction over the place of residence for individuals or principal office address registered with the Securities and Exchange Commission for juridical entities.
After registration, covered persons shall post their original Certificate of Registration (“COR”)/Electronic Certificate of Registration (“eCOR”) at the place where the business is conducted and at each branch/facility in a way that the same is clearly and easily visible to the public. For online businesses, they must display their BIR COR/eCOR on their website, webpage, account page, online platform or application.
Unregistered physical or online businesses may be suspended by the BIR through the issuance of a Closure/Take Down Order. The said Order shall be effective for a period of at least five (5) days and shall be lifted only upon compliance with the BIR registration requirements. The BIR may also file the appropriate charges against the person concerned, or in the case of corporate taxpayers, against their responsible officers, under the Run After Tax Evaders (RATE) Program.
Lessors and sub-lessors of commercial establishments and operators of digital platform are responsible for ensuring that all their lessees and online sellers/merchants are duly registered with the BIR, with taxpayer’s identification number, and compliant with the invoicing requirements.
The BIR warns that failure to enact or strictly enforce internal mechanisms or rules to prohibit lessees and online sellers or merchants without the required BIR COR/eCOR from further selling, posting, listing, or offering goods and/or services in their respective physical stores, website, webpage, account, application and digital platforms, shall be construed as an act of aiding or abetting in the commission of the offense.