AMID a thriving digital economy in the country, the Bureau of Internal Revenue (BIR) has introduced a new regulatory measure that covers all persons engaged in business using digital platforms.
Revenue Regulations 15-2024, released on Aug. 15, 2024, stipulates that persons engaged in business, including brick-and-mortar stores and online businesses — whether selling goods, offering services, operating digital platforms, digital content creators or working as freelancers — are now mandated to register with the BIR. Failure to do so may result in administrative penalties and criminal liabilities.
The guidelines on the required place of registration of different forms of business operations are as follows:
a. Brick-and-mortar stores — in the case of its head office, at the BIR district office that has jurisdiction over the place of business address. In the case of a branch and/or facility, at the BIR district office that has jurisdiction over the place of business address or location of the branch and/or facility.
b. A person operating, maintaining or setting up an online presence or 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 or business and shall not be registered as a branch.
c. Online businesses — for individuals, at the BIR district office that has jurisdiction over the place of residence. For juridical entities, at the BIR district office that has jurisdiction over the principal place of business registered with the Securities and Exchange Commission (SEC).
Penalties range from P1,000 for late registration to P50,000 for businesses subject to excise tax that fail to register. In more serious cases, criminal charges may be filed against those who deliberately avoid registration.
Moreover, lessors, sub-lessors of commercial establishments/buildings/space, and operators of digital platforms are responsible for ensuring their tenants and online sellers are properly registered with the BIR. Lessors and digital platforms may incur fines of P20,000 per branch or establishment for allowing unregistered sellers to operate.
Once registered, the BIR also requires businesses to display their Certificate of Registration (COR) or Electronic Certificate of Registration (eCOR) at their physical location and each branch, where it can be easily seen by the public. For businesses operating online through websites, social media or digital platforms, the eCOR must be visibly posted on their website, webpage, account, page, platform or application. The regulation emphasizes that the proof of registration should always be easily accessible to customers. Failure to display the COR or eCOR will result in a penalty of P1,000 for each violation per business or store name.
The BIR's move to require mandatory registration of online businesses is part of a broader effort to bring the rapidly growing online economy under formal regulatory oversight. The government aims to level the playing field among online and traditional businesses, all of which must adhere to the same tax obligations. By requiring businesses to display their proof of registration, the BIR wants to foster greater trust among consumers in the online marketplace.
Are you engaged in business of any kind or form? By registering with the BIR and adhering to these new rules, you not only avoid penalties but also contribute to a more transparent and trustworthy business environment. In the realm of business regulations, compliance is the best defense against costly consequences.
Aileen P. Melchor, MBA, CTT, is the operations manager of Paguio, Dumayas & Associates, CPAs (PrimeGlobal Philippines), an institutional member of the Association of CPAs in Public Practice (ACPAPP). Her views do not reflect in any way the opinion of these institutions.