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By: Atty. Euney Marie Mata-Perez on June 18,2020

The community quarantines brought about by the coronavirus disease 2019 (Covid-19) pandemic pushed many to use electronic or online platforms, like Facebook, Viber and Instagram, to continue their businesses or start new ones.

However, there was some resistance when the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) 60-2020. This circular reminded all those doing business and earning income in any manner or form, specifically those making transactions through electronic platforms and other digital means, to secure tax identification numbers (TIN) and obtain or update their BIR certificates of registration (COR).

RMC 60-2020 also reminded taxpayers to comply with their other tax obligations, such as issuing receipts, keeping books of accounts and withholding taxes. In addition, RMC 60-2020 states that those who register on or before July 31, 2020, and those who voluntarily declare their past transactions to be subject to tax and pay the taxes on or before such date shall not be subject to any corresponding penalty.

It follows, then, that after July 31, the BIR will impose the usual penalties and interest for the late payment of taxes on those who would be found later to be doing business without complying with the registration requirements and those failing to declare past due taxes or unpaid taxes.

RMC 60-2020 has legal basis and did not impose new requirements. It was issued pursuant to Section 236 of the National Internal Revenue Code, or the “Tax Code,” which requires taxpayers subject to any internal revenue tax to register with the appropriate revenue district office (RDO) “on or before the commencement of business.”

RMC 60-2020 also just reiterated the basic registration requirements that apply to all taxpayers.

It is not the first time the BIR made an issuance to address digital or online transactions. In 2013, it issued RMC 55-2013, which reminded those engaged in online business transactions of their tax obligations. Aside from prescribing the issuance of electronic receipts to customers, RMC 55-2013 also set procedures on how taxes shall be withheld if payments are made through credit cards, among others.

In other words, those spurred to do business or who continue their businesses through digital means because of the pandemic cannot claim exemption or special treatment, especially if there is no law granting them such an exemption or privileges. Taxpayers can never claim that without a clear legal basis.

Also, Republic Act (RA) 11469, or the “Bayanihan to Heal as One Act,” did not grant a wholesale income tax exemption on micro businesses during the Covid-19 crisis. Sections 4(o) and (z) of the Bayanihan law merely provide for the liberalization of incentives for the manufacture of critically needed supplies or equipment, including exemption from import duties and taxes the importation thereof; and the moving of statutory deadlines and timelines for the filing and submission of any document, the payment of taxes, fees and other charges required by law, and the grant of any benefit. It did not grant any new tax exemption for online sellers.

There are, however, existing exemptions available to small businesses, as follows:

– The Tax Code, as amended by RA 10963, or the “Tax Reform for Acceleration and Inclusion Act” or Train, exempts from income tax individual taxpayers earning a taxable annual income not exceeding P250,000. Note that this is an annual income. No similar exemption is granted to corporate entities.

– Those with gross revenues not exceeding P3 million a year are exempt from VAT and, thus, need not register for VAT purposes.

– Under RA 9178, or the “Barangay Micro Business Enterprises (BMBEs) Act of 2002,” incentives, including income tax exemption, are available to BMBEs. A BMBE is any enterprise engaged in the production, processing or manufacturing of products, including agro-processing, as well as trading and services, with total assets of not more than P3 million. To enjoy the incentives, however, the enterprise must first obtain a Certificate of Authority from the Office of the Treasurer of the local government unit that has jurisdiction over its business, and then file the said certificate with the BIR RDO that has jurisdiction over its business.

There were other privileges made available by the BIR during this pandemic. The bureau extended statutory deadlines. More recently, it further extended the deadline for the availment of the tax amnesty on delinquencies from June 22 to Dec. 31, 2020 (RMC 61-2020).

We are facing challenging times. Our economy and businesses have taken a beating because of the community quarantines and their resulting business restrictions. We all hope that businesses would recover as the economy opens up.

Unfortunately, unless there is clear basis for exemptions or special tax privileges, all taxpayers would have to continue to comply with their tax obligations, even during this pandemic. Thus, it is important to be mindful of these obligations.


Contact Information

Our office address:

15/f Unit A. ACT Tower, H.V. Dela Costa St.
Salcedo Village, Makati City 1227 Philippines

Telefax: +632 831-1297

Telephone: +632 808-5375 • +632 815-0069



Euney Marie J. Mata-Perez

Mark Anthony P. Tamayo

Gerardo Maximo V. Francisco