RR 16-2023

Revenue Regulations (RR) No. 16-2023, issued December 21, 2023, further amends RR No. 2-98 (as amended by RR No. 11-2018) to require e-marketplace operators and digital financial services providers to withhold creditable withholding tax of one percent (1%) on one-half of the gross remittances they pay to online sellers/merchants for goods or services sold or paid through their platform or facility. The withholding does not apply if annual total gross remittances to a seller/merchant for the past taxable year, or cumulative gross remittances within a taxable year, have not exceeded ₱500,000, or if the seller/merchant is exempt from or subject to a lower income tax rate under existing law or treaty and submits proof of entitlement to the operator/provider. 'Gross remittance' excludes sales returns and discounts, separately billed delivery or shipping fees, value-added tax collected from the consumer and remitted to the seller, and charges for the use of the e-marketplace or digital financial services platform. Covered payment arrangements include the operator's e-wallet, a DFS provider's e-wallet used for the operator's account, and cash (e.g., cash-on-delivery) collected on the operator's behalf.