The Bureau of Internal Revenue (BIR) is turning its focus on the tax compliance of financial technology (fintech) companies as these continue to influence consumer preference amid the pandemic.
In a statement, the BIR said it is keeping an “eagle eye” to ensure that fintech companies in the country “are paying their fair share of taxes.”
Fintech firms cover operators, issuers and service providers of electronic payments, alternative credit scoring companies, online lending firms, digital banks, virtual asset service companies, play-to-earn platforms, crowdfunding platforms, big data companies, digital advisers, and insurance technology firms, among others.
“The BIR will continue to gather information and knowledge from the other regulatory agencies on identifying, addressing and closing the gaps resulting from the development and proliferation of fintech entities not clearly or explicitly covered by existing regulations," said BIR Deputy Commissioner (DCIR) Marissa Cabreros.
The taxman said it will create a team that will evaluate the tax obligations of fintech company activities based on categories identified by the Securities and Exchange Commission (SEC) and those regulated by the Bangko Sentral ng Pilipinas (BSP).
The BIR added it will also direct its Large Taxpayers Service (LTS) unit to check on existing large taxpayers engaging in activities that are variations of existing businesses and validate if correct taxes are being paid.
Moreover, the taxman said it is now validating the registration profile of existing fintech companies, based on the list provided by the SEC and the BSP, and will guide and encourage those not yet registered and compliant with their tax obligations.
The bureau will also continue to check fintech companies’ compliance with their tax obligations under the existing revenue issuances.
In August 2013, the BIR issued a Revenue Memorandum Circular No. 55-2013 on the obligation of taxpayers concerning online business transactions and had subsequently released several other issuances on the registration, filing of tax returns, and tax payments on these activities, the latest of which is RMC 97-2021.
According to Cabreros, the tax law, rules, and regulations governing regular domestic or foreign companies or a financial institution shall also apply to fintech companies.
Thus, she said these firms should also file and pay income tax; value-added tax (VAT), business tax or gross receipts tax, whichever is applicable; and the documentary stamp tax (DST) when applicable.
BIR Commissioner Caesar Dulay, for his part, urged noncompliant FinTech companies to visit their revenue offices.
“We will guide you in paying correct taxes. Tax evasion is a criminal offense, please do not wait for you to be caught to avoid facing criminal charges and substantial penalties,” Dulay said. — DVM, GMA News