Bureau of Internal Revenue
The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 102-2017, 27 December 2017, to clarify the taxation of taxpayers engaged in Philippine Offshore Gaming Operations (POGO). POGO refers to the offering by a licensee of the Philippine Amusement and Gaming Corporation (PAGCOR) of online games of chance via the internet, using a network and software or program, exclusively to offshore authorized players, excluding Filipinos abroad, who have registered and established an online gaming account with the licensee.
PGO taxpayers are classified into a licensee or "Other Entity". A licensee is one duly licensed and authorized by PAGCOR to provide offshore gaming services. An "Other Entity" is a POGO licensee or any other business entity duly licensed and authorized by PAGCOR to provide a particular or specific component of the offshore gaming activities to the POGO.
A franchise tax of five percent (5%) in lieu of all other taxes, levies, fees or assessments of any kind, nature, or description shall be imposed on either the gross gaming receipts/earnings or the pre-determined minimum revenues/income from gaming operations, whichever is higher.
Income from other related services (income from non-faming operations) shall be subject to normal income tax, Value-Added Tax (VAT), and other applicable taxes, as may be deemed appropriate.
An "Other Entity", specifically including the Gaming Agent, Service Provider, and Gaming Support Provider, who is also a POGO Licensee shall be taxed in the same manner as a licensee. An "Other Entity" who is not a POGO Licensee and deriving or earning only income from other related services, shall be subject to normal income tax, VAT, and other applicable taxes on its entire revenues.
The RMC also discuss the withholding tax implications of income payments made by POGO taxpayers.
Attached is the copy of the RMC for your reference.
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