Special InTAX: December 2021 Issue 1 | Volume 2

 

Department of Finance

 

The Department of Finance (DOF) issued Revenue Regulations (RR) No. 20-2021, 26 November 2021, to implement Republic Act (R.A.) No. 11590, otherwise known as an “Act Taxing Philippine Offshore Gaming Operations”, amending for the purpose of sections 22, 25, 27, 28, 106, 108 as well as adding new sections 125-A and 288(G) of the NIRC of 1997, as amended, and for other purposes.

Salient points of RR No. 20-2021 are as follows:

• Taxation of POGO entities and their foreign employees as provided under Section 3 of the RR.

A. Offshore Gaming Licensees (OGLs)	Gaming Operations	5% of the Gross Gaming Revenue Receipts (GGR) or 5% of the agreed predetermined minimum monthly revenue from gaming operations, whichever is higher. It shall be directly remitted to the BIR not later than the 20th day following the end of the month.
	Non-Gaming Operations	Philippine-based OGLs - 25% income tax on the taxable income during each taxable year from local and global sources. Foreign-based OGLs - 25% income tax on the taxable income during each taxable year from sources within the Philippines. Non-gaming revenues of all OGLs shall be subject to VAT or Percentage tax, whichever is applicable.
B. Accredited Service Providers	Income Tax	Organized within the Philippines - 25% of the taxable income during each taxable year from local and global sources. Organized outside the Philippines - 25% of the taxable income during each taxable year from sources within the Philippines.
	VAT	Zero-percent (0%) VAT rate shall apply if OGLs pay 5% gaming tax 12% VAT rate shall apply where services provided and goods supplied are used in the non-gaming operations of the OGLs
	Withholding Tax on Purchases of Goods & Services	Applicable withholding taxes for their purchases of goods and services.
C. Alien Individuals Employed by POGO Entities	Final withholding tax of 25% on their gross income; Provided, however, that the minimum final withholding tax due for any taxable month from said persons shall not be lower than PHP12,500.

 

• Information required by the BIR under Section 4 of the RR.

A.  Newly established POGO entities shall submit the Summary List and Status Update on Foreign Nationals Employed Form (Annex A).

B.  All POGO entities shall regularly update the list of foreign employees in the Summary List and Status Update on Foreign Nationals Employed Form (Annex A).

C.  Status Report on OGLs Form (Annex B) and List of Foreign Nationals with Issued Gaming Employment License (GEL) Forms (Annex C & Annex C-1) for each POGO licensing authority not later than the 20th day after the close of each month.

D.  The BIR shall secure from the DOLE the list of foreign nationals employed by POGO entities who secured Alien Employment Permits (AEP).

E.  The BIR shall secure from the BI the list of foreign nationals employed by POGO entities who secured Provisional Working Permits (PWP) and/or 9(g) visas.

•  Penalties to be imposed by the BIR and the applicable fees thereof under Section 5 of the RR.
• Section 6 covers the disposition of revenues from gaming tax on OGLs.
• This RR shall take effect immediately.

(Note: The RR was published in Manila Times on 03 December 2021)

 

Attached are the full texts of the issuance.

Revenue Regulations No. 20-2021

Revenue Regulations No. 20-2021 Annex A

Revenue Regulations No. 20-2021 Annex B

Revenue Regulations No. 20-2021 Annex C

Revenue Regulations No. 20-2021 Annex C-1