BIR seeks registration of offshore gaming firms

Looks like the many Chinese - owned gambling companies will need to pay local taxes.

The Bureau of Internal Revenue (BIR) has asked the cooperation of the Philippine Amusement and Gaming Corp. (PAGCOR) to require foreign and Philippine-based offshore gaming operators (POGOs) to register with the tax agency before their licenses to operate can be renewed by the state-run gaming firm.

In a report to Finance Secretary Carlos Dominguez III, the BIR also said it wants to join the interagency task force led by the Department of Labor and Employment (DOLE) and the Bureau of Immigration (BI) that aims to check and monitor the number of Chinese nationals who are working in the on-line gaming industry.

“We want to trace these Chinese nationals employed by these gaming operators. They allowed us to join the task force because we are asking data from Immigration and DOLE on the list of these foreign nationals,” BIR Deputy Commissioner Arnel Guballa said during a recent Department of Finance (DOF) Executive Committee (ExeCom) meeting.

Guballa said that with the issuance by the BIR of Revenue Memorandum Circular (RMC) No. 78-2018, all foreign and Philippine-based gaming operators, including those with offshore licenses, are now required to register with the tax agency as a prerequisite in the renewal of their PAGCOR licenses.

Under the circular, the term “resident foreign corporation” as stated under RMC 102-2017 also covers POGOs based outside the Philippines.

“RMC-No 102-2017 reiterates the recognition that online activity is sufficient to constitute doing business in the Philippines, thus, a foreign corporation engaged in POGO is considered as Resident Foreign Corporation engaged in business in the Philippines and not a Nonresident Foreign Corporation,” as stated in RMC 78-2018.

The BIR said the registration of offshore gaming operators with the BIR shall be done with the agency’s regional district office having jurisdiction over the place where the head office and/or branch of the POGO hub is located.

“All Foreign-based and Philippine-based Operators, including those that have already been issued an Offshore Gaming License by PAGCOR are required to register with the Bureau of Internal Revenue on or before the commencement of business; or before payment of any tax due; or before or upon filing of any applicable tax return, statement or declaration,” RMC 78-2018 said.