Philippines

By: Franchette M. Acosta, Senior Partner, Villaraza & AngangcoFranchette M. Acosta
E: fm.acosta@thefirmva.com l http://www.thefirmva.com

The Bureau of Internal Revenue (BIR) issued on December 27, 2017 Revenue Circular No. 102-2017 clarifying the tax imposed on entities engaged in Philippine offshore gaming operations. Philippine offshore gaming operators offer to offshore players online games of chance through the internet. Consistent with the regulation issued by the Philippine Amusement and Gaming Corporation (PAGCOR), the Circular classifies POGO Taxpayers as follows: first, the “Licensee”, and second, the “Other Entity”, which includes the POGO Gaming Agent, Service Provider and the Gaming Support Provider. There are different kinds of Service Providers: the Gaming Software/Platform Provider for gaming systems and games, sports book and pool betting; the Business Process Outsourcing Provider for call centers and IT-support services and Data/Content Streaming Provider, for real time streaming of casino games produced from a live dealer studio set-up.

The Circular clarifies that gross gaming receipts or the agreed or pre-determined minimum monthly revenues/income from gaming operations, whichever is higher, shall be subject to a franchise tax of 5%. This tax is in lieu of all kinds of taxes, levies, fees or assessments of any kind. Income from other related services shall be subject to normal income tax, value –added tax and other applicable taxes as deemed appropriate.

An “Other Entity” as defined above, or the POGO Gaming Agent, Service Provider and Gaming Support Provider, who is also a POGO Licensee shall be taxed 5% franchise tax on its gaming activities. However, it shall be subject to the normal tax rate and other appropriate taxes on its non-gaming operations. An Other Entity, who is not a POGO Licensee, deriving or earning only income from other related services or from non-gaming operations shall be subject to normal income tax, value-added tax and other applicable taxes on its entire revenues.

Income from gaming operations are those which are derived from operating of gambling casinos, gaming clubs and other similar recreation or amusement places and gaming pools. Income from other related services refer to income derived not from gaming operations but from other necessary and related services, shows and entertainment.

Income payments made by POGO Licenses or any other business entity licensed or authorized by PAGCOR for all their purchases of goods and services shall be subject to withholding taxes as may be appropriate. Compensation, fees, commissions or any other form of remuneration as a result of services rendered to POGO Licensees or any other business entity licensed by PAGCOR shall be subject to applicable withholding taxes under existing revenue laws and regulations.

This is article is prepared for information purposes only and should not be construed as legal advice.

E: fm.acosta@thefirmva.com
W: http://www.thefirmva.com

Tags: Offshore Gaming, Taxation, The Philippines
Related Articles by Firm
Law passed promoting ease of doing business in the Philippines
A law promoting the ease of doing business and efficient delivery of government services took effect this June 2018.
Non-bank credit card issuers subject to new Bangko Sentral Regulations
To ensure that credit card issuers have the capacity to deliver services efficiently and securely, management must implement appropriate risk management and control systems.
Joint Venture Guidelines of the Philippine Reclamation Authority
The Guidelines govern all JVAs formed for the development and disposition of PRA’s existing properties and projects.
The Philippine Anti-Money Laundering Commission extends compliance requirement
Jewellery dealers, dealers in precious metals and dealers in precious stones are now deemed covered persons.
Updates on Data Privacy Law Compliance in the Philippines
Phase II Registration with National Privacy Commission ...
Law Passed Strengthening Consumer Protection in the Philippines
On December 19, 2017, the Gift Check Act of 2017 (Republic Act No. 10962) was signed into law ...
Casino Covered by Philippine Anti-Money Laundering Laws
The Philippine government has expanded anti-money laundering laws to include casinos, including internet and ship-based casinos ...
Philippine rules on merger procedure
The Philippine Competition Commission issued the Rules on Merger Procedure which explain the timing for the filing of a notice for covered transactions, the procedure for notification, Phase 1 and Phase 2 review and other matters, including confidentiality claims ...
Philippines: Timing for Notification under the PCC Rules on Merger Procedure
The Philippine Competition Commission published its Rules on Merger Procedure ...
Joint Venture Agreements with Philippine Local Government Units as Public-Private Partnership Modality
The Duterte Administration is poised to fund its aggressive infrastructure program internally and through official development assistance ...
Update on Data Privacy Law Compliance in the Philippines
Automated Decision-Making Operations, Institutions Likely to Pose Threats to Data Subjects and Phase 1 and Phase 2 of Registration with the NPC ...
Philippine Competition Commission Merger Review Guidelines
On 23 March 2017 the The Philippine Competition Commission (PCC) released the Merger Review Guidelines ...
Related Articles
Covering Ears to Steal Bells: Ignoring insolvency at risk of liquidation
The closest Chinese equivalent to the English idiom of ‘sticking one’s head in the sand’ is ‘covering one’s ears to steal bells’ ...
JV Compliance Issues during the Transition Period under the new FIL
On 1 January 2020, the Foreign Investment Law of the People’s Republic of China came into force ...
Related Articles by Jurisdiction
Updates on Data Privacy Law Compliance in the Philippines
Phase II Registration with National Privacy Commission ...
Implementation of the data privacy act in Philippines now in full swing
Since 2012, the Philippines has had a comprehensive law governing personal data privacy. However, full implementation ...
Interplay of domestic law on compulsory licensing and international agreements on medicine prices
The price of pharmaceutical products in the Philippines appears to be on the high side compared to that in other Asian ...
Latest Articles
Watch again: “Is Covid-19 taking women lawyers’ careers back to the 1950s?”
A second chance to watch….. the opening Women In Law Dialogue Series Webinars: Asia and North America time-friendly (first aired ‘live’ in August 2020) ...
Covering Ears to Steal Bells: Ignoring insolvency at risk of liquidation
The closest Chinese equivalent to the English idiom of ‘sticking one’s head in the sand’ is ‘covering one’s ears to steal bells’ ...