RMO No. 29-2021 — Directs BIR offices to monitor and verify the tax compliance of online merchants, social media influencers and other businesses operating in digital platforms Digest | Full Text | Annexes

THAL ENUE REPUBLIC OF THE PHILIPPINES DEPARIMENT OF FINANCE 'oituriitfi BUREAU OF INTERNAL REVENUE .u_\4 \\y' L'41: Y iecoeils LtGT. Dl ! OcT 2 2!21 !q- LoLt REVENI.}E MEMORANDUM ORDER NO. sUBJECT: Monitoring and veriflcation of the Tax Compliance of online Merchants / social Media Influencers / other Businesses operating in Digital Platforms All Revenue Offrcers and Others Concerned I. Background tmtshhuaerconihrunBgteaauhrssxoianFrfeeaddtsciuogsemiinbttasgroa,lonbpaksunl,aasdtictnnftopesiorastmansygsowrdanrhomooaew,stieaeYnvdaeooarrtunyeTtisnaxugieaebmrisene,pcaetoArxmeaienredcby,uuontetnabeexdt,hpfLeaaraoyngezmdoarsdvfhaaehisc,ra/nivShlimeteharoett/hiepntesedt'eotTr,a.!lh]xesiegitnocagcb' tolRiiignnoeadtlegtuitraoocnrntderseollegfpsuissblnatudetosferoif'nrrmefttihhslseees law. MonelimnAeorsbaunesdainuremlyssCatsriracn2us0laa1cr3ti,EotnMhse,CinB)cuNlureoda.inu5g5o-o2fn0lIi1nn3etermreeiattaelirlaRinteignvgiehntraouxuepga(hByvelRirrst)u' aoublltlsi:ghuaodpti{opininssgsuimneadrlelsRla,etovioennnlinuteeo Rme*eaccrhkeaennttpigylea, cwfeosirt,hswethervebiscpteoosrpepusei,arafrointiymdoesfdimsaoilscairba-llwomgegbeesdriitsae,sivni(idlcueoeolntecbceltorisvgeg(leSyrMsr.eaIsfne)droreor dtthhetoorseaacsetif"vnoitinineligsnepinescrtfooomrremese"i)dn' I i I oTwh,ilrl5ounogorihtilhtmihneedsdeeirai,istssthueeannBfcoeIrRsc,eimtshseeuneBtdIoRRf MteamxCplaNhwaoss.izageg7sa-2itnh0sa2ttIpttehoresroeanmdsvianendacretnhsinegmintirnoocfdotumhceeeidrutsbai1xngothbaelnigyianottieofrnnthsee't I I I I I digital and social media platforms. I I This order is, therefore, issued to direct all Revenue District offices (RDO9 under all I (LTDs)/LT Audit Divisions (LTADs, Regular Revenue Regions (Rnrl *a'tr'e LT Divisions (LTS) to monitor and veriff the tax compliance A or Excise) under trr" I-u.g" Taxpayers service operating through digital or-online.platforms II who are registered or residing within their of online merchants, SIlfrs and^other businesses I "subject taxpayers"; I ifr"i.inun , refened to as I 5 $ {: ,y jurisdictions. g H T II. Creation of SPecial Task Force itl offices of the BIR monitor and verifr the tax-compliance of E Task Force (STF) in every revenue regional office and in the g To help the concerned H taxpayers, a Special subject mg !{ LTS shall be created to perform the following tasks: fl Pfr E H Page l of4 ffi ffi H F{ fl ,id it ts +lLFtdittl i3 itid

1. gather and collate all relevant information pertaining to, and create a database of: a) all online sellers of goods andlor services (e.g., financial technology (fintech) companies,t online liasing services or renting out of property via Airbnb, Agoia.com, Booking.com and other online leasing platforrns) and SMIs registered or residing within their j urisdictions b) properties being leased out by online lessors within their respective jurisdictions 2. Determine which among the subject taxpayers are or are not registered with the BIR. 2.1 For registered taxpayers, evaluate their tax compliance, to wit:: a. Payment of annual registration fee (ARF); b. Issuance of Sales Invoices (Sls)/Official Receipts (ORs); c. Keeping of Books of Accounts;2 d. Timely filing of requisite tax returns and the payment of taxes due thereon; e. Withholding of tax on income payments subject to withholding and the timely remittance of tax withheld; f. Filing of required information returns, such as the Summary List of SaleJ/Purchases (SLSP), Annual Alpha List of Payees, etc. on or before the due dates prescribed by law or existing revenue issuances, whenever applicable. In evaluating their tax compliance, the STF may conduct Tax Compliance Verification Drive (TCVD). However, prior to the conduct of TCVD, the STF shall veriff from the BIR's database the taxpayer's registration information including: i) the rlgistered SIs/ORs or those allowed to be printed and used pirrsuant to a duly Cash Register/Point of Sale Machines issued Authority to Print or Permit to Use registered Computerized Accounting System, if any; iii) and (CRM/POS); ii) iegistered books of accounts. After the evaluation, STF shall prepare a list of taxpayers who shall be recommended for the issuance of a Letter of Authority (LOA) by the RDO, the LTD/LTAD, the Regional Investigation Division (RID) or the National Investigation Division (NID), as the case may be, having jurisdiction over the taxpayer following the existing policies and procedures in the conduct of audit. 1 Financial Technology or Fintech refers to a software, a service, or a business that provides technologically advanced ways to make financial processes and transactions more efficient compared_to traditional methods, CLsuercenhddiatinsSgpcaocyroimnigepnaCt noCmieepnia,tenariesV,se,PiAagygmg-OreengatatGatoarC/tCeowommapypsaa,nriRiseoesnm, iItCntaosnmucperaTCnieeencst,herOsC,nolDinmiegpiatLanelineWdsi,anKlgleYCt CoCm/oSmpeapcnauienrisite,ysP, CeAeoltmretpmoaanPtieievsee,r Neoban-ks/Digitt ganks, Oilltat Asset Exchanges, Play-to-Earn Platformso E-Commerce Companies, Crowdfundin! Platforms, Other tnvestment Marketplace, RegTech Companies and SupTech Companies. 2 Revenue Memorandum Order (RMO) No. 2l-2000, as amended by RMO No. 29-2002. Page} of 4 1-:As P !1' ()cT 2e

2.2For unregistered taxpayers, the STF shall notiff them to register and pay voluntarily any unpaid taxes due on past transactions. If the notified taxpayers do not registir and pay their tax obligations within the time prescribed in the notice, the STF shall endorse the case to the concerned RID or NID for the conduct of preliminary investigation, which may walrant the issuanco of LOA for the filing of a Run After Tax Evaders (RATE) case and/or for other tax enforcement actions. 3. Submit a Monthly Accomplishment Report (MAR) with their respective Regional Directors (RDs) and the Aisistant Commissioner (ACIR)-LTS, on or before the 5th day of the following month, in accordance with the templates attached hereto as Annexes "A" and "B". III. Verification and Issuance of Letter of Authority (tOA) Voluntary declarations made by the subject taxpayers shall be verified through the exchange of lnformation @OI) mechanism under the valid and effective tax treaties, if applicable. In case discrepancies or inconsistencies are found, the STF shall recommend to the concerned RDO, the LTDiLTAD, the RID, or the NlD, as the case may be, the issuance of LOAs against the subject taxpayers. After obtaining a LOA, the STF shall initiate a request for information from a treaty partner through the EOI Unit of the International Tax Affairs Division (ITAD) to verifr the truthfulness of such information. Such request shall be in accordance with the format prescribed by Revenue Memorandum Order (RMO) No. 26-20203 and shall be addressed to th" Offi.. of the Commissioner, coursed through the Office of the Assistant Commissioner for Legal Service (ACIR-LS), and marked for the attention of the Chief of ITAD.a Concemed RDOs, LTD/LTAD, RID or NID, which shall investigate the taxpayers recommended by the STF can likewise request for information from ITAD, if necessary, following the same procedures prescribed under existing policy. IV. Reporting Requirement The ACIR-LTS and all the Regional Directors shall transmit the MAR submitted by the STF to the Office of the Commissioner, Attention: Deputy Commissioner for Operations, on or before the 10ft day of the following month, copy furnished the ACIRs for Assessment Service (AS) and Legal Service (LS). Soft copies thereof shall likewise be sent to their official email addresses for ease of reference and for consolidation. The ACIR-LS shall provide the ACIR-AS and ACIR-LTS a copy of any information obtained from a ffeaty partner for the proper monitoring of disposition and utility of information given to the RDOsILTDs/LTADs. The ACIR-AS and ACIR-LTS, on the other hand, shall provide the ACIR-LS information on all LOAs issued to the subject taxpayers for evaluation and determination whether additional information should be requested by the ITAD from a treaty partner. 3 Model Template 14. BTIREAIJ ,,)F INTEPXAT tg1,t: .lUt: 4 Chapter l(1.2), page 9. D 'ocluznigil' dJ',19 rr(i vtsr()N

The investigating office EDO/LTDILTADruDAIID or STF) shall also provide the EOI Unit of ITAD an update or feedback on the usefulness of the infonnation provided by the treaty partner by iccomplishing the "Feedback Form from RDO or Other Concerned Offiies;,s prescribed by RMO No. 26-2020. Such feedback shall be submitted within ten (10) days from the termination of the audit. V. Sanction for Non-Compliance Non-compliance with the directives contained herein shall subject the concemed revenue personnel to administrative sanctions pursuant to existing laws, rules, and revenue issuances. YI. Effectivity This Order shall take effect immediately. ;Ef+d\x!r, , CAESAR R DI.ILAY , r.AL REVE NUE Commissioner of Intemal Revenue 'ti b6 lo, 14' ' 046 7 5 6 ()cT 2e ?921 9ll vt uG T. sl0fr 5 Model Template No. 8.