RMC No. 57-2026 — Clarifies the inclusion of jackpot prizes from casino and other gambling activities within the statutory definition of "winnings" subject to final tax pursuant to Sections 24(B)(1), 25(A)(1) and 25(B) of the National Internal Revenue Code of 1997, as Amended.

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Bringing in Rovonues Fot Nation-Buikding BUREAU OF INTERNAL REVENUE National Office Building Quezon City MAY 2 6 2026 PILIPINAS BAGONG

REVENUE MEMORANDUM CIRCULAR NO.5 7 - 2026

SUBJECT Subject to Final Tax Pursuant to Sections 24(B)(1), 25(A)(1) and 25(B) Ciarification on the Inclusion of Jackpot Prizes from Casino and Other Gambling Activities Within the Statutory Definition of "Winnings of the National Intermal Revenue Code of 1997, as Amended

TO All Internal Revenue Officers, Employees and Others Concerned

Revenue Code of 1997, as amended (Tax Code), and its implementing regulations. gambling activities, when falling within the scope of existing tax laws, are considered winnings", and are therefore subject to final withholding tax, pursuant to the National Internal This Circular is issued to clarify that jackpot prizes derived from casino and other

I BACKGROUND

including fixed and progressive jackpots, fall within such definition and are consequentiy subject to the final withholding tax. scope of the term "winnings" under the Tax Code, particularly on whether jackpot prizes. The Bureau of Internal Revenue (BIR) has received numerous inquiries regarding the

Corporation (PAGCOR) and other authorized government instrumentalities, including Freeport Authority (APECO). This expansion has led to more high-value jackpot prizes for players. significant growth under the regulatory framework of the Philippine Amusement and Gaming Cagayan Economic Zone Authority (CEZA) and the Aurora Pacific Economic Zone and In recent years, the Philippines gaming and gambling industry has experienced

of jackpot prizes to ensure consistent application of existing laws, promote equity and the scope of the law. uniformity in taxation, and safeguard government revenue -- without expanding or modifying In view of these developments, there is a compelling need to clarify the tax treatment

H COVERAGE

whether citizens or aliens, from participation in casino gaming and other gambling activities. This Circular shall apply to jackpot prizes or similar winnings derived by individuals,

00000 3 2 C AE the principle that income from any source is taxable under existing laws, subject to enforceability and applicabie withholding requirements. operators and, where applicable, unlicensed or unauthorized gaming operators, consistent with BE MAY 2 6 2026 CF This includes jackpot prizes or winnings from activities conducted by licensed gaming . PBIUSSN Senator Miriam Defensor-Santiago Avenue, Difiman, Quezon City Trunkline: 8981-7000; 8959-7676 Website: www.bir.gov.ph Page 1 of 3

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U. DEFINITION OF TERMS.

For purposes of this Circular, the following terms are defined as foflows:

1. Jackpot Prize -- refers to the highest or top prize awarded in any game of chance,

including casino and other gambling activities, where paid in cash or in kind, typically resulting from a fixed prize pool, progressive accumulation, or winning game combination.

2. Electronic Gaming Machine (EGM) -- refers to any device, whether wholly or partly mechanicaliy or electronically operated, designed for playing a game of chance or a game of mixed chance and skill, where winnings may become payable as a result of placing a bet. 3. Casino -- refers to a physical or electronic gaming establishment, whether licensed.

regulated, or authorized by law or by PAGCOR, and by other duly authorized

based or sea-based, to offer games of chance, including slot machines, table games. EGMs, and similar gaming platforms. government agencies such as, but not limited to, CEZA and APECO, whether land-

4. Gaming Operators -- refer to any natural or juridical person, whether licensed

regulated, or authorized by law or by PAGCOR, and by other duly authorized government agencies, that conducts, manages, controls, or operates a casino.

5. Bingo --refers to a game of chance played with randomly drawn numbers which players match against numbers on cards with differently numbered square, with predetermined winning patterns.

6. Progressive Jackpot Prize -- refers to a type of jackpot prize that increases incrementally as more bets are placed, whether across linked tables, EGMs, or bingo games, until such prize is won.

v. TAX BASE AND TAX RATE

be the gross amount of the jackpot prize or winnings, without any deduction for service charges, administrative fees, commissions, or other similar charges. For purposes of this Circular, the tax base for computing the final withholding tax shali

24(B)(1) of the Tax Code, shall be subject to a final withholding tax of twenty percent (20%). Jackpot prizes or winnings derived by individuals that fall within the scope of Section

Philippines, jackpot prizes and winnings shall be subject to final withholding tax of twenty- five percent (25%), in accordance with Section 25(B) of the Tax Code. In the case of non-resident aliens not engaged in trade or business within the

scope, thresholds, or rates of taxabie prizes and winnings beyond those expressly provided under existing law. Nothing in this Circular shall be construed as amending, modifying, or expanding the ) BUREAU OF INTERNALREVENU 00000238 A GEMENT DIVISION

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N PENALTIES

amount of final tax on jackpot prizes or winnings shall render such party liable for the appropriate criminal actions, in accordance with Titie X of the Tax Code. corresponding surcharge, interest, and compromise penalties, without prejudice to the filing of Failure of the withholding agent or gaming operator to withhold and remit the correct

V. REPEALING CLAUSE

this Circular are hereby amended, modified or revoked accordingly. All revenue issuances, or portions thereof which are inconsistent with the provisions of

Circular as wide a publicity as possible. All internal revenue officers, employees, and others concerned are enjoined to give this

VI EFFECTIVITY

This Circular shall take effect immediately

CHARLITO-MARTIN R MENDGZA Commissioner of Internal Revenue

S BUREAU OF INTERNALREVENI RECORDS MANAGEMENT 00000238 S T DIVISIOR

MAY 2 6 2025

BY ASmIn UNT 2 TME. 3:42pm

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