BIR to implement POGO tax law

GROSS gaming revenues (GGR) of offshore gaming licensees (OGL) are now subject to a 5-percent tax following the Bureau of Internal Revenue’s (BIR) implementation of Republic Act 11590, which taxes Philippine Offshore Gaming Operators or POGOs. The new tax rules will take effect immediately, according to the BIR’s Revenue Regulation 20-2021, which was released on Friday and signed by Finance Secretary Carlos Dominguez 3rd on November 26 this year.

“In lieu of all other direct and indirect internal revenue taxes and local taxes, there shall be

levied, assessed and collected from OGLs (whether Philippinebased or foreign-based) a gaming tax equivalent to 5 percent of the GGR or 5 percent of the agreed predetermined minimum monthly revenue from gaming operations, whichever is higher,” it explained. OGL is defined by the BIR as an offshore gaming operator, whether based in the Philippines or elsewhere, that is lawfully licensed and authorized to conduct gaming activities, including the acceptance of bets from offshore customers, under a gaming license issued by a POGO licensing authority.

Meantime, it said GGR means gross wagers less payouts. Gross wagers refer to the total amount of money that offshore gaming customers wager while payouts refer to the total amount paid out to offshore gaming customers for winning.

The regulations said the gaming tax must be paid directly to the Immigration bureau by the 20th day following the end of each month.

Meanwhile, income from nongaming operations of Philippineand foreign-based OGLs will be subject to a tax equal to 25 percent of the taxable income derived from both domestic and international sources for each taxable year.

It was also said all OGLs’ nongaming revenues will be subject to value-added tax or a percentage tax, whichever is higher.

Accredited service providers formed within and outside the Philippines, on the other hand, will pay a 25-percent income tax rate on taxable income defined throughout each taxable year from both domestic and international sources.

The BIR defines accredited service providers as any natural person, regardless of citizenship or domicile, or legal entity, regardless of place of organization, who provides ancillary services to an OGL or any other offshore gaming operator having a license from another jurisdiction.

On the other hand, foreign nationals or non-Filipino citizens who are employed and assigned in the Philippines by an OGL or its accredited service provider, regardless of their residency, term and class of working or employment permit or visa, must have a Taxpayer Identification Number and pay a final withholding tax of 25 percent 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 P12,500,” the regulations stressed.

The BIR said the new tax regulations will take effect immediately.