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PHILIPPINES ASCENSION TO E-COMMERCE: An Overview of the Bureau of Internal Revenue’s RMC No. 60-2020

The Philippines’ steadfast growth in online technology from analog to digital transactions has significantly contributed to the opening of online businesses through social media and other relevant online platforms. This became the silver lining of the challenges brought by the COVID-19 pandemic.

Social media and other online platforms made it easier for different online businesses to establish their brand and online identity to customers/buyers nationwide. Through the said means and platforms, online businesses are able to derive income from online transactions. However, the convenience of conducting transactions and deriving income online has legal implications.


On 10 June 2020, the Bureau of Internal Revenue (“BIR”), issued Revenue Memorandum Circular (“RMC”) No. 60-2020, [1] known as “Obligations of Persons Conducting Business Transactions Through Any Forms of Electronic Media, and Notice to Unregistered Businesses”.

It gave due notice to all persons doing business and generating income in any manner or form, specifically those who are into digital transactions through the use of any electronic platforms and media, and other digital means to ensure that their businesses are tax compliant and are registered pursuant to Section 326 of the National Internal Revenue Code, as amended (“Tax Code”).

This not only required non-registered businesses but also existing registrants to comply with the provision of the Tax Code, which are[2]:

“1.  Issuance of registered Sales Invoice or Official Receipt for every  

       sale of goods or services to clients/customers/buyers;

  2.  Keeping registered Books of Accounts and other accounting

        records of business transactions;

  3.  Withholding of taxes, as applicable;

  4.  Filing of required tax returns; and

  5.  Payment of correct taxes due on time.”


Establishing a business is not an easy feat, it requires numerous paperwork, auditing, and prudence from business owners to comply with existing laws, rules, and revenue regulations of the BIR.

Tax laws apply to every person or entity in the Philippines, regardless of how the transaction was conducted or generated income. Hence, online transactions and revenue generated through digital means are not excused from taxation. Failure to comply with the registration and compliance requirements imposed by the BIR makes a business liable for penalties. In fact, RMC No. 60-2020 provides that all those who will be later found doing business without complying with the registration/update requirements, and those who failed to declare past due taxes/unpaid taxes shall be imposed with the applicable penalties under the law, and existing revenue rules and regulations.

Written by: John Lester M. Tan

[1] RMC No. 60-2020

[2] RMC No. 60-2020


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