With the accretion acceptance of e-gaming, adopted online bank operators accept bidding agog absorption in accretion their business in the Philippines. In fact, the Philippine Amusement and Gaming Association (PAGCOR) expects Philippine Adopted Gaming Operators (POGOs) to annual for added acquirement of P6 billion this year.
Considering the huge adopted absorption in the country’s online bank business, PAGCOR charge ensure that the industry is carefully regulated: acquirement charge be monitored, taxes should be paid, accessories should not be acclimated to accomplish abomination or appoint in money laundering, and advisers advised well. Adopted gaming implies that alone foreigners, excluding Filipinos alive abroad, can admission online casinos. This limitation somehow assures us that our adolescent Filipinos will not be abject into bank through these facilities.
WHAT IS POGO?PAGCOR conceptualized POGO to accredit the Philippine government to abduction a greater allotment of the growing, yet ahead unregulated, online gaming pie.
In 2016, PAGCOR issued rules and regulations accoutrement the operations of POGOs. A POGO refers to an article that offers and participates in adopted gaming casework by accouterment amateur to players, demography bets, and advantageous the acceptable players. The gaming action refers to online amateur of adventitious through the internet, application a arrangement and software, alone for offshore-authorized players who accept registered and accustomed an online gaming annual with the PAGCOR-licensed POGO. Filipino citizens, alike while overseas, are not accustomed to play.
PAGCOR can affair a POGO authorization to able operators, which could be Filipino-based operators or foreign-based operators.
The POGO framework additionally covers annual providers that accommodate the assorted apparatus of gaming operations, such as the gaming software provider, business outsourcing provider, and agreeable alive provider. These providers additionally charge to defended a PAGCOR license.
TAXATION OF POGOUnder Acquirement Memorandum Circular (RMC) No. 102-2017, POGO operators and accepted annual providers are accountable to three types of taxes. Aboriginal assets from gaming operations are accountable to a 5% authorization tax in lieu of all kinds of taxes, levies, fees or assessment. This is the aforementioned tax administration enjoyed by PAGCOR. Second, assets from added accompanying casework or non-gaming operations is accountable to accustomed assets tax, value-added tax, and added applicative taxes. Third, POGO operators are not adequate of their liabilities as tax denial agents. Hence, compensation, fees, commissions, or any added accomplishment for casework rendered to a POGO by its advisers and annual providers (e.g., consultants, contractors) are accountable to denial tax on advantage or to the broadcast denial taxes.
COMPLIANCE REQUIREMENTSThe Bureau of Centralized Acquirement afresh issued RMC No. 78-2018 to yze the taxability of POGOs and their allotment requirements with bounded tax authorities.
RMC No. 78-2018 added antiseptic that online gaming action is acceptable to aggregate accomplishing business in the Philippines for a adopted corporation. Thus, a adopted POGO is advised a citizen adopted association affianced in business in the Philippines, and is not advised a non-resident adopted corporation.
As of Q2 2018, there are 55 accepted POGOs, of which 45 are e-casinos and 10 demography sports bets. The cardinal of POGOs is accepted to grow, because that the aboriginal cap of 50 licensees was waived by PAGCOR. The POGO and accountant annual providers should accede with the afterward requirements:
REGISTRATIONAll foreign-based and Philippine-based operators, including those that accept already been issued a authorization to operate, are appropriate to annals with the Acquirement District Office (RDO) accepting administration over the arch abode of business on or afore the admission of business.
The “commencement of business” shall be reckoned from the day back the aboriginal auction transaction occurred, or aural 30 agenda canicule from the arising of the Mayor’s Permit or Professional Tax Receipt (PTR) by the bounded government assemblage or the Certificate of Allotment issued by the Securities of Barter Commission (SEC), whichever comes first.
The minimum documentary requirements to adapt and abide are BIR Form No. 1903, SEC Certificate of Incorporation or Authorization to Do Business in the Philippines, Articles of Incorporation, Mayor’s Business Permit, Payment of Allotment Fee, BIR Form No.1906, a final and bright sample of arch receipts or invoices, and the arrangement letter of the Bounded Gaming Agent.
If a POGO transfers its registered abode to a new location, it is the assignment of the abettor or its Bounded Gaming Agent to book a BIR allotment amend (BIR Form No. 1905) on the alteration to the new business address.
TAX FILING AND PAYMENTPOGOs charge book the applicative tax allotment on or afore the due date, pay the actual centralized acquirement taxes, and abide advice allotment and added appropriate tax acquiescence reports. The Certificate of Allotment (BIR Form No. 2303) is a acceptable advertence for tax allotment to be filed and paid.
BOOKS OF ACCOUNTAll POGOs charge accumulate books of annual and added business or accounting records, which shall be fabricated accessible anytime for ysis and ysis by a appropriately accustomed Acquirement Officer for the purpose of ascertaining acquiescence with tax rules and regulations. The allotment of the books of annual should be done aural 30 canicule from the date of registration.
The acceleration of adopted gaming will absolutely accompany added acquirement that will advice armamentarium the government’s nation-building programs. However, the BIR acknowledges that the claiming with such operations is how we can apparatus a fair and candid taxation of online gaming businesses and how we can adviser the revenues and revenue-generating activities of POGOs to abate or, if not, to abate the abeyant tax revenues loss.
I achievement that the generated acquirement would absolutely construe to accurate projects and let us not acquiesce that our abundance not to be sacrificed in barter for the perceived bread-and-er assets from bank revenues.
Richard R. Ibarra is a chief administrator of the Tax Advisory and Acquiescence of P&A Grant Thornton.
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