Tax­ing for­eign cor­po­ra­tions en­gaged in POGO

Manila Times - - Business Times - JENNY SAY

O N-

2018 as a sup­ple­ment to ad­dress the regis­tra­tion re­quire­ments of a Philip­pine Off­shore Gam­ing Op­er­a­tions (POGO) li­censee that is a for­eign cor­po­ra­tion. busi­ness in the Philip­pines. This means that a for­eign cor­po­ra­tion with off­shore gam­ing op­er­a­tions in the Philip­pines is con­sid­ered a for­eign cor­po­ra­tion en­gaged in busi­ness in the Philip­pines.

Such be­ing the case, the for­eign cor­po­ra­tion en­gaged in POGO

res­i­dent for­eign cor­po­ra­tion per the Philip­pine Tax Code. But, is the BIR in a po­si­tion to

- cient to con­sti­tute do­ing busi­ness in the Philip­pines?

Be­fore we ad­dress this ques­tion, it is im­por­tant to look at the term “do­ing busi­ness”.

there is no criterion as to what con­sti­tutes do­ing busi­ness and that each case must be judged based on its cir­cum­stance. Do­ing busi­ness im­plies a con­ti­nu­ity of com­mer­cial ar­range­ments, and con­tem­plates the ex­er­cise of some of the func­tions nor­mally

pros­e­cu­tion of com­mer­cial gain or for the pur­pose of the busi­ness or­ga­ni­za­tion, which is con­sis­tent with the def­i­ni­tion of “do­ing busi­ness” of for­eign cor­po­ra­tions for­eign cor­po­ra­tion en­gaged in on­line gam­ing is con­sid­ered do­ing busi­ness in the Philip­pines.

From the fore­go­ing, we can­not es­tab­lish that a for­eign cor­po­ra­tion is do­ing busi­ness in the Philip­pines solely by en­gag­ing in

of off­shore gam­ing op­er­a­tor.

In the rules and reg­u­la­tions of POGO, a for­eign cor­po­ra­tion may be con­sid­ered an off­shore

- es of a PAGCOR-ac­cred­ited ser-

dif­fer­ently, a for­eign cor­po­ra­tion may out­source com­po­nents of

- -

It is fur­ther stated in the POGO rules and reg­u­la­tions that the on­line play­ers of the off­shore gam­ing op­er­a­tor are lim­ited to for­eign na­tion­als out­side the Philip­pines.

Be that as it may, a for­eign cor­po­ra­tion, whether or not en­gaged in trade or busi­ness, is tax­able only on in­come earned from sources within the Philip­pines. The tax si­tus fol­lows the “source”,

in­come. This raises the ques­tion:

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