Tuesday, March 11, 2014

Online Freelancers To Pay Tax?

A friend forwarded me this article just last week:

With medical doctors crying foul this week over an “insulting” ad by the Bureau of Internal Revenue (BIR), a tax expert has advised online freelancers to know their tax obligations so they won’t get entangled with new government circulars governing e-commerce. 
Aside from physicians, the BIR has also launched an ad campaign against accountants, chefs, and online sellers who do not pay their tax obligations properly. 
Mon Abrea, a former revenue officer and tax examiner at the BIR, recently conducted a seminar for online freelancers on the new tax memorandums of the BIR on Internet-based businesses.  
US-based online freelance platform Elance sponsored the session dubbed, “Tax Academy Experience for Online Professionals” at the Asian Institute of Management in Makati City. The seminar was meant to guide online professionals on how to pay their taxes right and avoid any penalty.  
Abrea lectured on how freelancers can comply with the BIR’s Revenue Memorandum Circular (RMC) No. 55-2013 that provides the tax obligations of different parties engaged in online business transactions including services.  
He also shared to the attendees “The 31 Most Frequently Asked Tax Questions by Entrepreneurs,” which he wrote in his book on taxes titled “Ctrl+TAX+ Del” that was published in September 2013.  
Abrea is the founding president of the Center for Strategic Reforms of the Philippines (CSR Philippines), a non-profit organization that assists MSMEs or micro, small and medium enterprises.  
During the session, the most queried questions from the participants were: If they indeed need to pay taxes, how can they register as taxpayers? Also, is there a need for a new TIN or Taxpayer Identification Number?  
“It is everyone’s duty to pay taxes,” Abrea said. “As per Memorandum 55-2013 by the BIR, it reminds everyone who engages in online transaction, service, and sales needs to pay taxes.”  
He explained online professionals are no different from other workers in the eyes of the BIR. Thus, freelancers also need to secure barangay clearance and Mayor’s Permit, among others, and then have the business registered at the BIR. He stressed that only one TIN is allowed under the law.  
Among the online business transactions covered by the BIR’s RMC are the Business to Consumer (B2C), Consumer to Consumer (C2C), and Business to Business (B2B). B2C involves online stores selling goods and services to final consumers while B2B encompasses job recruitment, online advertising, credit, sales, market research, technical support, procurement and different types of training.  
Elance Philippines country manager Ronald Cirujano said his company plans to conduct similar events this year to educate more local online professionals.  
Cirujano said the Philippines is rated as the ninth biggest freelancer country in the world. Elance has 800,000 businesses and that three million freelancers use its website in more than 170 countries. 
Elance, together with global job marketplace company oDesk, recently announced a merger, creating an online freelancing behemoth.

The original article written by Tom Noda was first published last 6th of March, 2014 at Newsbytes.ph

Are you an oDesk freelancer? Would you be willing to pay your taxes should BIR require you to pay? I don't have any problem paying mine. If it's any help to the government, that's fine, but if it just ends up in the pockets of greedy politicians, I'll probably go ahead and pay but with my teeth all bared.

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