Introduction of New Rules for E-Commerce in Philippines

On December 5, 2023, the President of the Philippines signed the Internet Transactions Act 2023(ITA) into law, introducing many novelties concerning electronic commerce operations covered by domestic tax regulations. 

Timeline 

The Law is effective from December 20, 2023, but its enforceability shall start within 18 months from publication.

The transitory period of 18 months is given to all economic operators in the scope to align their operations with the new requirements. 

Regulatory Changes 

The provisions of the Internet Transactions Act should cover e-commerce transactions within the scope of the B2B and B2C when (ⅰ) one of the parties is established in the Philippines or has a place of business there or  (ⅱ)   where the party has established significant presence within the country. 

The scope of the Law applies equally to the following types of taxpayers(natural or legal persons): 

• Digital Platforms;
• Electronic Marketplaces;
• Online Merchants;
• E-retailers.

The new responsibilities introduced by the regulation regarding the digital platforms and electronic marketplaces can be related to DAC 7 requirements that refer to the obligations of the platform to acquire pre-defined identifying information from reportable sellers operating on the platform. 

This information should be gathered by the responsible Platform or Marketplace, verified and validated, and, when necessary, shared with the supervising authorities. 

Additional responsibilities of the e-retailers and online merchants are based around the compliance of sharing truthful information about the supplier in question, respecting new terms and conditions for the e-commerce transactions, safeguarding data privacy, and enabling efficient and fair ordering and return procedures.