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The Bureau of Internal Revenue (BIR) recently issued Tax Circular 107-2021 on October 18, 2021 providing tax guidance on the imposition of taxes on Philippine Offshore Gaming Operations (Pogo) in accordance with the Law of the Republic (RA ) 11590 titled “A Law to Tax Offshore Gambling Operations in the Philippines.”

Offshore gaming license holder refers to an offshore gaming operator, whether organized overseas or in the Philippines, duly licensed and licensed, through a gaming license, by the Philippine Amusement and Gaming Corp. (Pagcor), any special economic zone authority, tourist area authority, or free port authority to conduct offshore gambling operations, including accepting bets from offshore clients, as provided in their respective charters.

Whereas a service provider is any legal person, duly created or organized inside or outside the Philippines, or a natural person, regardless of nationality or residence, who provides ancillary services to a holder offshore gaming license, or to any gaming licensee or operator licensed from other jurisdictions. These ancillary services may include customer and technical relations and support, information technology, gaming software, data delivery, payment solutions, and studio and live streaming services.

All offshore gaming licensees and service providers must submit to the BIR original copies of notarized employment contracts clearly indicating the annual salary and other benefits and rights of the foreigners concerned. In addition, all foreign employees of offshore gaming licensees and their service providers, regardless of the nature of the employment, must have a Tax Identification Number (TIN). Failure to procure this will result in a fine for each foreign national without this TIN and, where appropriate, revocation of their primary and other licenses obtained from government agencies and a ban on employing foreign nationals for their operations. .

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