The latest BIR circular where it wants to tax all digital content creators has generated a lot of talk, as the agency is looking for other sources of revenue. One of the things people might have overlooked in the BIR circular is that it will also cover foreigners who make “Philippines-based Content”.
“For resident aliens, any income derived from Philippine-based contents shall generally be taxable,” the circular said.
It is no secret that there are a number of foreign vloggers who do make money on YouTube by creating content that involves the Philippines. Among these prominent foreigners include Nas Daily and Doc Adam.
Because of that, the BIR wants to conduct a full-blown tax investigation against all social media influencers that make money through the internet–foreigners included.
For foreigners, BIR said in their circular that they need to show proof that their content is not made specifically in the Philippines for them to not be taxed by our local laws. To further clarify that, the BIR also provided details on tax deductions that can be made for income that is derived outside of the Philippines.
While the taxing of content creators may sound new in the Philippines, other countries like the US and Australia are already incorporating taxes on revenue made on platforms like YouTube. Google already has a number of support articles on managing taxes for creators residing inside and outside of the US, and Facebook is likewise applying VAT to all ad placements made within its platform.
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