The BIR said the registration of offshore gaming operators with the BIR shall be done with the agency’s regional district office having jurisdiction over the place where the head office and/or branch of the POGO hub is located. WHEREAS, RA No. 9728 created the Authonty of the Freeport Area of Bataan (AFAB) to manage and operate the Freeport Area of Bataan , and authorized it t o operate on its own , either directly or through a license to other tourism-related activities, including games, amusements, recreational and sports facilities, subject to the approval and supervision of the PAGCOR. For VAT purposes, however, the exemption extends only to those individuals or entities that have contracted with PAGCOR; hence, PAGCOR Contractees and not Licensees. As such, the Licensees’ revenues from gaming operations, involving sale of goods and/or services in the course of trade or business, are generally subject to VAT. But should the Licensees be contracted with PAGCOR in connection with the latter’s gaming operations, then the sale of goods and/or services performed with PAGCOR in relation to such gaming operations is subject to 0% VAT. By following the step-by-step guide provided in this article, you can navigate the process of starting an online gaming business in the Philippines and tap into the exciting potential of this market.
POGO sites in the Philippines must comply with PAGCOR regulations — for instance, they must not be in a residential area, and must have a maximum floor area of 25,000 square meters. Income realized by PAGCOR’s Licensees from other related services/operations shall be subject to regular CIT, VAT, and other applicable taxes under the Tax Code. Remember to conduct thorough market research, choose the right legal structure, obtain the necessary licenses, develop a compelling gaming platform, and market your business effectively. The exporters of commodities and services includes companies into manufacturing, processing, assembly, gcash casino refinery, tourism, medical tourism, agro-industrial which contribute the highest export income of 65% to the country. The IT/BPOs constitute the majority of employment generated by PEZA-registered industries at 52.77%. They allowed us to join the task force because we are asking data from Immigration and DOLE on the list of these foreign nationals,” BIR Deputy Commissioner Arnel Guballa said during a recent Department of Finance (DOF) Executive Committee (ExeCom) meeting.
However, she supports government efforts to raise income through Philippine Offshore Gaming Operators (POGOs). The Philippines presents a lucrative opportunity for entrepreneurs and investors looking to enter the online gaming industry. The Philippines offers a wealth of opportunities for those looking to start an online gaming business. Developing a comprehensive marketing strategy is crucial to attract players and build a strong brand presence in the competitive online gaming market.
Client Accounting Services
- This franchise tax is different and distinct from the license/regulatory fees paid by Licensees to PAGCOR.
- However, she supports government efforts to raise income through Philippine Offshore Gaming Operators (POGOs).
- Following the hierarchy of laws, the 2022 RMC should have followed the 2021 SC decision.
- The IT/BPOs constitute the majority of employment generated by PEZA-registered industries at 52.77%.
PAGCOR’s income from its operation and licensing of gambling casinos, gaming clubs and other similar recreation or amusement places, and gaming pools are subject to 5% franchise tax in lieu of all taxes. For VAT purposes, the sale of goods and/or services in the course of trade or business is generally subject to VAT. However, if the Licensees are also contracted with PAGCOR in connection with the latter’s gaming operations, then the sale of goods and/or services performed with PAGCOR in relation to such gaming operations is subject to 0% VAT. The Bureau of Internal Revenue (BIR) has asked the cooperation of the Philippine Amusement and Gaming Corp. (PAGCOR) on requiring foreign and Philippine-based offshore gaming operators (POGOs) to register with the tax agency before their licenses to operate can be renewed by the state-run firm.
Conversely, income from related operations/services or from non-gaming operations is subject to the regular corporate income tax, VAT and other applicable taxes. PAGCOR’s Contractees’ revenue derived from their contract with PAGCOR in connection with the latter’s gaming operations shall be exempt from regular CIT upon payment of the 5% franchise tax. However, for VAT purposes, the goods they provided to and/or services they performed for PAGCOR in relation to such gaming operations are subject to 0% VAT.
Step 6: Ensure Compliance and Risk Management
For a PAGCOR Licensee enjoying an ITH, such income is exempt from corporate income tax, but is subject to VAT. Finally, if a PAGCOR Licensee’s other related operations/services or non-gaming operations are not covered by its registered activity, such income is subject to regular corporate income tax, VAT, and other applicable taxes. PAGCOR’s income from its franchise/gaming operations is subject to 5% franchise tax, in lieu of all taxes, including value-added tax (VAT).
By 2028, PAGCOR will generate 12.5 BILLION U.S. DOLLARS from the gaming industry to become the leading authority in the ASEAN region and increase its role as a major partner in nation-building. The Corporation was created during the Martial Law years by virtue of a Presidential Decree (PD1067-A) issued by then President Ferdinand Marcos in response to calls for the Philippine Government to put a stop to the growing proliferation of illegal casino operations in various parts of the country then. On the other hand, income from other related operations/services or from non-gaming operations pertains to income from the operation of necessary and related services, shows and entertainment. Building a robust and secure online gaming platform is crucial for the success of your business. “PEZA has proven its contributions not only to export income and massive employment it created, but also to the social progress it contributes for the host local government units where ecozones and export companies are located,” she said. However, POGOs have again recently been attracting controversy for illegal activities conducted within their premises.
The country’s favorable regulatory environment and strong infrastructure have made it a preferred destination for foreign investors looking to establish online gaming operations in the region. The country’s gaming market is fueled by a strong demand for online casino games, sports betting, and esports, as well as a growing popularity of mobile gaming among Filipinos. The Philippines has become a major player in the global online gaming industry, with a market size that is expected to reach PHP 35.4 billion by 2025, according to Statista. The country’s love for games and its young, tech-savvy population have contributed to the rapid growth of the online gaming industry in the Philippines. The Philippines is a gaming hub in Southeast Asia, with a growing online gaming market and a thriving casino industry.
