After reading, Taxing Foreign Individuals Employed by an Offshore Gaming Licensee and Service Providers, read also What Is ‘Offshore Gaming Licensee’?
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An accredited service provider to an offshore gaming licensee is an entity organized within or outside the Philippines
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An accredited service provider provides ancillary services to an offshore gaming licensee
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Ancillary services may include customer and technical relations and support
Previously, we wrote about offshore gaming licensee which is being regulated through the enactment of Republic Act No. 11590 or An Act Taxing Philippine Offshore Gaming Operations.
When an offshore gaming licensee employs foreign individuals, are said foreign individuals subject to Philippine tax?
The law says:
Foreign individuals regardless of residency and who are employed and assigned in the Philippines, regardless of term and class of working or employment permit or visa, by an offshore gaming licensee or its service provider, shall pay a final withholding tax of twenty-five percent (25%) on their gross income. The minimum final withholding tax shall not be lower than twelve thousand five hundred pesos (Php12,500.00).
The gross income mentioned above shall include, whether in cash or in kind, basic salary or wages, annuities, compensation, remuneration and other emoluments, such as honoraria and allowances, received from such service provider or offshore gaming licensee. All offshore gaming licensees and service providers shall submit to the Bureau of Internal Revenue the original copy of notarized contract of employment clearly stating the annual salary and other benefits and entitlements of the concerned foreigner.
Also, all foreign employees of offshore gaming licensees and their service providers, regardless of nature of employment, shall have a tax identification number. All offshore gaming licensees and service providers that employ or engage a foreign national without the tax identification number shall be liable for a fine of Twenty thousand pesos (P20,000.00) for every foreign national without such tax identification number and, in proper instances, revocation of their primary and other licenses obtained from government agencies and/or perpetual or temporary ban in employing or engaging foreign nationals for their operations. The foreign national concerned shall still pay, and the employer shall remit, any corresponding taxes, penalties, interests, and surcharges due.
What may happen if the above-mentioned tax is not remitted?
The law says:
In addition to those provided for under the National Internal Revenue Code, as amended, the concerned foreigner may be subject to deportation and may be barred from reentering the Philippines, or blacklisted as a foreign employee by the Department of Labor and Employment, Bureau of Immigration, and other relevant agencies.
What is a service provider?
The law says:
An accredited service provider to an offshore gaming licensee is an entity that is duly created or organized within or outside the Philippines or a natural person, regardless of citizenship or residence, which provides ancillary services to an offshore gaming licensee as defined under Republic Act No. 11590 or to any gaming licensee or operator with licenses from other jurisdictions. Such ancillary services may include, but shall not be limited to, customer and technical relations and support, information technology, gaming software, data provision, payment solutions, and live studio streaming services.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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