BIR tracing Chinese nationals in online gaming operations

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Metro Manila (CNN Philippines, February 18) — The Bureau of Internal Revenue (BIR) has required foreign- and local-based offshore gaming operators (POGOs) to register with the tax agency in a bid to trace Chinese nationals working in online gaming businesses.

In a statement on Sunday, the agency said BIR registration is needed for the renewal of license to operate from the Philippine Amusement and Gaming Corporation (Pagcor).

The bureau said it is working with the Department of Labor and Employment (DOLE) and the Bureau of Immigration, through the Department of Finance, to monitor the number of Chinese nationals working in the online gaming industry.

"We want to trace these Chinese nationals employed by these gaming operators. 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 in the statement.

Guballa said BIR registration has been required under Revenue Memorandum Circular (RMC) 78-2018. The circular states that all foreign and Philippine-based gaming operators, including those with offshore licenses are now required to register with the tax agency before their PAGCOR licenses are renewed.

RMC 78-2018 gave the BIR more teeth over online gaming operations, effectively reinforcing RMC 102-2017.

"RMC-No 102-2017 reiterates the recognition that online activity is sufficient to constitute doing business in the Philippines, thus, a foreign corporation engaged in POGO is considered as Resident Foreign Corporation engaged in business in the Philippines and not a Nonresident Foreign Corporation," as stated in RMC 78-2018.

According to the BIR statement, the term "resident foreign corporation" as stated under RMC 102-2017 also covers POGOs based outside the Philippines.

The Labor Department in November 2018 said there were 115,652 foreign tourists — including 51,000 Chinese nationals — who ended up as workers in the country in 2015 to 2017. Aside from this, over 119,000 have been given special working permits, most of whom are working as POGOs, excluding illegal workers.

According to the Bureau of Immigration, 393 foreign nationals were arrested in 2018, including 304 Chinese nationals overstaying or working without permit.