Taxes

This page applies to businesses operating in the Philippines.

In accordance with applicable BIR regulations (including Revenue Regulations No. 16-2023 and related issuances), withholding tax may be imposed on gross remittances made by platforms, marketplaces, and digital financial service providers to merchants and sellers.

These regulations require covered entities to apply withholding tax on qualified gross remittances once applicable thresholds and conditions are met.

How Does Withholding Tax Work?

Does PayMongo withhold tax? Yes, we are required to withhold a specific amount of tax from your payouts and remit it to the Bureau of Internal Revenue (BIR).

How is it calculated? Under BIR Revenue Regulation No. 16-2023, we must withhold 0.5% withholding tax on your gross remittance.

When does this apply? This deduction applies if your total gross sales exceed PHP 500,000 in a taxable year.

What you can do:

If you earn less than PHP 500,000: You can submit a Sworn Declaration to PayMongo. This declares your earnings are below the limit, exempting you from the withholding for that period.
If you are tax-exempt: Submit your valid tax exemption documents (such as your BIR Form 2303) to our Onboarding team at [email protected]
Get your Form 2307: If tax was deducted, you can download your Certificate of Creditable Tax Withheld (BIR Form 2307) from your dashboard at Settings > Taxes.

Important Note for Top Withholding Agents (TWA): If you are a top authorized withholding agent (TWA) of the BIR, we can refund back 2% of our VAT-exclusive service fees to you. In this scenario, you are the withholding agent. This requires you to provide us with BIR form 2307 evidencing the refunded withholding tax amount monthly.

Merchants who are tagged as authorized withholding agents on our system will receive the refund as part of their payout.

Reach out to [email protected] for further assistance.

Who is Exempted?

The following are generally not subject to withholding tax, subject to applicable rules and validation:

Foreign merchants
- Lending and financing services
- Traditional remittance providers
- Aggregator platforms acting purely as intermediaries
- Pass-through marketplaces with no control over settlement
- Government entities (excluding certain government-owned corporations)
- Charities, religious organizations, and other tax-exempt entities

I am a Non-Resident Digital Service Provider (Foreign Merchant)

If you operate outside the Philippines, Withholding Digital VAT (BIR RR No. 3-2025) shall apply.

Digital services consumed in the Philippines are subject to 12% VAT under BIR RR No. 3-2025. Depending on the transaction structure and the parties involved, VAT may be required to be remitted directly by the provider or withheld and remitted by a Philippine entity acting as withholding agent.

What happens next

If taxes were withheld: Download your BIR Form 2307 from the dashboard and provide it to your accountant. This allows you to claim tax credits when filing your income tax return.
If no taxes were withheld: You are responsible for declaring your full income and paying any necessary income taxes directly to the BIR.

Generating BIR 2307

You can generate and download this form directly from your dashboard. Please follow these steps:

Log in to your dashboard.
On the left sidebar, click on Settings.
Select the Taxes tab from the menu list. (You can also go directly to https://dashboard.paymongo.com/taxes).
Locate the section for BIR Form 2307.
Select the relevant date range or quarter you need.
Click the button to generate or download your form.

Once downloaded, save the file for your records. You should provide this document to your accountant or bookkeeper when preparing your quarterly or annual income tax filings to claim your tax credits.