Do You Pay Taxes For Online Earnings?
Submitted by admin on January 9, 2007 - 1:20pm.Ever wonder if you should be paying for your online earnings? Checkout PinoyMoneyTalk.com and visit their forum about the topic to read how those people earning online feels about paying taxes.
The following are some texts I found from the site that seem to explain the legalities better. Not being a lawyer, I can't say they're conclusive. I just see them as a guide.
A Filipino citizen is taxed based on his taxable income derived within and without the Philippines, which includes part-time works as an offshore, outsourced writer for a US-based website (see page 157 Annex A1 of Philippine Taxation Handbook: A Simplified Course September 2006 Edition).
A Filipino citizen whether working on full-time or part time is required to file an income tax return, regardless of the amount of gross income (see page 50 of the same book). If the Filipino citizen is a self-employed individual then certain deductions and personal exemptions are allowed (see pages 30 to 47 of the same book) and for which the normal tax rates (see page 157 of the same book) shall be applied to taxable income after such deductions and exemptions.
A Filipino citizen is taxable based on his income from whatever source (see page 24 of the same book) including the 50% interest income on the principal.
If the Filipino citizen has control in the conversion of the e-currency to cash, then such e-currency can already be treated as a form of a cash and other monetary asset. If he has no control in such conversion but such amount is due and demandable, then the e-currency shall be treated as a receivable item. In any case, it shall be treated as a taxable income in accordance with the method of accounting (example: cash basis or accrual basis) regularly employed in keeping the books of such taxpayer.
