List of internet gaming licensees and its addresses
The Philippines is a gaming hub in Southeast Asia, with a growing online gaming market and a thriving casino industry. PEZA does not have an authority to issue license to operate gambling casinos and online gambling in the country. The 5% franchise tax shall be payable directly to the BIR, specifically to the concerned Revenue District Office (RDO) where the Licensee is registered. This franchise tax is different and distinct from the license/regulatory fees paid by Licensees to PAGCOR. Income realized from related services/operations that are not duly registered with the concerned IPA shall be subject to regular CIT, VAT, and other applicable taxes under the Tax Code.
Additionally, ensure ongoing compliance with regulations and risk management practices to establish a successful and sustainable online gaming business in the Philippines. Taguig City – Philippine Economic Zone Authority (PEZA) Director General Charito “Ching” Plaza on Sunday emphasized that PEZA does not register online gambling as it is not part of the law governing the investment promotion agency’s (IPA) mandate. 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.
Aside from these, PAGCOR has also been tapped to provide funds for the implementation of vital laws such as the Comprehensive Dangerous Drugs Act of 2022 which is for the establishment, maintenance and operation of drug rehabilitation centers in the country, and the Sports Incentives and Benefits Act which provides monetary rewards to athletes who win in international sports competitions. Each structure has different legal and tax implications, so it is important to consult with a legal professional to determine the best option for your business. PAGCOR has released a revised regulation for POGOs known as the Internet Gaming Licensing Regulations, which have the aim of strengthening and maintaining the highest standards of integrity for POGOs.
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The online gaming industry is highly regulated, and it is crucial to ensure ongoing compliance with Philippine laws and regulations. The license to operate online gambling granted to qualified operators shall not be assigned, shared, leased, transferred, sold or encumbered to any other party. Any gambling operator desiring to operate outside the jurisdiction of the government authority whicch issued its existrng license shall apply for a separate license with the appropriate authority. PAGCOR’s Licensees’ income from the operation of casinos shall be exempt from regular CIT upon payment of the 5% franchise tax since the law is clear that said exemption inures and extends to their benefits. The 5% franchise tax shall be in lieu of other direct and indirect taxes like income tax and value-added tax (VAT). In short, PAGCOR is exempted from corporate income tax (CIT), VAT, and other direct or indirect taxes.
Constituted as a withholding agent, PAGCOR shall withhold the appropriate taxes on compensation given to its employees and on income payments to local and foreign suppliers. Moreover, PAGCOR must also collect a qualifying fee from players and remit the same in accordance with the existing laws and regulations. Not known to everyone, PAGCOR paid a staggering P5.2 billion worth of taxes to the Bureau of Internal Revenue (BIR). This amount represents the 5% franchise tax on PAGCOR and its Licensees/Proponents based on its annual audit report for the year 2020 posted on PAGCOR’s website. After its establishment, PAGCOR entered into a contract with Philippine Casino Operators Corporation (PCOC) for the operation of the floating casino in the Manila Bay in 1977.
This effectively excluded PAGCOR Licensees, resulting in their revenue from gaming operations being considered subject to VAT. This is contrary to a 2021 SC decision that affirmed that the tax exemption under Section 13(2)(b) of Presidential Decree No. 1869 (or the PAGCOR Charter) extends to both Contractees and Licensees of 20 deposit casino PAGCOR. Following the hierarchy of laws, the 2022 RMC should have followed the 2021 SC decision. Currently, there are two main types of offshore gaming licensees in the Philippines. Foreign-based POGO Licensees must have an appointed Local Agent which has to be PAGCOR-accredited.
LEGAL
With a booming gaming market and a supportive regulatory environment, the Philippines has become an attractive destination for investors and entrepreneurs looking to start an online gaming business. “While PEZA is the highest contributor to export income to the country through its economic zones program and its export enterprises engaged in IT/BPO services as the biggest job provider; however, the agency does not include the registration of online gambling as it is not among those export-services provided in the PEZA law,” said Plaza. With a growing gaming market, a young and tech-savvy population, and a supportive regulatory environment, the country offers a favorable climate for online gaming businesses.
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. 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.
- “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.
- 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.
- Following the hierarchy of laws, the 2022 RMC should have followed the 2021 SC decision.
However, POGOs have again recently been attracting controversy for illegal activities conducted within their premises. Residents near POGO establishments have also expressed alarm about the establishments serving as breeding grounds for crime and human rights violations. Immigration violations are also a concern with foreign nationals employed by POGOs apparently illegally entering and residing in the Philippines. Add to these the potential national security concerns, many are now calling for a total ban of POGOs.
Funding.�The amounts necessary to carry out the provisions of this Order shall be taken from available appropriations in the CY 2017 General Appropriations Act of the concerned agencies , subject to applicable budgetary rules and regulations. Thereafter, appropriations for the implementation of this Order shall be incorporated in the regular budget of the concerned agencies. These incomes are subject to regular CIT, VAT, and other applicable taxes under the Tax Code. On the other hand, income from “other related operations/services” shall be subject to CIT, VAT, and other applicable taxes under the Tax Code.