New BIR Rules on Tiangges/Bazaars or Privelege Stores

During Christmas season, most people are willing to shop or buy variety of goods, whether as gift or personal use. To meet the seasonal high demand on various goods, many aspiring or seasoned entrepreneurs organize and operate “Tiangge” or “Bazaar” (referred to as privilege stores).  The Tiangge or Bazaar event usually operates for a short period of time, offering vast choices of goods from a large number of tiangge or bazaar owners/sellers.

If you are one of those who operate or plans to join as seller on tiangge or bazaar events, or you want to organize it, this article will provide you important information on the new rules of the BIR regarding the taxation/registration requirements of tiangge/bazaar owners and organizers.

The Bureau of Internal Revenue (BIR) has issued last September 25, 2013 Revenue Regulation No. 16-2013 discussing the new rules on operators and owners of privilege stores or tiangges. This new rule revokes Revenue Regulation No 24-2003 and 16-2003.

Rules on Privilege Store or Tiangge/Bazaar Owners

“Tiangge” or “Bazaar” Store are stall or outlet which are not permanent in nature. You usually see them in shopping malls, villages, parks, etc.

To be classified as “tiangge” or privilege store, it should only operate for not more than 15 days.  Also, one (1) stall is considered equal to one (1) day. If it exceeds 15 days, it will be classified as “regular taxpayer”.

Privilege Store or Tiangge/Bazaar Owner is Required to

1. Withhold Tax (5%) on Rental Payments to the organizer or owner of the leased property.  The amount of tax withheld will be remitted and paid to the BIR on or before 10th of the following month.
2. File Annual Income Tax Return on or before April 15 of the year following the year the income was earned.
3. Submit information statement on its store activities on or before the first day of operation. The statement indicates Name of Organizer, Date of Operation, Name of Event, Address of the event, and TIN No.
4. Keep books of accounts and issue receipts/invoices provided by the organizer.
5. Submit List of Sales to the Organizer within five (5) days after start of operation.

Rules on Privilege Store or Tiangge/Bazaar Organizers

Privilege Store or Tiangge/Bazaar  Organizer  is an individual or entity who organizes and promotes “Tiangge” or “Bazaar” events. They are the primary lessee of the entire real estate property in which the tiangge or privilege store operates.

Privilege Store Tiangge/Bazaar Organizer is Required to

1. Register with the Bureau of Internal Revenue (BIR) at least 15 days before the start of the tiangge or bazaar event.
2. Display the BIR Certificate of Registration (COR) in a place where it can be easily seen.
3. Withhold Tax (5%) on Rental Payments to the owner of the leased property.  The amount of tax withheld will be remitted and paid to the BIR on or before 10th of the following month.
4. Provide the BIR, prior to the opening of the tiangge or bazaar event, a list of the participants which will include their names, residence address, stall no., location site of the tiangge or bazaar event, TIN of tiangge or bazaar owners, duration of operation and BIR Certificate of Registration, if applicable.
5. Keep books of accounts and issue registered receipts/invoices on rental income.
6. Provide receipts/invoices for use of tiangge or bazaar owners. The relationship will be of that of “consignor-consignee”.
7. Submit to the BIR, five (5) days after the operation of the tiangge or bazaar event,  a list of sales of the tiangge or bazaar owner.
8. Monitor and report to the BIR tiangge or bazaar owner who are not complying with the regulations.

If you are planning to operate a tiangge or bazaar store this coming Christmas season, we advise that you carefully consider and comply on these new requirements of the BIR to avoid paying penalties.