What does it take to sell on TikTok Shop and Shopee in the Philippines?
Selling on TikTok Shop, Shopee, or Lazada in the Philippines means two things must happen: you open a verified seller account on the platform, and you register your business with the Bureau of Internal Revenue (BIR). Since Revenue Regulations No. 16-2023 took effect, BIR registration is no longer optional for online merchants. Marketplaces are now required to withhold tax from sellers, verify registration details, and report your sales to the BIR. So the marketplace setup and the tax setup are really one project, not two.
This guide walks Filipino online sellers through both halves: getting your store live, and staying compliant on the 1% marketplace withholding, percentage tax, and income tax. It is written for solo sellers and small businesses. If you sell mainly as an influencer through affiliate links or live commissions, read our dedicated guide for content creators instead; for the broader picture, see online sellers.
How do I set up a seller account on TikTok Shop, Shopee, or Lazada?
The platform onboarding is similar across all three. You will need to be at least 18 years old, a valid email or phone number not already linked to another shop, a government ID, and a Philippine bank account for payouts.
- TikTok Shop: Register at the Seller Center, choose Individual or Corporate seller, and upload the front and back of your passport, national ID, or driver's license. Verification typically takes 3 to 5 business days. As of March 2026, sellers in regulated categories such as cosmetics, food, and supplements must upload a valid FDA certificate in the Seller Qualification Center.
- Shopee: Sign up through Shopee Seller Centre, verify your phone and email, add your bank account, and upload your IDs. Shopee also asks you to upload your BIR Certificate of Registration and submit a sworn declaration each year.
- Lazada: Lazada accepts both Individual Sellers and Registered Businesses. A registered business (DTI or SEC plus BIR) unlocks higher trust ratings and premium seller tools.
For all three, a registered business with a Mayor's Permit and BIR Certificate of Registration is the most stable footing, because the platform can verify your tax status and you avoid the highest withholding treatment.
Do I really need to register with the BIR to sell online?
Yes. Under RR 16-2023, all online merchants must register with the BIR regardless of income level, platform, or size. Practically, the platforms now enforce this for you: Shopee and Lazada ask for your DTI or SEC documents and your BIR Certificate of Registration (Form 2303), and TikTok Shop requires Barangay Clearance, a Mayor's Permit, and Form 2303 for a fully operational Philippine store.
Here is the registration path for a typical solo seller operating as a sole proprietor:
- Get a TIN. If you do not have one yet, secure a Tax Identification Number first. See how to get a TIN.
- Register a business name with DTI. Sole proprietors register their trade name with the Department of Trade and Industry online.
- Secure Barangay Clearance and Mayor's Permit. These local permits are required by both the BIR and the marketplaces.
- Register with the BIR. File for your Certificate of Registration (Form 2303), register your books of accounts, and secure authority to issue invoices or receipts. Our BIR registration guide and the register as a freelancer with the BIR walkthrough cover the steps in plain English.
What is the 1% marketplace withholding tax under RR 16-2023?
RR 16-2023, effective January 11, 2024, requires e-marketplaces (Shopee, Lazada, TikTok Shop) and digital financial services providers to withhold a 1% creditable income tax on remittances to sellers. The clever part is the base: the 1% is computed on half (50%) of your gross remittances, not the full amount. So the effective rate on your gross is 0.5%.
This is a creditable withholding tax, not a final tax. The amount withheld is an advance against your annual income tax. Your platform issues a BIR Form 2307 (Certificate of Creditable Tax Withheld), and you deduct that total from the income tax you owe when you file. E-marketplaces began withholding on July 15, 2024; digital financial service providers followed on October 13, 2024.
| Quarterly gross remittance | Taxable base (50%) | 1% withholding | Effective rate on gross |
|---|---|---|---|
| P200,000 | P100,000 | P1,000 | 0.5% |
| P500,000 | P250,000 | P2,500 | 0.5% |
| P1,000,000 | P500,000 | P5,000 | 0.5% |
Who is exempt from the 1% withholding (the P500,000 threshold)?
The withholding does not apply if your annual cumulative gross remittances across all e-marketplaces and digital financial service providers combined do not exceed P500,000 in a taxable year. To claim this, you must submit a notarized sworn declaration of your expected annual gross to each platform (Shopee, Lazada, TikTok Shop) by January 20 of each year. Miss the deadline, and the platform will start withholding the 1% automatically once your sales build up.
A worked example: Maricel runs a small skincare shop on TikTok Shop and Shopee. She expects P420,000 in total sales for 2026, files her sworn declaration on each platform before January 20, and so no 1% is withheld. Her neighbor, Joel, sells phone accessories and expects P1.2 million, so he does not qualify for the exemption; his platforms withhold 1% of 50% of each payout, which he later credits against his income tax via his Form 2307 certificates.
Compliance bridge: percentage tax, the 8% option, and income tax
This is where most online sellers get confused, so here is the core of it. If your annual gross sales are P3 million or below and you are not VAT-registered, you generally choose one of two regimes when you register:
- Graduated income tax + 3% percentage tax. You pay graduated income tax (0% to 35%) on net income, plus 3% percentage tax on quarterly gross sales. Percentage tax is filed on BIR Form 2551Q. Estimate it with our percentage tax calculator and read the percentage tax overview.
- 8% flat income tax. You pay a single 8% rate on gross sales/receipts above the first P250,000, and this replaces both the graduated income tax and the 3% percentage tax. No separate percentage tax filing.
Worked example: Joel earns P1.2 million in gross sales in 2026 with low expenses. Under the 8% option, his income tax is 8% of (P1,200,000 minus P250,000) = 8% of P950,000 = P76,000 for the year, with no percentage tax. The 1% creditable tax his platforms withheld (roughly P6,000 on P1.2M of remittances) is subtracted from that P76,000 when he files. Whether 8% or graduated is cheaper depends on your margins; our guide on the 8% vs graduated income tax shows the break-even, and the income tax calculator lets you compare.
If you cross P3 million in annual gross sales, you must register for VAT (12%) and the 8% option is no longer available. Track this threshold closely as your shop scales.
Information gain: a practical 2026 compliance calendar for online sellers
Beyond setup, the real work is recurring filing. Here is the rhythm a registered non-VAT online seller follows in 2026:
- By January 20: File your notarized sworn declaration on each platform if you expect under P500,000, to avoid the 1% withholding.
- Quarterly percentage tax (Form 2551Q): Due within 25 days after each quarter ends, if you chose the percentage tax route. Skip this if you elected 8%.
- Quarterly income tax (Form 1701Q): Due May 15, August 15, and November 15.
- Annual income tax return (Form 1701 or 1701A): Due April 15 of the following year. This is where you credit all your Form 2307 certificates from the platforms. See how to file your ITR.
- Mandatory contributions: As a self-employed seller, you also pay SSS, PhilHealth, and Pag-IBIG. See mandatory government contributions and the 2026 SSS contribution table.
Two practical tips. First, keep your platform payout reports, because your 1% withholding and your gross sales reconcile against the platform's records that the BIR also receives. Second, if you accept payments through a GCash wallet for your business, register that wallet correctly; see our note on the GCash business account and the BIR. Sellers who also take payments from foreign buyers should review tax on foreign client payments and whether PayPal income is taxable.
Online selling is taxable from the first peso of profit, the same as any business. Registering early, choosing the right tax regime, and filing on schedule keeps your TikTok Shop, Shopee, and Lazada stores in good standing and your withheld 1% working as a credit instead of a loss. For tailored next steps, see our pages for self-employed taxpayers and small businesses.
Sources and References
The rates, thresholds, and rules on this page are drawn from official Philippine government issuances and reputable references. Tax and agency rules change; always confirm current figures with the relevant agency before acting.
- Withholding tax rules on digital commerce — Grant Thornton Philippines
- BIR extends the deadline for the imposition of withholding tax on payments made by digital financial service providers to online sellers — Grant Thornton Philippines
- When the BIR says 'mine' to online sellers — PwC Philippines
- Revenue Memorandum Circular No. 8-2024 (clarifying RR 16-2023) — G. Pagaspas Partners & Co. CPAs
- Philippines - Individual - Taxes on personal income — PwC Tax Summaries
- Effective July 1, 2023, the rate of percentage tax reverts to 3% — Bureau of Internal Revenue (official)