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Philippines: Taxing Philippine Offshore Gaming Operations 

by Segolene Leffy

Published: October, 2021

Submission: October, 2021


Republic Act (“RA”) No. 11590 amends the National Internal Revenue Code (“NIRC” or the “Tax Code”) to provide the taxing rules for offshore gaming operations.

Taxation of Offshore Gaming Licensees

Under RA No. 11590, offshore gaming licensees shall refer to the offshore gaming operator, whether organized abroad or in the Philippines duly licensed and authorized, through a gaming license, by the Philippine Amusement and Gaming Corporation (“PAGCOR”) or any special economic zone authority or tourism zone authority or freeport authority to conduct offshore gaming operations. An offshore gaming licensee shall be considered engaged in doing business in the Philippines. An offshore gaming licensee-gaming agent, on the other hand, refers to the representative in the Philippines of an offshore based operator who shall act as a resident agent for the offshore gaming licensee. The gaming agent shall not be involved with the business operations of the offshore gaming licensee and shall derive no income therefrom.

Offshore gaming licensees are subject to a gaming tax of five percent (5%) on the entire gross gaming revenue or receipts or the agreed predetermined minimum monthly revenue or receipts from gaming, whichever is higher, in lieu of all other direct and indirect internal revenue taxes and local taxes. Gross gaming revenue or receipts shall mean gross wagers less payouts.

As for the non-gaming revenues, Philippine-based offshore gaming licensees shall be subject to an income tax equivalent to twenty-five (25%) of the taxable income derived during each taxable year from all sources within and without the Philippines. On the other hand, non-gaming revenues of foreign-based offshore gaming licensees shall be subject to an income tax equivalent to twenty-five (25%) of the taxable income derived during each taxable year.

Sales to and services rendered to offshore gaming licensees subject to gaming tax shall be subject to the zero percent (0%) value-added tax.

Taxation of Alien Individuals Employed by an Offshore Gaming Licensee and Service Providers

Alien individuals, regardless of residency, who are employed and assigned in the Philippines, regardless of the term and class of working or employment permit or visa, by an offshore gaming licensee or its service provider shall pay a final withholding tax (“FWT”) of twenty-five percent (25%) on their gross income. The minimum FWT due for any taxable month from the said persons shall not be lower than twelve thousand five hundred pesos (PHP 12,500).

All foreign employees of offshore gaming licensees and their service providers, regardless of the nature of employment, shall have a tax identification number (“TIN”). The offshore gaming licensees and the service providers that employ or engage a foreign national without the TIN shall be liable for a fine of twenty thousand pesos (PHP 20,000) for every foreign national, and in proper instances, revocation of their primary and other government licenses and/or temporary ban in employing or engaging foreign nationals for their operations.

Disposition of Revenues from Gaming Tax on Offshore Gaming Licensees

Sixty percent (60%) of the total revenue collected from the gaming tax shall be allocated and used exclusively in the following manner:

Allocated for/to Percentage Allocation
Universal Health Care Act 60%
Health Facilities Enhancement Program 20%
Sustainable Development Goals 20%


The information provided here is for information purposes only, and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.



Jude Ocampo
Partner, Ocampo & Suralvo Law Offices
[email protected]


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