When the money crosses a border

Selling through Paddle, Lemon Squeezy or Gumroad

Your customer paid a platform. The platform paid you, minus its cut. Whose sale was it, and what do you report? This page is mostly about what nobody has answered.

What most sources get wrong

Commonly said: That a merchant-of-record payout is straightforwardly zero-rated export revenue, reportable at whatever hit your bank account.
What is actually the case: No BIR ruling, circular or regulation naming a merchant-of-record arrangement was found. The zero-rating conclusion is a plain reading of the general export-of-services rule applied by analogy, which is a reasonable thing to do and a different thing from a confirmed position. The reportable amount is genuinely unresolved, because the platform nets its fee before paying out and nothing found says whether your gross receipts are the customer's payment or your payout.; NIRC §108(B)(2) and §108(A); absence of any issuance on point

What a merchant of record changes

On a merchant-of-record arrangement, the platform is the seller to the end customer. It takes the payment, it handles the customer's own sales tax or VAT, and it appears on the customer's card statement. You are not selling to the customer. You are selling to the platform, which resells.

That is the whole reason founders use these platforms, and it is also why the Philippine tax question stops being obvious. Your counterparty is a foreign business, not the thousand individuals who bought the product.

What the general rule says

Services rendered to a person doing business outside the Philippines can be zero-rated for VAT.
The conditions are that the recipient is engaged in business conducted outside the Philippines, that payment is in acceptable foreign currency, and that it is inwardly remitted and accounted for under BSP rules.
NIRC §108(B)(2)
On a plain reading, a sale to a foreign merchant of record looks like an ordinary export-of-services sale.
The platform is a foreign business, and the payout usually arrives as a foreign-currency transfer through a bank. That is the logical extension of the general rule. It is not a confirmed BIR position, and this page does not present it as one.
NIRC §108(B)(2), applied by analogy
The invoice runs to the platform, not to the end customer.
The zero-rated export invoice goes to whoever is the actual service recipient under the contract. On a merchant-of-record deal that is the platform. This follows the general invoicing rule; no source addresses the merchant-of-record case by name.
General VAT invoicing rules, applied by analogy
RA 12023 does not reach this. It runs the other direction.
The 2024 digital-services VAT law imposes 12% VAT on nonresident providers selling into the Philippines. It is about money coming in, not about your outbound sale. The one connection: if the platform owes VAT on its own fees charged to Philippine users, that is the platform's liability and not yours.
RA 12023 and its implementing rules

Still unsettled

Nobody has answered these. Where the answer would change what you owe, that is a question for a professional or a formal BIR ruling request, not for a guide page.

Does the BIR treat a merchant-of-record sale the same as a direct export sale?

What is known: The general zero-rating rule in §108(B)(2) fits the facts on a plain reading, and the platform is unambiguously a foreign business.
Where it stops: Nothing confirms the Bureau applies it that way. This was searched for directly and repeatedly across primary and secondary sources; the absence is the finding, not a gap in the research. If your merchant-of-record revenue is material, this is a question for a formal ruling request or a professional, not for a guide page.

Do you report the customer's payment or your net payout?

What is known: §108(A) defines gross receipts as the total amount actually or constructively received for the services performed.
Where it stops: The platform nets its fee before paying you, so those two figures differ, and no source found resolves which one is your reportable gross receipts. This is unsettled for VAT and for income tax alike. Whichever you pick, keep the platform statements that show both numbers.

Is the inward-remittance requirement satisfied when an intermediary remits?

What is known: Zero-rating requires payment in acceptable foreign currency, inwardly remitted and accounted for under BSP rules.
Where it stops: Nothing found addresses whether it matters that the remitter is the platform rather than the end consumer. The money does arrive from abroad through a bank, which is the substance of the requirement, but no authority confirms the form is satisfied.

The forms this touches

Sources

Checked against BIR rules on Aug 6, 2026

Knowing the rule is half of it. Knowing what you owe under it, before the deadline, is the other half.

Work out what you file

Practical guidance, not legal or tax advice. Every claim above names what it rests on, and where a claim rests on secondary reporting rather than a primary text, it says so. Rules move; check the review date before relying on a figure.