Lazada Tax Policies Explained: What Every Seller Needs to Know
Juliah 03 Feb 2025 05:16EN
Selling online can be exciting and profitable, but taxes can be confusing—especially if you’re selling on Lazada. Many sellers worry about how taxes affect their earnings and whether they need to register their business. This guide will help you understand Lazada’s tax policies so you can focus on growing your business without any surprises.
1. What Taxes Do Lazada Sellers Need to Pay?
If you’re selling on Lazada, you may need to pay several types of taxes, including:
Commission Fees (Includes VAT) – Lazada charges a commission fee on every sale, which varies between 3% to 7% depending on the product category. This fee already includes Value Added Tax (VAT).
Withholding Tax (0.5%) – The Bureau of Internal Revenue (BIR) requires Lazada to withhold 1% on 50% of your earnings, resulting in a 0.5% deduction from your total sales. This applies if your annual sales exceed PHP 500,000.
Income Tax – If you are a registered business, you will need to pay income tax based on your total earnings. The percentage depends on your tax classification.
VAT (if applicable) – If you earn more than PHP 3 million per year, you must register for VAT and pay 12% VAT on your sales.
Commission Fees (Includes VAT) – Lazada charges a commission fee on every sale, which varies between 3% to 7% depending on the product category. This fee already includes Value Added Tax (VAT).
Withholding Tax (0.5%) – The Bureau of Internal Revenue (BIR) requires Lazada to withhold 1% on 50% of your earnings, resulting in a 0.5% deduction from your total sales. This applies if your annual sales exceed PHP 500,000.
Income Tax – If you are a registered business, you will need to pay income tax based on your total earnings. The percentage depends on your tax classification.
VAT (if applicable) – If you earn more than PHP 3 million per year, you must register for VAT and pay 12% VAT on your sales.
2. What is Withholding Tax and How Does It Affect You?
Lazada’s new withholding tax system started on July 15, 2024.
Here’s how it works:
Lazada automatically deducts 0.5% of your earnings before paying you.
This is not an extra tax—it is an advance tax payment that will be credited to your tax account when you file your annual income tax.
Only sellers who earn more than PHP 500,000 per year will have this tax deducted.
Example:
If you sell PHP 100,000 worth of products in a month, Lazada will withhold PHP 500 (0.5%) before releasing your earnings.
Here’s how it works:
Lazada automatically deducts 0.5% of your earnings before paying you.
This is not an extra tax—it is an advance tax payment that will be credited to your tax account when you file your annual income tax.
Only sellers who earn more than PHP 500,000 per year will have this tax deducted.
Example:
If you sell PHP 100,000 worth of products in a month, Lazada will withhold PHP 500 (0.5%) before releasing your earnings.
3. Do You Need to Register Your Business with the BIR?
Yes! If you are selling online as a business, you are required to register with the BIR (Bureau of Internal Revenue).
Here’s why:
Here’s why:
- It ensures you pay the correct taxes and avoid penalties.
- You can get official receipts, which some customers (especially businesses) may require.
- You can claim deductions on business expenses (like shipping fees and advertising).
- You will be eligible for tax refunds if you overpay.
How to Register with the BIR:
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Go to the BIR office in your area.
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Submit required documents (DTI permit, Mayor’s Permit, and valid ID).
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Apply for a Taxpayer Identification Number (TIN) if you don’t have one.
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Pay the registration fee and get your Certificate of Registration (COR).
4. How BigSeller Can Help You Manage Taxes & Compliance
Handling taxes manually can be stressful, but BigSeller is an automation tool designed to help Lazada sellers manage orders, finances, and compliance efficiently.
How BigSeller Helps With Lazada Taxes
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Automated Tax Calculations – Helps track and calculate VAT, commission fees, and withholding taxes.
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Financial Reports & Analytics – Provides detailed reports on sales, expenses, and tax deductions.
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Invoice & Receipt Generation – Automatically generates tax-compliant invoices to meet BIR requirements.
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Multi-Platform Integration – Syncs with Shopee, TikTok Shop, and Lazada for centralized financial tracking.
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Easier BIR Compliance – Organizes sales data, making tax filing simpler and more accurate.
Why Use BigSeller for Tax Management?
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Saves Time – Reduces manual calculations and paperwork.
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Avoids Penalties – Ensures accurate tax records to prevent mistakes in BIR compliance.
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Optimizes Profits – Helps sellers track deductions and adjust pricing accordingly.
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If you’re struggling with tracking Lazada’s taxes, using BigSeller can make your life easier by automating tax-related processes.
5. Commission Fees and Hidden Costs on Lazada
Aside from taxes, Lazada charges commission fees and other costs that affect your earnings:
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Commission Fees (3%-7% per sale, depending on the product category).
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Shipping Fees (If you offer free shipping, the cost comes from your profit).
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Payment Processing Fees (Lazada may charge small transaction fees for payments).
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Seller Promotions (Discounts, vouchers, and free shipping offers reduce your final earnings).
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Tip: Price your products wisely to cover these costs while staying competitive.
6. Benefits of Paying Taxes as a Seller
Many sellers hesitate to register for taxes, but being a tax-compliant seller has many benefits:
Avoid Legal Issues – The BIR is now closely monitoring online sellers, and failing to register could lead to fines.
Build Customer Trust – Buyers feel more confident purchasing from legitimate, tax-registered sellers.
Expand Your Business – Large suppliers and corporate buyers often prefer working with registered businesses.
Eligible for Bank Loans – Having official tax records makes it easier to get business loans to grow your store.
Avoid Legal Issues – The BIR is now closely monitoring online sellers, and failing to register could lead to fines.
Build Customer Trust – Buyers feel more confident purchasing from legitimate, tax-registered sellers.
Expand Your Business – Large suppliers and corporate buyers often prefer working with registered businesses.
Eligible for Bank Loans – Having official tax records makes it easier to get business loans to grow your store.
7. How to Stay Compliant and Maximize Profits
✔ Keep Track of Your Sales and Deductions – Use an accounting app or spreadsheet to track your income and expenses.
✔ Set Aside Money for Taxes – Don’t wait until tax season—set aside a small percentage of your earnings regularly.
✔ Use BigSeller for Tax Management – Automate invoices, tax tracking, and financial reports.
✔ Consult a Tax Professional – If you’re unsure, seek help from a tax expert to avoid mistakes.
✔ Stay Updated on Tax Policies – Lazada’s policies and tax rules may change, so always check for updates.
Selling on Lazada can be a profitable business, but understanding and complying with tax policies is crucial for long-term success. While taxes may seem like an extra burden, they are actually a sign of a legitimate and growing business.
By staying compliant, you gain credibility, avoid legal troubles, and position yourself for future business growth. Instead of seeing taxes as a hassle, think of them as part of building a stronger, more profitable online store.
💡 Start today! Register your business, track your earnings, and use smart tools like BigSeller to manage your finances efficiently.
✔ Set Aside Money for Taxes – Don’t wait until tax season—set aside a small percentage of your earnings regularly.
✔ Use BigSeller for Tax Management – Automate invoices, tax tracking, and financial reports.
✔ Consult a Tax Professional – If you’re unsure, seek help from a tax expert to avoid mistakes.
✔ Stay Updated on Tax Policies – Lazada’s policies and tax rules may change, so always check for updates.
Selling on Lazada can be a profitable business, but understanding and complying with tax policies is crucial for long-term success. While taxes may seem like an extra burden, they are actually a sign of a legitimate and growing business.
By staying compliant, you gain credibility, avoid legal troubles, and position yourself for future business growth. Instead of seeing taxes as a hassle, think of them as part of building a stronger, more profitable online store.
💡 Start today! Register your business, track your earnings, and use smart tools like BigSeller to manage your finances efficiently.
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