With lower than a month to go earlier than the complete implementation of Republic Act 12023, or the Worth-Added Tax (VAT) on Digital Companies Legislation, international digital corporations will quickly be required to gather and remit value-added tax on providers supplied to Filipino shoppers—even with out a bodily presence within the nation.
On this article, BitPinas outlines which providers might be topic to tax, and which won’t below the brand new Digital Companies Legislation.
What are Digital Companies Underneath R.A. 12023?
Underneath the Philippines’ new guidelines, digital providers refers to any service delivered by way of the web or different digital networks utilizing data expertise, the place the method is basically automated and requires minimal human intervention.
Particularly, digital providers embody choices similar to on-line serps, on-line marketplaces or e-marketplaces, and cloud providers.
The definition additionally covers on-line media and promoting, on-line platforms, and the sale or provision of digital items.
R.A .12023: Worth-Added Tax on Digital Companies Legislation
On October 2, 2024, President Ferdinand Marcos Jr. signed the Worth-Added Tax on Digital Companies Legislation, permitting the federal government to gather VAT from international and native digital service suppliers (DSPs), similar to Netflix, Spotify, Amazon, and Lazada.
The legislation gave the Bureau of Inner Income (BIR) authority to gather VAT on digital items and providers, together with media, music, video-on-demand, and adverts. It additionally allowed the bureau to droop or block noncompliant platforms.
On January 16, 2025, the BIR launched Revenue Regulations No. 003-2025, outlining the implementation of a 12% VAT on international DSPs providing providers to shoppers and companies within the Philippines.
The registration portal for DSPs opened on February 1, 2025, with the deadline for registration set for April 2, 2025. Beginning June 1, 2025, VAT obligations will take impact, and all eligible nonresident DSPs should be VAT registered with the BIR’s portal.
Companies and Platforms Topic to Tax
The regulation applies to all people or entities, resident or nonresident, engaged within the sale, provide, or supply of digital providers consumed within the Philippines.
It covers each business-to-business and business-to-consumer transactions. Nevertheless, it excludes the sale of bodily items imported into the Philippines, as these are topic to customs duties and taxes below different legal guidelines.
Streaming Platforms
Web sites or apps that allow customers watch films or TV reveals or take heed to music with out downloading the content material.
Video Platforms
- Disney
- YouTube Premium
- Viu
- Amazon Prime
- HBO Max
- iQIYI
- CuriosityStream
- DAZN
- Crunchyroll
- MUBI
- Bein
Audio Platforms
- Spotify
- Apple Music
- YouTube Music
- Deezer
On-line Marketplaces
Digital platforms that join patrons and sellers, providing each digital and bodily merchandise.
- Lazada
- Shopee
- Amazon
- eBay
- Etsy
- Temu
Cloud Computing andStorage Companies
On-line providers that present computing energy, software program entry, or information storage over the web.
SaaS (Software program as a Service)
- Microsoft 365
- Adobe Artistic Cloud
- Canva Professional
- Zoom
- Notion
Infrastructure/Storage
- Google Cloud
- Amazon Net Companies (AWS)
- Dropbox
- iCloud
- Field
Digital Promoting Companies
On-line instruments or platforms utilized by companies to advertise services or products via adverts on web sites, apps, or serps.
- Fb
- TikTok
- X
- YouTube
On-line Gaming and In-App Purchases
Digital providers associated to gaming, together with digital currencies and belongings.
- Steam
- PlayStation Retailer
- Xbox Stay
- Garena
- Cellular Legends (In-App)
- Genshin Affect
- Roblox (Robux Purchases)
On-line Studying Platforms
Digital schooling providers with paid entry.
- Coursera
- Udemy
- Skillshare
- MasterClass
- Khan Academy (Paid Certifications)
- Edmodo
Software program and App Purchases
Shopping for or downloading packages and cell apps for gadgets like computer systems, telephones, or tablets.
- Microsoft Workplace
- Adobe Artistic Cloud
- Apple App Retailer
- Google Play Retailer
- Zoom
Digital Items and Downloadable Content material
Digital items, similar to e-books, artwork, and inventory information, which can be bought on-line via e-commerce websites, marketplaces, or digital platforms, usually by way of paid entry or downloads.
- Kindle Retailer
- Scribd
- Patreon
- Envato Market (Templates, Inventory Media)
- Adobe Inventory
- Gumroad
- ThemeForest
Subscription-Based mostly Content material Platforms
These platforms supply on-line providers the place customers pay a recurring month-to-month or annual price to entry a variety of digital content material, similar to information, instruments, or area of interest curiosity materials, on a subscription foundation.
- New York Occasions
- Bloomberg
- Substack (Paid Newsletters)
- Medium Membership
- The Economist
Digital Intermediaries (Fee-Based mostly Platforms)
Companies that join patrons and sellers, charging charges or commissions.
- Airbnb
- Seize (Reserving Interface)
- Uber Eats / Foodpanda (Platform Price)
- Fiverr / Upwork / Freelancer.com (Service Price)
Monetized Social Media and Influencer Companies
Platforms the place content material creators earn income are topic to VAT when relevant.
- TikTok (TikTok LIVE Presents)
- YouTube Associate Program
- Twitch Subscriptions
- OnlyFans
- Fb Stars
Journey-Hailing Apps
Purposes that facilitate transportation providers by way of digital platforms and generate revenue via commissions, platform charges, or service prices.
- Seize
- JoyRide
- Angkas
- inDrive
- Lalamove (If Providing Logistics by way of App)
Exemptions
In the meantime, additionally below BIR’s Income Rules No. 003-2025, sure digital providers and transactions are exempted from the 12% VAT even when they’re delivered digitally. These exemptions are primarily based on present VAT legal guidelines within the Philippines and are outlined below Part 109 of the Tax Code.
Academic Companies
On-line programs, seminars, and coaching periods provided by personal establishments accredited by the:
- Division of Schooling (DepEd)
- Fee on Increased Schooling (CHEd)
- Technical Schooling and Expertise Improvement Authority (TESDA).
These additionally embody providers supplied by authorities instructional establishments, together with on-line studying.
Sale of On-line Subscription-Based mostly Companies
Subscription providers for instructional platforms or content material supplied to DepEd, CHED, TESDA, and different acknowledged instructional establishments.
It contains entry to digital studying supplies, e-books, and academic platforms.
Financial institution and Nonbank Monetary Intermediaries
Companies from banks and nonbank monetary establishments performing quasi-banking features.
These are the providers which can be supplied via digital platforms, similar to cell banking apps and digital wallets.
Verify Out Earlier BitPinas Articles on Digital Companies Tax:
This text is printed on BitPinas: 12% VAT! Here’s the Full List of Digital Services Now Taxed in the PH
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