Philippines implements VAT on e-services provided by non-resident suppliers

29 November 2024

In October 2024, President Ferdinand Marcos Jr. of the Philippines signed into law Senate No. 2528 , introducing VAT on digital services provided by foreign providers to local consumers.

While no specific implementation date has been announced, the earliest launch date for this new regime is confirmed as June 2025. The Philippines Bureau of Internal Revenue (BIR) also clarified that non-resident providers will not need to engage a local tax agent to register for VAT in the country.

Currently, foreign businesses providing digital services to Philippine consumers do not charge VAT on their sales. To address the competitive advantage this gives non-resident companies over local providers, the government plans to impose a 12% VAT on these transactions.

The VAT will apply to a range of electronic services, including:

• Online advertisement services.
• Streaming games, music, films and apps.
• E-books and e-journals.
• Internet services.