Philippines to apply VAT on e-services from January 2021

29 May 2020

From 1 January 2021, the Philippines are proposing to introduce VAT on the supplies of electronic services by non-resident companies in the country.

Currently, foreign businesses providing digital services to consumers in the Philippines do not have to charge VAT on their sales. However, to remove the unfair advantage this gives to non-resident companies over resident providers, the Philippines government are proposing that VAT at 12% will be applied to these types of transactions.

This will be applied to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.