Digitalization has transcended the boundaries of nations and has connected people now more than ever. In fact, the Organization for Economic Cooperation and Development (OECD) has recognized new business models that render traditional tax and regulatory principles and requirements unsuitable in certain instances. For example, Section 108 of the Tax Code, as amended, provides that a 12 percent VAT shall be imposed on gross receipts derived from the sale or exchange of services, including the use or lease of properties. “Sale or exchange of services” means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration. However, digital services such as those rendered online (i.e., those accessible remotely/virtually to Philippine consumers) are…
Source: philstar.com
