- A new law amends certain provisions of the Philippine Tax Code and imposes a 12% Value Added Tax (VAT) on digital services, including those provided by nonresident providers.
- Digital services cover anything supplied over the internet and are considered performed or rendered in the Philippines if consumed in the Philippines.
- Nonresident digital service providers must register if they meet the gross sales threshold; failure to register can lead to suspension of business operations in the Philippines.
- B2C and B2B transactions are covered; B2B transactions with nonresident digital service providers are expected to be covered by the reverse-charge mechanism.
Source EY
