- Introduction of VAT on Digital Services: The Philippine Bureau of Internal Revenue (BIR) will implement a 12% VAT on all digital services consumed in the Philippines, effective February 1, 2025, for resident digital service providers (DSPs), and from June 1, 2025, for nonresident DSPs. This applies regardless of the DSP’s physical presence in the country.
- Registration and Compliance Requirements: Digital service providers with a turnover exceeding PHP 3 million must register with the BIR. Nonresident DSPs need to register by April 2, 2025, via the VAT on Digital Services (VDS) portal and comply with specific invoicing and reporting obligations based on their transactions.
- Penalties for Noncompliance: Failure to comply with the new VAT regulations may result in penalties, including potential suspension of business operations in the Philippines. Nonresident DSPs are required to issue detailed invoices for transactions and adhere to administrative requirements for VAT filing and payment.
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Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
