Effective Date: July 1, 2025
Type: Legislation
Since July 1, 2025, the Philippines has required non-resident digital service providers to register for VAT and charge 12% on B2C digital services such as streaming, e-learning, and online platforms. B2B transactions are handled through the reverse charge mechanism. Non-resident providers must register with the Bureau of Internal Revenue (BIR), issue VAT-compliant invoices, and file regular VAT returns. Input VAT cannot be recovered, and compliance is mandatory regardless of whether the business has a physical presence in the country. Failure to meet these obligations may result in penalties or enforcement actions. Businesses serving Philippine customers should take steps to align with the new rules.
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