Philippines VAT Regime on Digital Services Remains Postponed

October 21, 2021

Even though The Philippines has approved the introduction of VAT on foreign digital services and goods that are sold B2C in the Philippines in June 2020, due to COVID-19, this new VAT regime hasn`t been implemented yet and won’t be in the nearest future.

As already announced, the Philippines will impose a 12% VAT on foreign digital services and goods. Non-resident sellers, sales of which will reach an annual VAT registration threshold of 3,000,000 PHP, will be obliged to register, collect and remit VAT from all their subsequent B2C sales in the Philippines.
Marketplaces operating in the Philippines and facilitating sales of digital goods and services by foreign sellers will be required to collect and remit VAT on behalf of such non-resident sellers.

The examples of Digital Services and Goods can be:
• Licensing of software
• Distance learning
• Streaming services
• Sale of mobile applications
• E-books, e-magazines and e-newspapers
• SaaS and other cloud-based products
• Hosting services
• Online advertising
• Online gaming
• etc.