- Republic Act No. 12023, signed by President Marcos Jr., imposes a 12% VAT on all digital services consumed in the Philippines, including those from foreign digital service providers, to ensure equitable tax treatment and boost national revenue.
- The law strengthens the Bureau of Internal Revenue’s authority to collect VAT from foreign DSPs, requiring them to register if their sales exceed PHP 3 million and designate a local representative. Educational services and digital subscriptions for recognized institutions are exempt.
- The Department of Finance anticipates PHP 7.25 billion in revenue by 2025, with an estimated PHP 102.12 billion over five years, funding public services and allocating 5% for local creative industries. A transition period allows for system implementation before full enforcement.
Source Orbitax
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