Philippines Launches VAT Portal for Non-Resident Digital Service Providers to Enhance Compliance

• The Philippines launched a VAT on Digital Services portal for non-resident providers to register, file, and pay VAT
• Initial registration was via ORUS due to delays
• Republic Act No. 12023 covers digital services used in the country without local presence
• Providers must obtain a TIN, open a VDS account, and file quarterly returns
• BIR can audit using payment data with penalties including fines, domain blocking, and business suspension
• VAT registration deadline was 1 June 2025 via ORUS before the VDS portal opened
• First quarterly return via VDS portal is due 5 August 2025
• Quarterly VAT returns are due by the 25th day of the month following each quarter
• Legal basis includes Republic Act No. 12023 and Revenue Regulation No. 3-2025
• Applies to digital services used in the Philippines without local presence
• In-scope activities include search engines, e-commerce platforms, cloud providers, social media, and digital content
• VDS portal process involves obtaining a TIN, creating a business account, and filing quarterly returns
• BIR can audit using payment data to detect discrepancies
• Non-compliance may lead to outreach, audits, fines, domain blocking, and business suspension
• Compliance checklist includes monitoring turnover, determining taxable transactions, registering, filing, paying on time, and following invoicing rules
• The rollout marks a major step in digital tax enforcement with a simplified VDS portal
• Delayed deployment created a two-stage registration process
• The law’s broad scope ensures most foreign digital businesses are covered
• Enforcement tools like payment data audits and domain blocking increase compliance pressure
• Businesses should integrate VAT reporting into billing systems to avoid penalties

Source: fiscal-requirements.com

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.

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