Proposed new VAT on digital services

OUR government is poised to expand its wings, to take advantage of the global growth of the digital economy.

The Senate approved on third reading Senate Bill (SB) 2528, a bill proposing to impose the 12 percent value-added tax (VAT) on suppliers of digital services. This will be done by amending our National Internal Revenue Code (Tax Code) to expressly include "digital services" and "digital service providers" as among the transactions and entities subject to VAT. The VAT is due whether the digital service provider is a resident or nonresident, i.e., one without any physical presence in the Philippines.