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Philippines VAT on foreign digital services

  • Sep 15, 2020 | Richard Asquith

The Philippines House of Representatives has consolidated some of the existing proposals for requiring foreign digital service providers (DSP) to levy and collect 12% VAT on sales to local consumers. Services to government bodies are subject to 5% VAT.

House Bill 7245 now clarifies that DSP located abroad will be liable to charging VAT if their annual sales are expected to exceed PHP 3m. Registration is for a simplified VAT return, without the right to deduct any input VAT incurred in the Philippines. Keep up to date with Avalara's global VAT on digital services tracker.

DSP characteristics include:

  • Selling online goods or services
  • Providing supplies via an online platform – either their own, or acting as an intermediary for other providers
  • Subscription fee-based services for digital services
  • Auction sites are included

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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