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