Philippines: Entry into force with grace period of Bill Amending and Adding New Sections of the National Internal Revenue Code including registration requirement (SB No. 2528)

On 18 October 2024, the Bill Amending and Adding New Sections of the National Internal Revenue Code, including registration requirements for digital services (SB No. 2528), entered into force. The Bill mandates non-resident digital services providers (DSP) to register for and collect a 12% value-added tax (VAT) on digital services consumed in the country. The digital services include online search engines, marketplaces, cloud services, media and advertising, platforms, and digital goods. Non-resident DSPs would be required to charge and collect VAT for their services made to final consumers (B2C sales), while business customers would be required to self-assess and remit the applicable VAT for B2B sales. The DSP would be required to register for VAT if its gross sales exceed PHP 3 million in a 12-month period. The Bill also includes penalties for non-compliance, including blocking digital services for failure to register.