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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 the former VP Global Indirect Tax at Avalara
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