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Philippines to tax foreign digital services



The Philippine Senate approved a bill to impose a 12% value-added tax (VAT) on digital services provided by companies with no physical presence in the country. Senate Bill No. 2528, passed unanimously, mandates nonresident digital service providers to collect and remit VAT on all transactions with Filipino customers. These providers must register with the Bureau of Internal Revenue (BIR). The bill targets digital services like online marketplaces, cloud services, and digital goods, potentially affecting firms like Amazon and AliExpress. Non-compliance could result in service suspension by the BIR. Exemptions include accredited online educational programmes and digital banking services. The Department of Finance anticipates PHP83.8bn (USD1.4bn) in revenue from 2024 to 2028.

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