#vat on digital services

The Department of Finance (DOF) has collected nearly PHP 7 billion from the new 12 percent value-added tax (VAT) imposed on digital services. The Marcos administration is reaching for PHP 21.37 billion in digital VAT revenue for 2026. signed into law the Digital Services Act (likewise known as Republic Act No. 12023 or the Value-Added Tax on Digital Services Law) which aims to expand the existing 12% VAT to digital service providers. RA 12023 amends the National Internal Revenue Code of 1997 (Tax Code) to include digital service providers (DSPs) under the VAT regime. The coverage includes all digital services consumed in the Philippines by digital service providers regardless of whether the service provider is local or foreign. Previously, these services are not covered or exempted from the usual 12% VAT consumers have to pay when purchasing goods and services. The 12% VAT on digital services will finally be implemented starting June 1, 2025. Read more in our articles including "BIR collects over PHP 7 billion from digital services VAT" and "Digital Services Act of 2025 Explained".