#VAT on digital transactions

The House of Representatives approved the bill imposing a 12% value-added tax (VAT) on all digital and electronic transactions for goods and services. The bill aims to level the playing field between traditional and digital businesses by imposing a VAT on digital transactions. The proposed bill seeks to amend Section 105-A of the National Internal Revenue with a provision making a non-resident digital service provider (DSP) liable for assessing, collecting, and remitting the VAT on the transactions that pass through its platform. In addition, The bill covers digital transactions on subscription-based video and audio streaming services, online advertising services, and other online 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 largest amount collected was PHP 3.79 billion from withholding VAT on business-to-business (B2B) transactions as of September 25. It was also noted that cashless payments and online transactions have aided the traceability of digital activities. The Marcos administration is reaching for PHP 21.37 billion in digital VAT revenue for 2026. Read more in our articles including "House approves bill imposing 12% VAT on digital transactions" and "BIR collects over PHP 7 billion from digital services VAT".