CandleFocus

Philippines to impose 12% VAT on foreign digital services

Author: Content Editor
The Philippine President, Ferdinand Marcos Jr., has signed a new law mandating a 12% value-added tax (VAT) on digital services provided by both local and foreign digital service providers (DSPs). The tax will affect popular platforms such as Netflix, HBO, Disney+, Amazon, and Shopee, ensuring that foreign companies contribute taxes when offering services in the Philippine market. This move aims to level the playing field between local and foreign service providers and address the unfair advantage that foreign companies had during the pandemic. The law applies to a wide range of digital services, including streaming, e-commerce, search engines, and cloud computing. Educational and public interest services are exempt from the VAT. Critics have raised concerns about potential increases in subscription fees for consumers, while others see the law as a step towards a fairer digital economy and a boost for the creative industries. The Philippines is following the lead of neighboring countries in implementing similar digital tax measures.

Related News