BIR: VAT on non-resident digital services now in effect

MANILA — The Bureau of Internal Revenue (BIR) on Wednesday confirmed that the implementation of the 12 percent value-added tax (VAT) on non-resident digital service providers, including streaming platforms, are now in effect beginning June 1.

These digital platforms are now required to register online, file VAT returns, and remit payments via BIR’s digital systems.

"Ngayong buwan ng Hunyo, ngayong June 1 effective yang implementation ng VAT on digital service providers, non-resident digital," said BIR Commissioner Romeo Lumagui Jr.

Asked how these providers can pay, as they do not have physical offices in the Philippines, Lumagui said that they can do so online.

"Nakasa na po 'yan. Magre-register sila online at magfa-file ng kanilang returns at magbabayad din online," he explained.

The agency expects to collect around ₱10.8 billion from this initiative in the second half of 2025.

Asked whether price increases from streaming platforms are expected, BIR officials acknowledged it is possible, but they believe companies will weigh the impact of price hikes on subscriber numbers.

"Tingin natin na it's a possibility na magtaas. Pero siyempre, kailangan din naman nilang isaalang-alang 'yung kung magtaas sila ng presyo kung ano ang epekto nito sa magiging subscribers nila," Lumagui said.

While no violations have been recorded yet, the BIR warned that non-compliant platforms may face service shutdowns in the country.

"Meron tayong mekanismo na pwede nating i-shut down ang kanilang services. So kapag hindi sila nag-rehistro at nakita natin na talagang meron silang mga kliyente dito or subscribers dito at hindi sila nag-rehistro at hindi nagbayad ay yan ang consequence niyan. Shut down natin sila," Lumagui said.