New VAT guidelines in Philippines could lead to closure of non-compliant digital service providers

The Bureau of Internal Revenue (BIR) in the Philippines has proposed a regulation to impose a 12% Value Added Tax (VAT) on digital services, in accordance with Republic Act No. 12023. This regulation allows the BIR to issue closure orders against digital service providers (DSPs) that fail to register or comply with the VAT law. The Department of Information and Communications Technology (DICT) and the National Telecommunications Commission (NTC) will enforce these orders.