General information
Registration & Deadlines
- VAT registration deadline: 1 June 2025 (via ORUS before the VDS portal opened).
- First quarterly return via VDS portal: due 5 August 2025.
- Quarterly VAT returns are due by the 25th day of the month following each quarter.
Legal Basis & Scope
- Introduced under Republic Act No. 12023 and Revenue Regulation No. 3-2025.
- Applies to digital services used, enjoyed, or exploited in the Philippines, even without local presence.
- In-scope activities include:
- Search engines (Google, Yahoo)
- E-commerce platforms (Amazon, eBay, Shopify)
- Cloud providers (AWS, Alibaba Cloud)
- Social media (LinkedIn)
- Digital content (Netflix, Spotify, etc.)
VDS Portal Process
- Obtain a TIN via ORUS.
- Create a business account on the VDS portal.
- File quarterly VAT returns and pay corresponding amounts.
Enforcement & Penalties
- The BIR can audit using data from payment service providers to detect discrepancies.
- Non-compliance may lead to:
- Initial outreach to correct errors
- Tax audits
- Fines and domain blocking
- Penalties under Section 13, and possible business suspension under Section 12 of RR 3-2025.
Compliance Checklist
- Monitor turnover for threshold obligations
- Determine taxable transaction types
- Register promptly
- File and pay on time
- Follow invoicing and recordkeeping rules
This rollout marks a major step in the Philippines’ digital tax enforcement. The simplified VDS portal is designed to improve compliance among non-resident providers, but delayed deployment created a two-stage registration process (ORUS first, then VDS). The law’s broad scope ensures that most foreign digital businesses—streaming platforms, marketplaces, cloud providers—are caught under the rules. Enforcement tools like payment data audits and domain blocking significantly raise compliance pressure. Businesses should integrate VAT reporting into their billing systems to avoid penalties.
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