On 29 July 2020, the Philippines House Committee on Ways and Means approved a substitute bill containing three previously submitted bills, including Bill H.B. 6755, which was initially submitted in May 2020 to impose VAT on digital services. The bill provides that a non-resident digital service provider will be required to register for VAT in the Philippines if:
If a non-resident provider is required to register but fails to do so, the bill provides for a 12% withholding tax to be levied at the time of payment.
For VAT purposes, a digital service provider is defined as an entity that provides digital service or goods to a buyer through an online platform for purposes of buying and selling of goods or services or by making transactions for the provision of digital services on behalf of any person. In particular, this can include:
A digital service is defined as any service that is delivered or subscribed over the internet or other electronic network and which cannot be obtained without the use of information technology and where the delivery of the service may be automated. This includes, among others, online licensing of software, mobile applications, video games, online games, the provision of digital content, electronic marketplace services, internet-based communication services, database and hosting services, etc.
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