New Philippine Bill to Be Implemented Soon
Jayson 30 Aug 2024 09:45
The Philippine Department of Finance announced that President Marcos Jr. is about to sign a new bill that will impose a 12% value-added tax (VAT) on foreign digital service providers, including Netflix.
Finance Secretary Ralph Recto said at a Senate hearing on August 27 that the Department of Finance and the Bureau of Internal Revenue are preparing the implementing rules and regulations (IRR) of the bill, which is expected to be officially implemented soon.
The bill, which received final approval from the bicameral conference committee on June 27, aims to create a level playing field and ensure that major online service providers are effectively taxed.
The new law only applies to foreign service providers with annual revenue of more than 3 million pesos and is expected to bring in about 20 billion pesos in tax revenue next year.
It is worth noting that although the new bill stipulates a 12% VAT for these service providers, in the initial stage, the Department of Finance and the Bureau of Internal Revenue may first implement a lower 0.5% consumption tax instead of the predetermined rate of 3%. This move marks an important step in the Philippines' tax policy for regulating foreign digital service providers.
Finance Secretary Ralph Recto said at a Senate hearing on August 27 that the Department of Finance and the Bureau of Internal Revenue are preparing the implementing rules and regulations (IRR) of the bill, which is expected to be officially implemented soon.
The bill, which received final approval from the bicameral conference committee on June 27, aims to create a level playing field and ensure that major online service providers are effectively taxed.
The new law only applies to foreign service providers with annual revenue of more than 3 million pesos and is expected to bring in about 20 billion pesos in tax revenue next year.
It is worth noting that although the new bill stipulates a 12% VAT for these service providers, in the initial stage, the Department of Finance and the Bureau of Internal Revenue may first implement a lower 0.5% consumption tax instead of the predetermined rate of 3%. This move marks an important step in the Philippines' tax policy for regulating foreign digital service providers.
