BIR: Online registration for foreign DSPs extended

The Bureau of Internal Revenue (BIR) extended its online registration period for non-resident digital service providers (NRDSPs) until 1 July.

BIR stressed it will continue to impose tax obligations on NRDSPs pending their completion of the online registration. This also applies to NRDSPs that have yet to update their tax classification into value-added tax or VAT-registered businesses.

NRDSPs include Netflix, Google, Amazon, and Spotify, among others. The policy also covers e-commerce platforms like Temu, AliExpress, and Shein.

In its Revenue Memorandum Circular (RMC) No. 58-2025, the government agency said it extended the deadline for such registration as it is still completing the integration of VAT into the Digital Services Portal and the Online Registration and Update System.  

"Additionally, buyers or customers who are engaged in business remain liable to file the appropriate remittance return, and to withhold and remit the VAT due on their purchase of digital services within the period prescribed under the National Internal Revenue Code of 1997, as amended, and in accordance with the relevant rules and regulations issued by the Bureau," BIR said.

In October last year, President Ferdinand Marcos Jr. signed into law Republic Act No. 12023 or the Value-Added Tax on Digital Services to streamline the government's 12-percent VAT collection not only from local DSPs but also the foreign firms and boost public funds.

"We are just merely correcting the current system that creates an unfair advantage to foreign digital service providers and weakens the country’s tax base, forgoing much-needed revenues that could have been used to fund crucial public services, infrastructure, and other socio-economic programs," said Department of Finance Secretary Ralph Recto.

The VAT is imposed on NRDSPs that registered year-ago gross sales or receipts amounting to more than P3 million.

However, those that provide services to the government should pay 5 percent VAT while others that distribute services for educational purposes are VAT-exempt.

Recto expects government revenues to increase by P7.25 billion this year, with a 50 percent compliance rate among NRDSPs. By 2028, he said the VAT collection from NRDSPs should have reached P83.8 billion.