(2024.10.02) President Ferdinand R. Marcos Jr. signed into law Republic Act (RA) No. 12023, otherwise known as the Value-Added Tax (VAT) on Digital Services Law

President Ferdinand R. Marcos Jr. signed into law Republic Act (RA) No. 12023, otherwise known as the Value-Added Tax (VAT) on Digital Services Law, in a ceremonial signing held at the Ceremonial Hall, Malacañan Palace, Manila 02 October 2024.

RA 12023 provides that digital services are now explicitly part of the coverage of Philippine tax law. The measure also clarified that even non-resident digital service providers who have no physical presence in the country but render services within the Philippines and whose services are consumed domestically will be covered by the law.

The said law is among the priority measures of the Marcos Jr. administration. RA 12023 amends certain provisions of the National Internal Revenue Code (NIRC) of 1997 to make the collection of taxes more equitable and attuned to the changes in the economic landscape brought about by rapid advances in the use of technology. It specifically targets foreign companies not based in the country that continue to provide services to Filipino consumers.

Exempted from the law are digital educational services, including online courses and webinars offered by private institutions and the sale of online subscription-based services to educational institutions recognized by government agencies.

In his message, President Marcos Jr. emphasized that the law does not impose new taxes but simply strengthening the authority and streamlining the process of the Bureau of Internal Revenue (BIR) to collect VAT on digital services. President Marcos Jr. also enjoined everyone to continue building a stronger and fairer Bagong Pilipinas.

Presidential Legislative Liaison Office (PLLO) Secretary Mark Llandro L. Mendoza, together with other PLLO officials and staff, attended the said ceremonial signing.