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Revenue Regulations · RR

RR 3-2025

To prescribe policies and guidelines for the implementation of Republic Act No. 12023, which amends Sections 105, 108, 109, 110, 113, 114, 115, 128, 236 and 288 and adds Sections 108-A and 108-B of the National Internal Revenue Code of 1997, as amended, imposing VAT on digital services.

Bureau of Internal RevenueIndependent research copy
Document type
RR
Number
3
Year
2025
Text quality
Not specified

Document text

Reference copy · verify against the official source
RR No. 3-2025 (issued Jan. 17, 2025) implements Republic Act No. 12023, which imposes 12% value-added tax (VAT) on digital services. VAT is levied on the gross sales of Digital Service Providers (DSPs) for services consumed or used in the Philippines; a service is considered consumed in the Philippines if the buyer is located there. Resident DSPs register with the BIR under Section 236 of the Tax Code; nonresident DSPs register through the VAT on Digital Services (VDS) Portal, with suspension and penalties for failure to register. Resident VAT-registered DSPs file and pay VAT under regular rules; resident e-marketplaces with nonresident participating merchants/sellers must withhold and remit the 12% VAT within ten (10) days after the month. In B2B transactions, the business buyer (including government and GOCCs) withholds and remits the VAT; in B2C transactions, the nonresident DSP directly files and pays the VAT through a simplified pay-only regime in the VDS Portal within twenty-five (25) days after each taxable quarter.