Philippines Introduces 12% VAT on Global Tech Giants

The Philippines has introduced a 12% value-added tax on digital services from non-resident tech giants like Amazon and Netflix. This move aims to level the playing field with local businesses, collect significant revenue, and promote fair market competition. Certain educational and public interest services are exempt.

The Philippines is set to implement a 12% value-added tax (VAT) on digital services provided by international tech companies, including Amazon, Netflix, Disney, and Alphabet, as announced by its internal revenue agency on Thursday.

President Ferdinand Marcos Jr has signed the law, which targets non-resident digital service providers such as streaming platforms and online search engines. According to Bureau of Internal Revenue Commissioner Romeo Lumagui, the measure aims to ensure fair competition among companies benefiting from Filipino consumers, ensuring domestic and international players pay the same taxes.

The government expects to garner 105 billion pesos ($1.9 billion) from this tax between 2025 and 2029, with 5% dedicated to funding projects for the country's creative industries. While firms such as Netflix and others have yet to respond, the policy exempts education and specific public interest services from this tax.

(With inputs from agencies.)