06/05/2025
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DIGITAL SERVICES LAW: What platforms will be affected?
The Value Added Tax (VAT) on Digital Services Law affects foreign or non-resident Digital Service Providers (DSPs) that provide services to Filipino consumers. The platforms impacted by this law include those offering digital goods, services, and subscriptions. Hereβs a breakdown of the types of platforms likely affected:
1. Streaming Services
Platforms that provide access to video, music, or other multimedia content:
- Netflix
- Spotify
- YouTube Premium
- Amazon Prime Video
- Disney+
2. App Stores and Software Providers
Digital marketplaces and software companies offering applications, games, or productivity tools:
- Apple App Store
- Google Play Store
- Microsoft (Office 365, Azure, etc.)
- Adobe Creative Cloud
- Autodesk
3. Freelancing and Gig Platforms
Platforms used by freelancers and remote workers to find gigs or receive payments:
- Upwork
- Fiverr
- Toptal
4. Cloud and Hosting Services
Services providing storage, website hosting, or other cloud-based tools:
- Amazon Web Services (AWS)
- Google Cloud
- Dropbox
- OneDrive
- GoDaddy
5. E-Commerce and Online Marketplaces
Foreign e-commerce platforms offering goods or services to Filipino consumers:
- Shopify (for subscription fees)
- Etsy (if they charge subscription or listing fees)
6. Online Learning Platforms
Platforms offering digital courses or training:
- Udemy
- Coursera
- Skillshare
- LinkedIn Learning
7. Gaming Platforms
Online marketplaces and services for games, in-game purchases, and subscriptions:
- Steam
- Epic Games Store
- PlayStation Store
- Xbox Game Pass
Implementation and Compliance
Under the law, these platforms are required to:
- Register with the Bureau of Internal Revenue (BIR).
- Collect the 12% VAT on transactions with Filipino consumers.
- Remit the collected VAT to the Philippine government.
For Filipino users of these platforms, the additional VAT may be reflected in their subscription fees, purchase costs, or other charges.
Are you using any of these sites? Expect some changes starting June 1, 2025.
Photo Source: https://pco.gov.ph/news_releases/pbbm-signs-vat-on-digital-services-law/