[Ask The Tax Whiz] Reminder on the registration of non-resident DSPs

We are a Digital Service Provider (DSP) to our customers from the Philippines, but we do not have a physical office in the same country. Are we still subject to Value-added Tax (VAT)?

Yes, according to the Revenue Regulations (RR) 3-2015, digital services provided by a nonresident DSP shall be considered performed, rendered, supplied, or delivered within the Philippines if such digital services are consumed in the Philippines. Hence, gross sales shall be subject to twelve percent (12%) VAT.