The BIR has issued a memorandum which details VAT registration, return filing, and payment procedures for nonresident digital service providers through the VDS portal.

The Philippines Bureau of Internal Revenue (BIR) released Revenue Memorandum Circular No. 78-2025 on 29 July 2025, outlining the guidelines and procedures for nonresident digital service providers (NRDSPs) regarding VAT registration, filing of VAT returns, and payment of VAT through the VAT on Digital Services (VDS) portal.

NRDSPs have been subject to a 12% VAT on all digital services consumed within the Philippines since 2 June 2025. On 2 October 2024, the Philippines’ President enacted Republic Act (RA) 12023, which imposes a 12% value-added tax (VAT) on non-resident digital service providers (DSPs), including streaming platforms such as HBO, Netflix, and Disney.

The BIR mandated VAT registration for digital services via the VDS Portal and Online Registration System starting 1 August 2025. Additionally, a special VAT return (Form 2550-DS) is issued for foreign digital service providers.

Registration and Account Creation 

NRDSPs must enrol via the VDS portal or through a Philippine resident third-party service provider. They are required to register with the BIR through the Online Registration Update System (ORUS), which also allows them to update their registration details and other information. The BIR must be notified of the appointment of a resident third-party service provider within 30 days via email.

VAT Filing and Payment

NRDSPs are required to file their VAT returns and pay the corresponding VAT through the VDS portal by the 25th day of the month following the close of each taxable quarter, based on Philippine time (GMT+8). Payments must be made through integrated payment channels or as prescribed by the BIR. Accurate filing and payment are essential to avoid penalties, surcharges, and interest.

VAT Refunds

Refunds for erroneously paid VAT are not allowed.

BIR Verification

The BIR may verify NRDSP declarations using third-party information. Any discrepancies discovered must be corrected voluntarily to avoid penalties. Non-compliance, misrepresentation, or failure to file or pay VAT may result in surcharges, fines, criminal liability, and site blocking.

Sanctions

Failure to address discrepancies may lead to administrative and criminal sanctions, including suspension of business operations and penalties under Revenue Regulations No. 003-2025.