RMC No. 47-2025: Clarifying the provisions of RR No. 3-2025, implementing RA No. 12023 titled “An Act Amending Sections 105, 108, 109, 110, 113, 114, 115, 128, 236 and 288 and Adding New Sections 108-A and 108-B of the National Internal Revenue Code of 1997, as Amended,” imposing the Value-Added Tax on Digital Services

Summary

RMC No. 47-2025 clarifies provisions of RR No. 3-2025, which implements RA No. 12023 imposing VAT on digital services.

Key points

1. Registration of NRDSPs. All Non-Resident Digital Service Providers must register or update with the BIR under Section 5 of RR No. 3-2025, whether their transactions are B2B, B2C or both. Those with purely B2B transactions must still file returns. Registration is through the VDS Portal once available, and before then through ORUS, within one hundred twenty (120) days from effectivity or on or before June 1, 2025.
2. Registration details. Registrants give the entity name, authorized representative, registered foreign address and contact information. A foreign registration document naming the NRDSP suffices, and no local representative is needed, though a resident third-party service provider may be appointed without making the NRDSP a resident foreign corporation doing business in the Philippines.
3. VAT liability. NRDSPs are liable for 12% VAT on gross sales of digital services consumed in the Philippines, starting June 2, 2025. Failure to register brings penalties under Section 13 and possible suspension of business operations under Section 12 of RR No. 3-2025.
4. B2B and B2C. In B2B sales, including to the Government and GOCCs, the Philippine buyer withholds and remits the 12% VAT using BIR Form No. 1600-VT under a reverse charge mechanism. In B2C sales, the NRDSP files and pays through the VDS Portal using BIR Form No. 2550-DS.
5. Invoices and input tax. No form of invoice is prescribed if it shows the date, transaction reference number, consumer identification, brief description, and total amount stating that it includes VAT. Non-resident VAT-registered DSPs cannot claim creditable input tax under Section 7(B), and VAT-registered Philippine buyers use BIR Form No. 1600-VT to support input VAT claims.
6. Scope and examples. Digital services are those supplied over the internet or an electronic network and essentially automated. Online medical teleconsultation through a platform is subject to VAT, and online subscriptions sold to DepEd, CHED or TESDA-accredited institutions are VAT-exempt on presenting their accreditation without a Certificate of Tax Exemption.

Who is affected

• Non-Resident Digital Service Providers
• Philippine business buyers of digital services
• E-marketplaces and online platforms
• DepEd, CHED and TESDA-accredited educational institutions

Deadlines and effectivity

• Registration: within 120 days from effectivity, on or before June 1, 2025
• VAT liability begins June 2, 2025
• Issued May 8, 2025

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.