VAT on Netflix, other digital services to be signed soon: DOF official

Andrea Taguines

ABS-CBN News

MANILA - Foreign digital service providers like Netflix will soon be subjected to value added tax in the Philippines, an official of the Department of Finance (DOF) said on Wednesday.DOF Undersecretary Domini Velasquez said the bill, which hurdled Congress in late July, will be signed into law by President Ferdinand Marcos Jr. by October 2, 2024.“So (that’s an) additional revenue measure for us,” said Velasquez, during her speech at the Management Association of the Philippines’ General Membership Meeting in Taguig.But Velasques noted that this is “not a new tax.”“It’s a way of leveling the playing field for your domestic providers with external providers such as your Netflix, your Amazon,” she explained.According to the DOF, the measure is seen to generate P79.5 billion for the government from 2025 to 2028. Under the bill, digital services delivered by non-resident digital service providers shall be considered performed or rendered in the Philippines if the digital services are consumed in the Philippines.The digital service provider shall be liable for assessing, collecting, and remitting the value added tax. This shall cover online search engines, online marketplaces or e-marketplaces, cloud services, online media and advertising, online platform or digital goods.<div><iframe width="640" height="360" src="https://www.youtube.com/embed/8gq8yHw8aYE?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>Online marketplaces or e-marketplaces shall be liable to remit the value added tax on the transactions of nonresident sellers that go through its platforms under certain conditions. It also earmarks 5 percent of incremental revenues for the development of creative industries for 5 years after the bill becomes law.Apart from the VAT on digital providers, the other tax reforms that the DOF expects to be passed into law before the end of the year are as follows:•  CREATE MORE<span id="isPasted" style="color:rgb(65, 65, 65);letter-spacing:normal;orphans:2;text-align:left;text-indent:0px;text-transform:none;widows:2;word-spacing:0px;-webkit-text-stroke-width:0px;white-space:normal;background-color:rgb(255, 255, 255);text-decoration-thickness:initial;text-decoration-style:initial;text-decoration-color:initial;display:inline !important;float:none">•  Package 4 of the Comprehensive Tax Reform Program<span id="isPasted" style="color:rgb(65, 65, 65);letter-spacing:normal;orphans:2;text-align:left;text-indent:0px;text-transform:none;widows:2;word-spacing:0px;-webkit-text-stroke-width:0px;white-space:normal;background-color:rgb(255, 255, 255);text-decoration-thickness:initial;text-decoration-style:initial;text-decoration-color:initial;display:inline !important;float:none">•  Rationalization of the Mining Fiscal Regime<span id="isPasted" style="color:rgb(65, 65, 65);letter-spacing:normal;orphans:2;text-align:left;text-indent:0px;text-transform:none;widows:2;word-spacing:0px;-webkit-text-stroke-width:0px;white-space:normal;background-color:rgb(255, 255, 255);text-decoration-thickness:initial;text-decoration-style:initial;text-decoration-color:initial;display:inline !important;float:none">•  Excise Tax on Single-Use Plastics<div> </div><div>ASSET SALE</div>As for non-tax revenue measures, Velasquez said the government is eyeing the sale of several idle assets that are “ripe for investments” over the next few years.“These idle assets will not only be able to generate revenues for the government but will also increase the value of these assets that have been lying around in Metro Manila, for example,” she said.These include the Star City property, the Mile Long Building, condominium units located in Atrium in Makati City, the Elorde Sports and Tourism Development Corporation.“Kailangan lang ayusin yung titles. But I think there’s already a government directive ensuring that some of the titles na magulo pa should be named to the Republic of the Philippines so they can be up for privatization,” said Velasquez.There are also plans to unload government shares in Semirara Mining and Power Corporation as well as shares of stock in the United Coconut Chemicals, Inc.Speaking to the media, Velasquez said the sale of the Semirara shares, of which the government has 145 million shares, could happen next year.“Wala pa how much kasi iva-value yun diba? Most important is the valuation of the share and then looking for investors. But valuing the share, especially ngayon na gumagalaw yung market, would be very important and timing-wise,” she said.The DOF believes the revenues from both its tax and non-tax measures will lead to a significant reduction of the Philippines’ budget deficit and would, in turn, also help the Marcos administration achieve its goal of reducing the country’s debt-to-GDP ratio to below 60 percent by 2028.

Foreign digital service providers like Netflix will soon be subjected to value added tax in the Philippines, an official of the Department of Finance said.

Foreign digital service providers like Netflix will soon be subjected to value added tax in the Philippines, an official of the Department of Finance said.

VAT on Netflix, other digital services to be signed soon: DOF official | ABS-CBN

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VAT on Netflix, other digital services to be signed soon: DOF official

VAT on Netflix, other digital services to be signed soon: DOF official

Andrea Taguines,

ABS-CBN News

Published Sep 25, 2024 05:22 PM PHT

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Updated Sep 25, 2024 05:27 PM PHT

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