[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.

What are the registration requirements I need to prepare as a DSP?

Whether you’re a resident or nonresident DSP, you still need to register to the BIR following the policies and procedure under Section 236 of the Tax Code. The nonresident DSP:

(1) need not have a local representative, but may appoint of third-party service providers (e.g. consultancy firm); 

(2) shall be issued a Certificate of Registration (COR) with TIN; 

(3) may be liable to penalties and suspension of business operations upon failure to register.

Is there a deadline on registering to the BIR, following the new regulation implemented for VAT on Digital Service Providers (DSPs), or can I register anytime? 

The Revenue Regulations 14-2025 provided an amended transitory provision indicating that all nonresident DSPs (NRDSPs) are required to register to BIR through the VDS Portal or Online Registration and Update System. Here are what you need to remember:

The commissioner of the Bureau of Internal Revenue may further extend the deadline as the case may deem necessary.

The content provided in this article above is for general purposes only. If you want to know how these regulations affect your business, CONSULT ACG or email us at consult@acg.ph.