BIR extends deadline for tax registration of foreign digital service providers

The Bureau of Internal Revenue (BIR) has given foreign or Non-Resident Digital Service Providers (NRDSPs) more time to register with the tax collection agency's database.

In a statement issued Tuesday, the BIR said Commissioner Romeo Lumagui Jr. issued Revenue Memorandum Circular (RMC) No. 58-2025, which extended the deadline for the online or electronic registration of all NRDSPs until July 1, 2025.

“Said Circular is in response to the unavailability of the VAT on Digital Services (VDS) Portal and the Online Registration and Update System (ORUS) due to ongoing system migration activities being undertaken by the Bureau,” the taxman said.

“The extension of the deadline was made to give affected NRDSPs sufficient time to comply with the Bureau’s registration requirements,” it added.

The tax collection agency said the latest circular further clarified that existing NRDSPs that are already registered with the BIR but have not yet updated their classification to reflect their status as "Non-Resident Digital Service Provider," and/or those who have not included VAT in their registered tax type/form, “must amend their registration information accordingly.”

“RMC No. 58-2025 also emphasized that the extended registration deadline does not exempt NRDSPs from their tax obligations,” the BIR said.

“Non-registration for VAT does not relieve them of the obligation to file the required tax return and pay the corresponding tax due,” it said.

“Additionally, buyers or customers who are engaged in business remain liable to file the appropriate remittance return, and to withhold and remit the VAT due on their purchase of digital services within the period prescribed under the National Internal Revenue Code of 1997, as amended, and in accordance with the relevant rules and regulations issued by the Bureau,” it added.

In October last year, President Ferdinand Marcos Jr. signed into law Republic Act No. 12023 which slapped a 12% VAT on non-resident digital services.

The BIR said the VAT on digital services provided by foreign entities is not a new tax, but was meant to level the playing field among local traditional enterprises and digital service firms. 

The taxman had said digital services delivered by foreign or non-resident digital service providers are considered rendered in the Philippines if the digital services are consumed in the Philippines.

The law defines digital service as any service that is supplied over the internet or other electronic network with the use of information technology and where the supply of the service is essentially automated.

This includes online search engines, online marketplace, e-marketplace, cloud service, online media and advertising, online platform, or digital goods. 

“We encourage all affected NRDSPs and businesses engaged in digital services to closely monitor further announcements of the BIR and to ensure timely compliance with the Bureau’s registration requirements once the VDS Portal and ORUS become available,” said Lumagui. — RSJ, GMA Integrated News