THE Bureau of Internal Revenue (BIR) issued Revenue Regulations (RR) 3-2025, prescribing policies and guidelines for the implementation of Republic Act (RA) 12023, the law which imposes value-added tax (VAT) on digital services by amending several provisions of our National Internal Revenue Code (Tax Code).
THE Bureau of Internal Revenue issued Revenue Regulations 3-2025, prescribing policies and guidelines for the implementation of Republic Act 12023, the law which imposes value-added tax on digital services by amending several provisions of our National Internal Revenue Code .
RA 12023, which provides that the service should be 'essentially automated,' is consistent with this general definition. This means digital services must be either entirely automatic, for example, a consumer clicks 'buy now' on the website and the content downloads onto their device, or basically automatic, because the small amount of manual process involved does not change the nature of the supply from an e-service .
'Digital Goods' And 'Digital Services' For VAT Purposes
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