This law ensures fair tax treatment for all digital businesses in the Philippines and is expected to boost revenue collection for national development. The law requires foreign digital service providers (DSPs) with gross sales over PHP 3 million to register for VAT and appoint a local agent for compliance.

• A 5% VAT will apply to foreign DSPs providing services to the government;
• Education and Subscription to to recognized institutions are exempt;
• Imposing 12% VAT on all digital services consumed in the country aims to create a level playing field

Digital services include online search engines, marketplaces, cloud services, online media, online advertising, and digital goods. There will be a 120-day transition period to implement the law, with various government officials present at the signing.