The Bill seeks to give effect to five key changes to the way the digital economy is currently taxed, to better capture value created into the tax system.
The Philippine House of Representatives has introduced House Bill No. 6765, which seeks to establish a fiscal regime for the digital economy.
The Bill responds to the increased urgency of finding new sources of revenue to find the country’s efforts to recover from the adverse impacts of COVID-19 and anticipates increasing digitization of the country’s economy, the explanatory memorandum states.
The Bill seeks to give effect to five key changes to the way the digital economy is currently taxed, to better capture value created into the tax system, the memorandum adds.
The changes would make “network orchestrators” like Grab, Angkas, and other similar services that link customers and providers withholding agents for income taxes, to ease their partners of the burden of having to pay their own taxes, while also encouraging tax compliance.
The Bill clarifies that services rendered electronically in the course of trade or business are liable to value added tax (VAT). Such services as digital advertising by internet giants such as Google and Facebook and subscription-based services such as those of Netflix and Spotify, are subject to VAT, the explanatory memorandum notes.
Finally, the Bill requires that those who render digital services must do so through a resident agent or a representative office in the Philippines.
The author is Alex Hunter, Editor, TP News. He oversees and updates the publication and also regularly writes news stories about transfer pricing and international tax law. Alex is reachable at editor@transferpricingnews.com
You must be logged in to post a comment.