The Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui has announced the upcoming release of a revenue regulation that mandates foreign digital services to pay Value Added Tax (VAT).
According to Commissioner Lumagui, this measure aims to determine how foreign companies engaged in digital services will report their revenue.
He assured that the BIR would have a clear understanding of the true revenue status of these foreign companies since they can track sales and transactions on their platforms.
The BIR will not only monitor compliance but will also cross-check payments and other transactions.
If discrepancies arise, the BIR will reach out to the concerned company, and they hold the authority to block the company’s platform or website for non-compliance.
In addition to blocking access to non-compliant websites, the BIR will impose penalties and surcharges on digital service providers that fail to comply with the regulations.