In line with the Philippine government’s digital transformation initiatives and pursuant to Republic Act 12023 and its implementing rules, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) 78-2025 on July 29, 2025. The circular outlines the registration, filing and payment procedures for Value-Added Tax (VAT) by Nonresident Digital Service Providers (NRDSPs) offering digital services to consumers in the Philippines through the newly launched VAT on Digital Services (VDS) Portal.
NRDSPs are required to enroll in the VDS Portal. If they are not yet registered with the BIR, they
must first do so using the Online Registration and Update System (ORUS). Any updates to existing registration or VAT information may also be done through ORUS. For VAT compliance, NRDSPs are required to file VAT returns and pay the corresponding VAT on or before the 25th day following the close of each taxable quarter. This must be done through the VDS Portal and in accordance with the Philippine Time Zone (GMT+8). Payments should be made via authorized channels integrated into the portal or as may be prescribed by the BIR.
NRDSPs must log in to the VDS Portal, encode the required data for filing in BIR Form 2550-
DS, and ensure payment is made at the time of filing to avoid surcharges, interest and penalties. While refunds for erroneously paid VAT will not be allowed, NRDSPs may amend their filed BIR Form 2550-DS to reflect the overpayment and apply the same to succeeding quarters.
Pursuant to RMC 79-2025 issued on July 31, 2025, the deadline for the filing and payment of
BIR Form 2550-DS for the second quarter ending June 2025, originally set on July 25, 2025, is
further extended until Aug. 5, 2025.
To monitor compliance, the BIR may conduct independent verification, including third-party
information or sources and comparing it with declared gross sales. Discrepancies found will be
communicated to the NRDSP for voluntary correction. Failure to rectify such discrepancies may result in administrative and criminal sanctions, including possible suspension or closure of online business operations, as outlined under Sections 12 and 13 of RR 3-2025.
All data submitted through the VDS Portal shall be treated as confidential and protected under the Data Privacy Act of 2012 (RA 10173) and other applicable tax laws and regulations.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants