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REVENUE MEMORANDUM CIRCULAR (RMC) NO. 078-2025
Pursuant to Republic Act No. 12023 and its implementing rules under Revenue Regulations No. 3-2025, digital services rendered by NRDSPs to consumers in the Philippines are now subject to a 12% Value-Added Tax (VAT). To streamline compliance, the Bureau of Internal Revenue (BIR) has introduced the VAT on Digital Services (VDS) Portal, facilitating NRDSPs’ registration, filing of returns, and VAT payments.
I. Definition of Terms
- Digital Services – automated services delivered via electronic network per RR No. 3‑2025
- Digital Service Provider (DSP) – refers to a resident or nonresident supplier of digital services to a buyer who uses digital services subject to VAT in the Philippines
- Nonresident DSP (NRDSP) – DSP with no physical presence in the Philippines
- Resident Third‑Party Service Provider – a local representative appointed by NRDSPs to assist with registration, filing, payments, and notices
- ORUS – the online registration system used to register or update taxpayer information before accessing the VDS Portal.
II. General Guidelines
- Scope: Applies to all NRDSPs supplying digital services consumed in the Philippines
- Registration:
- Via VDS Portal, or
- Through a local third‑party service provider, or
- Via initial registration using the ORUS system if not yet registered with BIR
- Notification: NRDSPs that appoint a resident third-party service provider must notify the BIR within 30 calendar days via email (to [email protected]), attaching the letter of appointment in PDF format and using the email subject line: “Notice of Appointment – [NRDSP’s Philippine TIN]”. For VAT purposes, this appointment does not classify the NRDSP as a resident foreign corporation doing business in the Philippines.
- Filing and Payment:
- VAT returns (Form 2550‑DS) and payment are due by the 25th day of the month following each taxable quarter (Philippines GMT+8)
- Filing and payment must be done through the VDS Portal using authorized channels.
- Non‑compliance: Misrepresentation, late filing/payment, or non-remittance may result in surcharges, interest, penalties, possible criminal liability, and site blocking under the National Internal Revenue Code and RR No. 3‑2025.
- Overpayments: No refunds allowed; overpayment may be amended via Form 2550‑DS and carried over to succeeding quarters.
- Verification: BIR may cross-check reports using third‑party information to ensure accurate declarations.
- Data Protection: All submitted data is protected under the Data Privacy Act of 2012 (RA 10173).
III. Procedures
| Category | Key Points |
| Registration and Enrollment | The NRDSP shall create an account by accessing the official VDS Portal link https://vds.bir.gov.ph and following the instruction provided in the VDS User Guide posted in the VDS Portal. |
| Filing and Payment | NRDSPs must file their VAT returns using BIR Form No. 2550-DS through the VDS Portal by the 25th day of the month following each taxable quarter. For the quarter ending June 2025, the filing deadline was extended to August 5, 2025. Payments should be made via authorized channels within the portal to avoid penalties. Failure to comply may result in surcharges, interest, and other penalties |
| Monitoring the Compliance of DSPS | The BIR may independently verify whether NRDSPs are accurately declaring their gross sales and those of their customers for VAT purposes. This includes conducting audits and utilizing third-party information sources. If discrepancies are found, NRDSPs will be notified and given an opportunity to correct them. Failure to rectify such discrepancies may lead to administrative and criminal sanctions, including the suspension or closure of online business operations, as stipulated in Sections 12 and 13 of RR No.3-2025. |