The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 59-2026 on June 2, 2026, to provide much-needed clarity on the imposition of value-added tax (VAT) on digital services, as reported by BusinessWorld.
The circular defines which digital services are subject to VAT, including online advertisement, streaming services, and digital platforms, and specifies that non-resident digital service providers may be required to register and remit VAT if they meet certain thresholds. It also outlines invoicing and record-keeping requirements for affected businesses.
Taxpayers are advised to review their digital transactions and ensure compliance with the new guidelines, which aim to level the playing field between domestic and foreign digital service providers. The BIR expects the circular to enhance tax collection from the rapidly growing digital economy.