Non-Resident Digital Service Provider BIR Registration: A Step-by-Step Guide

Non-resident digital service providers (DSPs) — foreign suppliers of digital services consumed in the Philippines — must register with the Bureau of Internal Revenue through the VAT on Digital Services (VDS) Portal, as required by Section 5(B) of Revenue Regulations No. 3-2025. Registration is done within the period prescribed under the Tax Code, and a non-resident DSP need not have a local representative in the Philippines to register. Once registered, the DSP receives a Certificate of Registration bearing its assigned Taxpayer Identification Number (TIN) and type of registration, which it uses in all transactions involving digital services consumed or used in the Philippines.

Who must register as a non-resident DSP

A DSP is a resident or non-resident supplier of digital services to a buyer who uses digital services subject to VAT in the Philippines. A non-resident DSP is one that has no physical presence in the Philippines.

Digital services are services supplied over the internet or other electronic network using information technology, where the supply is essentially automated. Under Section 3(A) of RR No. 3-2025, these include online search engines, online marketplaces or e-marketplaces, cloud services, online media and advertising, online platforms, and digital goods. Digital goods are intangible goods delivered or transferred in digital form — sounds, images, data, facts, or combinations of these — such as music, videos, software, applications, digital media, e-games, and online courses.

Step-by-step BIR registration for non-resident DSPs

1. Confirm coverage. Registration applies if the DSP, in the course of trade or business, supplies or delivers digital services in the Philippines, whether to business buyers (B2B) or consumers (B2C). Digital services are considered consumed in the Philippines if the buyer is located in the Philippines.
2. Register through the VDS Portal. Under Section 5(B) of RR No. 3-2025, non-resident DSPs register with the BIR through the VDS Portal and submit the prescribed information there.
3. Decide whether to appoint a resident third-party service provider. This is optional. A non-resident DSP may appoint a resident third-party service provider — an individual or entity such as a law firm, accounting firm, or consultancy firm — for receiving notices, record keeping, filing tax returns, and other reporting obligations. If it does so, it must notify the BIR in writing within thirty (30) calendar days from the date of appointment. The appointment does not classify the non-resident DSP as a non-resident foreign corporation doing business in the Philippines for VAT purposes.
4. Obtain the Certificate of Registration. The BIR issues a Certificate of Registration containing the assigned TIN and type of registration.
5. Comply with invoicing and filing rules. Non-resident VAT-registered DSPs must indicate specified information on their invoices — identification of the buyer including the TIN, if any; transaction reference number; date of the transaction; the total amount with an indication that it includes VAT; and a brief description of the transaction. Invoices may be electronic and need not be registered with the BIR, provided the contents are in English or include an English translation and all required information is present. No Authority to Print is required.

How VAT applies to non-resident DSPs

Under Section 4 of RR No. 3-2025, VAT of twelve percent (12%) is levied on the gross sales derived by a DSP from its sale or exchange of services in the Philippines. Digital services provided by a non-resident DSP are considered performed, rendered, supplied, or delivered in the Philippines if consumed in the Philippines — that is, if the buyer is located in the Philippines.

For B2B transactions, the persons engaged in business located in the Philippines (including the Government and GOCCs) are liable to withhold and remit the 12% VAT on their purchase of digital services consumed in the Philippines, within ten (10) days following the end of the month the withholding was made, under the reverse charge mechanism.

For B2C transactions, the non-resident VAT-registered DSP is directly liable to electronically file the VAT return and pay the VAT due through the simplified pay-only regime in the VDS Portal, based on gross sales relating to digital services consumed or used in the Philippines, within twenty-five (25) days following the close of each taxable quarter. A non-resident DSP may choose to pay monthly, but must still file the quarterly return and pay the corresponding VAT liabilities.

Consequences of failing to register

Under Section 12 of RR No. 3-2025, the Commissioner of Internal Revenue or a duly authorized representative may issue a Closure or Take Down Order against a DSP that fails to register its business with the BIR or comply with the Regulations. The order includes the blocking of digital services performed or rendered in the Philippines by the DSP, implemented by the Department of Information and Communications Technology through the National Telecommunications Commission. Violations are also subject to penalties and to criminal, civil, and administrative charges under the Tax Code.

Frequently asked questions

Does a non-resident DSP need a local representative to register with the BIR? No. Under Section 5(B) of RR No. 3-2025, a non-resident DSP need not have a local representative in the Philippines to register. It may, however, voluntarily appoint a resident third-party service provider and must notify the BIR in writing within thirty (30) calendar days from the appointment.

How does a non-resident DSP pay VAT on sales to Philippine consumers? In B2C transactions, the non-resident VAT-registered DSP files the VAT return and pays the VAT due through the simplified pay-only regime in the VDS Portal within twenty-five (25) days following the close of each taxable quarter.

What happens if a non-resident DSP does not register? The BIR may issue a Closure or Take Down Order, which includes blocking the DSP's digital services in the Philippines, and may impose penalties and file administrative and criminal charges.

Practical takeaways

• Non-resident DSPs register with the BIR through the VDS Portal under Section 5(B) of RR No. 3-2025 — no local representative is required.
• Appointing a resident third-party service provider is optional, but the BIR must be notified in writing within thirty (30) calendar days from appointment.
• In B2B transactions, the Philippine business buyer withholds and remits the 12% VAT; in B2C transactions, the non-resident DSP files and pays through the VDS Portal.
• Non-resident VAT-registered DSPs cannot claim creditable input tax.
• Failure to register can lead to a Closure or Take Down Order and blocking of digital services in the Philippines.

Primary sources

The rules discussed above are drawn from the following issuances, embedded here in full for your reference.

INFINITY8NETWORKS DIGITAL SERVICES OPC and INFINITY8NETWORKSOpen in Law LibraryDownload PDF

RR No. 3-2025 — Prescribing policies and guidelines for the implementation of Republic Act No. 12023 entitled "An Act Amending Sections 105, 108, 109, 110, 113, 114, 115, 128, 236 and 288 and Adding New Sections 108-A and 108-B of the National Internal Revenue Code of 1997, as Amended," Imposing the Value-Added Tax on Digital Services. (Date Posted: January 17, 2025)Open in Law LibraryDownload PDF

RMC No. 62-2005 — Prescribes the guidelines in the form of basic questions and answers regarding the registration and invoicing requirements including clarification on common issues affecting Value-Added Tax taxpayers Digest | Full TextOpen in Law LibraryDownload PDF

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.