04:05 APAC
Asia Briefing from Dezan Shira & Associates
Philippines In the Philippines, VAT is a major source of revenue and an essential consideration for businesses. Foreign investors must understand how VAT works in the Philippines and appreciate that context is crucial for maintaining compliance, optimising operations, and managing tax risks. Foreign businesses operating in the country must register for VAT if their annual gross sales or receipts exceed PHP 3 million. Voluntary registration is also an option for those below this threshold, allowing them to claim input VAT credits.
VAT applies to various transactions, including sales, exchanges, leases, and certain deemed sales like business retirements or inventory transfers. Crucially, foreign digital service providers catering to Philippine customers are now required to register for VAT and remit taxes, following recent clarifications by the Bureau of Internal Revenue. Certain transactions are exempt from VAT to support social welfare and essential sectors. ASEAN Briefing provides a guide to help foreign investors understand the Philippine VAT framework.
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GLOBAL PAYROLL MAGAZINE ISSUE 11
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