MANILA, Philippines – Movie streaming platform Netflix announced that it will increase its subscription rates starting June 1 as the law imposing value-added tax on foreign digital service providers and other foreign tech firms providing services in the Philippines will take effect.
The Value-Added Tax on Digital Services Law (RA No. 12023) was signed by President Ferdinand Marcos, Jr. on October 2024, with the aim of “bridging the gap brought about by the rapid change in the digital world,” according to Malacanang.
“With this law, we say that if your presence in the Philippine market is as real as your profits, then your tax responsibilities should also be equally tangible,” the President said.
“But make no mistake, we are not imposing new taxes, we are simply strengthening the authority and streamlining the process of the BIR to collect value-added tax on digital services,” he added.
Netflix Philippines has already updated its subscription plans on its website on Tuesday. The new plan prices are as follows:
Mobile - PHP169/month (previously PHP149)
Basic - PHP279/month (previously PHP249)
Standard - PHP449/month (previously PHP399)
Premium - PHP619/month (previously PHP549)
Additional member slots for Standard and Premium subscribers are now at PHP169/month, previously PHP149.
Other digital platforms and digital services providers (DSPs) are expected to announce their new rates in the coming days nearing the implementation of the law.
According to the Presidential Communications Office (PCO), the Value-Added Tax on Digital Services Law strengthens and streamlines the authority of the Bureau of Internal Revenue (BIR) to collect VAT on digital services, including digital media, digital music, digital video games, video-on-demand, and digital ads.
It covers digital platforms such as Netflix, Spotify, Amazon and Lazada, among other digital service providers (DSPs), the PCO said.
“Local business and international digital platforms now compete on equal terms. We no longer will be playing by different sets of rules. If you are reaping the rewards of a fruitful digital economy here, it is only right that you contribute also to its growth,” President Marcos said.
“After all, whether you are a small tech start-up or a global tech giant based halfway around the world, if you are making money here in the Philippines, you are part of our community. And with that comes a shared responsibility,” the President added.
Meanwhile, the PCO reiterated that there are exemptions from the law, such as digital educational services, including online courses and webinars offered by private institutions and the sale of online subscription-based services to educational institutions recognized by government agencies.
Among these institutions are the Department of Education (DepEd), the Commission on Higher Education (CHED) and state universities and colleges, the PCO mentioned.
Under the law, the BIR Commissioner has the authority to suspend the business operations of non-compliant taxpayers, including the blocking of digital services of non-compliant service providers.
The law will be implemented by the Department of Information and Communications Technology (DICT) through the National Telecommunications Commission (NTC), the PCO stated.
