Philippines VAT Requirements

VAT in the Philippines

There have been improvements in recent years to VAT revenue collection in the Philippines, but there are a considerable number of exemptions from the country’s 12% VAT rate.

After receiving funding from South Korea to investigate and adopt a CTC e-invoicing regime, the Philippines is expected to roll out a phased VAT control reform over the coming years.

Get the information you need

CTC reforms

In 2018, the Philippines launched the Tax Reform for Acceleration and Inclusion (TRAIN), which included several tax reform proposals.

The TRAIN proposals included the requirement for large taxable persons who were engaged in e-commerce or export to issue e-invoices, e-receipts and to report sales data to the country’s tax administration, the Bureau of Internal Revenue (BIR).

Quick facts

  • In July 2022, the Department of Finance (DOF) intends to launch a CTC e-reporting system pilot program covering B2B invoicing and B2C receipts per the TRAIN law mandate. By this date, the 100 largest taxpayers in the country must be live with the system.
  • E-invoice data must be reported in JSON format and contain the issuer’s electronic signature.
  • All e-invoice data and e-receipts must be transmitted to the tax authority’s invoice system (EIS) either immediately after issuance or in a batch submission once per day (near real-time).
  • E-invoice data reporting and e-receipt reporting can be done either through dedicated APIs or through the BIR’s web portal.
  • Suppliers can deliver invoices to customers electronically via email in PDF format or as a hard copy.
  • E-invoices must be archived for 10 years.

Mandate rollout dates

2018 – TRAIN law was introduced.

End of January 2022 – Pilot program environment was made available to eligible taxpayers to establish test connectivity and verify file formats.

April 2022 – Six pilot companies will test the system end-to-end by transmitting e-invoices to the EIS.

July 2022 – 100 pilot taxpayers, including the initial six will have to report all their invoicing data to the EIS through the new system.

How can Sovos help?

Do you need help ensuring your business stays compliant with the upcoming e-invoicing obligations in the Philippines?

Sovos already provides early adopters with a solution connected to the Philippines Tax Authority Platform and helps other taxpayers prepare for the extended rollout of the CTC e-reporting system.

Learn how Sovos’ solution for VAT compliance changes in the Philippines can help your business stay compliant.