If you’ve noticed your Netflix bill looking a little higher lately — you’re not imagining things. Yes, Netflix and other digital services are now subject to VAT (Value-Added Tax) in the Philippines.
As the government adapts to the growing digital economy, foreign digital service providers are now required to pay their share of taxes. Here’s what this means for subscribers, freelancers, and businesses alike.
Why Is Netflix Charging VAT?
Under the Expanded VAT on Digital Services Law, which took effect in the Philippines in recent years, non-resident digital service providers (DSPs) — like Netflix, Spotify, Meta, Google, and others — are now required to register with the Bureau of Internal Revenue (BIR) and charge 12% VAT to Philippine customers.
The goal? Level the playing field between local and foreign businesses and boost government revenue from the fast-growing digital economy.
How VAT Appears on Your Netflix Bill
As of 2025, Netflix now includes 12% VAT on top of your subscription price. Here’s a quick example:
These prices are reflected in your billing statement — whether you pay through a credit card, GCash, or mobile load.
Who Is Affected?
● Regular Netflix Subscribers: If you’re using Netflix for personal entertainment, you’ll simply see VAT included in your bill moving forward. There’s no need to file anything — Netflix handles the tax remittance.
● Freelancers or Businesses: If you use Netflix or similar platforms for business purposes (e.g., media, marketing, or research), and you’re VAT-registered, you may be able to claim input VAT — but only if the provider is BIR-registered and issues valid receipts.
As of now, most foreign DSPs are not able to issue official BIR-registered receipts, so you likely won’t be able to claim these as valid input VAT yet. But this could change in the future as more platforms comply with local rules.
Does Netflix Need to Register With the BIR?
Yes — as per BIR rules, non-resident DSPs earning income from Philippine users must register for VAT and file returns regularly. This includes platforms like:
● Netflix
● Spotify
● YouTube Premium
● Google (for ads and cloud services)
● Facebook/Meta (for ads)
This ensures they remit the correct VAT to the Philippine government, even if they don’t have a physical office in the country.
What Does This Mean for You?
● As a consumer: Expect slightly higher monthly bills, but no action is required on your part.
● As a business owner or freelancer: Stay updated on which foreign platforms are VAT-compliant — this matters for proper bookkeeping and VAT claims.
● As a taxpayer: This move is part of a broader push to modernize tax collection and include digital services in the formal tax net.
Final Thoughts
As digital platforms become essential in both work and life, governments like the Philippines are making sure they contribute their fair share in taxes — and Netflix is just one of many. While it may mean a small increase in what you pay, it also means more formal systems, clearer billing, and potentially better local services in the long run.
Not sure how digital VAT affects your business or freelance work? Happy Hive Inc. can help with tax advice and compliance support, so you stay on track in today’s digital world.
Book your FREE consultation here:
Let’s talk — we’ll help you stay compliant (without losing your chill).