It’s official: Netflix, Spotify subscriptions will be taxed

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It’s over

Per GMA News, the House of Ways and Means Panel has officially approved a bill calling for ‘digital service providers‘ such as Netflix, Spotify, Lazada, and more to be hit with a 12% VAT (value-added tax).

The still-unnumbered bill calls for non-resident foreign and local services to comply to remit VAT on their monetary transactions, such as in-app purchases and subscriptions.

spotify netflix VAT, <b> It&#8217;s official: Netflix, Spotify subscriptions will be taxed </b>
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‘Digital service providers from outside gain profit from our constituents but they don’t pay tax. This bill levels the playing field for local digital service providers,’ explained one of the measure’s authors, Deputy Speaker Sharon Garin.

The add VAT could also fund as much as PHP10 billion for the PH gov’t, per Finance Assistant Secretary Daki Napao.

Details are murky when the actual implementation will start, but based on the service’s current subscription rates, we might see the following new rates with the 12% VAT based on VAT Calculator PH:

NETFLIX

  • Mobile: PHP 149/month to PHP 169
  • Basic: PHP 369/month to PHP 413
  • Standard:PHP 459/month to PHP 514
  • Premium: PHP 549/month to PHP 614

SPOTIFY

  • Basic Premium: PHP 129/month to PHP 144
  • Premium Family: PHP 194/month to PHP 217
  • Student Premium: PHP 65/month to PHP 72