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What You Need to Know About BIR RR 3-2025 and VAT on Digital Services

VAT on Digital Services

Starting February 1, 2025, the Bureau of Internal Revenue (BIR) began implementing Revenue Regulations No. 3-2025. This new rule affects digital services—especially those offered by companies based outside the Philippines. Here’s what it means in simple terms.

What is BIR RR 3-2025?

BIR RR 3-2025 puts a 12% Value-Added Tax (VAT) on digital services that are used in the Philippines. This applies to services provided by both local and foreign companies, especially those that deliver their services over the internet.

What Counts as a Digital Service?

Digital services include:

  • Cloud storage and tools (e.g., Google Workspace, Dropbox)

  • Online ads (e.g., Google Ads, Facebook Ads)

  • Streaming services

  • Software subscriptions (e.g., Canva, Microsoft 365)

  • Online marketplaces and platforms

  • Other tools accessed over the internet

If you’re using any of these for your business or personal use, the service provider may now charge 12% VAT on top of the usual price.

Does This Affect Oojeema Users?

If you’re a VAT-registered business:

  • You’re likely already familiar with VAT rules.

  • If you use services like Google Workspace, and the provider is BIR-registered, your invoice will now include 12% VAT.

  • You can record this VAT as an input tax (subject to usual VAT rules), which may help reduce your total VAT payable.


If you’re a non-VAT business or freelancer:

  • You’ll still pay the VAT on digital services, but you cannot claim input VAT.

  • This means your cost for some tools may increase slightly.


If you only use Oojeema and no other foreign digital tools:

  • No action needed. Oojeema is based in the Philippines and already includes VAT in your subscription.

What You Should Do

  • Check your invoices from foreign digital service providers. If they are now VAT-registered in the Philippines, you should see 12% VAT added.

  • If you’re a VAT-registered business, keep these invoices and record the input VAT.

  • Review your budget for digital tools—some monthly fees may go up due to the added VAT.

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