RR No. 26-2025: Extension of E-Invoicing Compliance
BIR Revenue Regulations No. 26-2025 amends the transitory provisions of RR No. 11-2025 to extend the deadline for covered taxpayers to comply with the issuance of electronic invoices until December 31, 2026. The extension is grounded on the operational adjustments needed—such as system reconfiguration and transition to e-invoicing—and applies to e-commerce taxpayers (small, medium, and large; micro are exempt), taxpayers under the Large Taxpayers Service, those classified as Large Taxpayers under RA 11976 and RR No. 8-2024, and taxpayers using CAS/CBA with e-invoicing and other invoicing software. The regulation also sets specific mandates once a BIR-ready system is established. At that point, specified sectors—including exporters; RBEs availing incentives under Section 304(D) (with noted exceptions); POS users; and other taxpayers as may be required—must issue electronic invoices and, separately, comply with the Electronic Sales Reporting System (ESRS) via future regulations. The Commissioner may further extend deadlines as needed; conflicting issuances are repealed; and the regulation takes effect immediately upon publication on the BIR website.
Amended CWT Rules for Top Withholding Agents under BIR RR No. 24-2025
BIR Revenue Regulations No. 24-2025 further amends Section 2.57.2(I) of RR No. 2-98 (as amended) to restate the creditable withholding tax (CWT) regime for "top withholding agents." Income payments by these agents—including non-resident aliens engaged in trade or business in the Philippines—to local/resident suppliers of goods and 2% CWT for services (items formerly under letters A and W). The regulation also sets a reduced 0.5% CWT for gross payments made to manufacturers and direct importers (individuals or corporations) of certain goods intended for wholesale: (a) motor vehicles in CBU/SKD form, including parts and accessories; (b) medicines/pharmaceutical products; and (c) solid or liquid fuels and related products. A repealing clause removes inconsistent issuances, and the regulation takes effect 15 days after publication in the Official Gazette or the BIR website, whichever comes first.
Revenue Regulations No. 03-2025: VAT Guidelines for Digital Services Under Republic Act No. 12023
Revenue Regulations No. 03-2025 issued by the Bureau of Internal Revenue (BIR) outlines the implementation of Republic Act No. 12023, which amends multiple sections of the National Internal Revenue Code to impose a 12% Value-Added Tax (VAT) on digital services. The regulation defines digital services broadly, covering platforms such as online marketplaces, streaming media, cloud computing, software, and virtual assets. Both resident and nonresident Digital Service Providers (DSPs) are affected, with clear distinctions between Business-to-Business (B2B) and Business-to-Consumer (B2C) transactions. Nonresident DSPs are required to register through the BIR's VAT on Digital Services (VDS) Portal, and they may appoint third-party representatives for tax compliance. VAT obligations differ depending on transaction type and residency status, with buyers often responsible for withholding VAT in B2C transactions involving nonresident DSPs. The regulations also establish protocols for invoicing, issuance, foreign currency conversion, filing returns, and claiming input tax. Notably, VAT exemptions apply to certain educational services and digital financial services by accredited institutions. Non-compliance may result in penalties, including business suspension and legal action under the BIR's RATE program. The BIR retains authority for audits and verification, including from third-party sources, to ensure accurate VAT reporting by nonresident DSPs. The rules take effect 15 days after publication, with a 60-day registration period and a 120-day window before full VAT application for newly covered entities.
