Section 3Sec./Art. 3

A new section designated as Section 108-A under Chapter I, Title IV, of the National Internal Revenue Code of 1997, as amended, is hereby inserted to read as follows:

"Section 108-A. Liability of Persons Providing Digital Services. - The digital service provider, whether resident or nonresident, shall be liable for assessing, collecting, and remitting the value-added tax on the digital services consumed in the Philippines, subject to the provision on withholding of value-added tax on digital services under Section 114(D).

"When used in this title:

"(a) The term 'digital service' shall refer to any service that is supplied over the internet or other electronic network with the use of information technology and where the supply of the service is essentially automated. Digital services shal include:

"(1) Online search engine;

"(2) Online marketplace or e-marketplace;

"(3) Cloud service;

"(4) Online media and advertising;

"(5) Online platform; or

"(6) Digital goods.

"(B) The term 'digital service provider' refers to a rsident or nonresident supplier of digital services to a consumer who uses digital services subject to value-added tax in the Philippines.

"(C) The term 'nonresident digital service provider' means a digital service provider that has no physical presence in the Philippines."