06:26 AM EDT, 10/02/2024 (MT Newswires) -- Philippine President Ferdinand Marcos Jr. on Wednesday signed a law mandating a 12% value-added tax on foreign digital services consumed in the country such as streaming services from Netflix ( NFLX ) , Warner Bros. Discovery's ( WBD ) HBO and Disney ( DIS ) .

Digital services covered in the law include online search engines, marketplaces, cloud services, media, advertising, and digital goods, according to the country's Department of Finance. Online educational services are exempted from VAT.

"If you are reaping the rewards of a fruitful digital economy here, it is only right that you contribute also to its growth," Marcos said in a speech, noting that only local digital service providers were subject to the 12% VAT prior to the signing.

Foreign DSPs with gross sales exceeding 3 million Philippine pesos ($53,379.84) over the past year are subject to VAT, the DOF said, adding that it expects to generate revenue of about 102.12 billion pesos over the next five years from the measure.

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