Steam Purchases in the Philippines to Be Subject to 12% VAT Starting June

Starting June 1, Filipino gamers will see an increase in the cost of purchasing video games on Steam as a 12% value-added tax (VAT) is officially implemented. This tax will be automatically included in the final price before checkout, affecting not just full game purchases but also in-game transactions and downloadable content (DLCs).

Steam, a leading digital distribution platform for PC games, confirmed the implementation of VAT for the Philippines through an announcement on its website. The change is part of the broader taxation policy outlined in Republic Act 12023, also known as the VAT on Digital Services Law.

The law, which was signed by President Ferdinand “Bongbong” Marcos Jr. on October 2, 2024, amends the National Internal Revenue Code of 1997 to ensure that digital transactions—including those from foreign digital service providers—are subject to VAT. This means that in addition to gaming platforms like Steam, other digital services such as Netflix, Spotify, Amazon, Disney+, and Lazada will also be affected by the new tax policy.

With the implementation of the 12% VAT, consumers will need to factor in additional costs for their digital purchases. For example, a game priced at P1,000 will now cost P1,120. The tax aims to align the Philippines’ digital economy with standard taxation policies while generating additional government revenue.

As the enforcement date approaches, both consumers and digital service providers are expected to make the necessary adjustments. The Bureau of Internal Revenue (BIR) will oversee compliance to ensure that the taxation is properly implemented across all relevant platforms.