Starting June 1, 2025, the Philippines will charge a 12% VAT on digital services provided by foreign companies.

The bottom line: The tax will apply regardless of whether a digital service provider has a physical presence in the Philippines. Foreign digital service providers earning over PHP 3 million must register with the Philippine tax authority by April 2, 2025 to comply.

Starting January 1, 2025, the VAT registration threshold in Ireland will increase from €80,000 to €85,000 for goods and from €40,000 to €42,500 for services.

The bottom line: These threshold hikes aim to ensure small businesses remain below the threshold and do not have to register.

South Africa is considering removing the requirement for foreign digital service providers to charge VAT on B2B transactions. Under the proposed change, effective April 1, 2025, South African businesses would become responsible for self-reporting VAT through a reverse charge mechanism.

The bottom line: This change would eliminate the need for non-resident companies selling digital services exclusively to South African businesses to maintain VAT registration in the country. Currently, South Africa requires VAT on foreign digital services for both B2C and B2B transactions.

Mexico now requires foreign digital service providers to meet two new registration conditions: 1) Legal documents must explicitly state their primary business activity is offering services through a technological platform, and 2) companies must submit a legal representative-signed affidavit detailing their services, website, and main business address.

The bottom line: The registration process for digital service providers operating in Mexico will become more complicated. New registrants should carefully check and potentially update their paperwork to meet these new requirements.

The New York State Division of Tax Appeals concluded the sale of software-as-a-service and managed services is taxable as the sale of prewritten software. Prewritten software, when sold together with the companies‘ services, is significant enough to be considered taxable.

The bottom line: Businesses should pay close attention to how they market, sell, and price their services in New York State, especially if they are offering services along with software. Some businesses will want to consider unbundling and charge separately for otherwise non-taxable services and software licensing to avoid tax exposure.

Foreign companies providing digital services in Senegal must register for VAT starting July 1, 2024—a deadline extended from the original April 2024 date. For business-to-business (B2B) transactions, the responsibility shifts to the Senegalese business customer, who must self-report and pay the VAT through the reverse charge mechanism.

The bottom line: International digital service providers need to prepare for VAT registration if serving Senegalese consumers, while Senegalese businesses should ensure their accounting systems are ready to handle VAT on foreign digital purchases.