New 12% VAT on Facebook Ads in the Philippines Starts June 2025

Starting June 2, 2025, Facebook ads in the Philippines will be slapped with a 12% Value Added Tax (VAT). This new rule applies to anyone whose billing information on Facebook shows that their country is the Philippines. Whether you’re running ads for your business or just promoting a personal page, you’ll feel the impact if your account is set to the Philippines.

If you’re a business owner, you’ll need to pay attention to your payment settings. Meta is now asking advertisers to include their Taxpayer Identification Number (TIN), especially if you’re officially doing business in the Philippines. Adding your TIN basically tells Meta you’re a legit business operating under Philippine law. Once it’s added, your TIN will also appear on your Facebook ad invoices.

Now here’s where it gets tricky. If you're VAT-registered and you’ve submitted your TIN, Meta won’t add the 12% VAT to your bill directly. Instead, you’ll be in charge of reporting and paying that tax to the Bureau of Internal Revenue (BIR) yourself. This is called a “reverse charge,” and it means you’re responsible for filing BIR Form 1600-VT and paying the VAT. On the bright side, if you follow BIR’s conditions, you might be able to claim the VAT you paid as input tax credit.

However, if you're not VAT-registered, Meta will simply tack on the 12% VAT to your ad charges. That means more out-of-pocket expenses, not exactly great news for small business owners or casual advertisers. And since VAT is added on top of your ad spend, you might end up paying more than your usual billing threshold without actually reaching it faster.

Manual payments are also affected. If you load up your ad account with a certain amount, that amount will already include the VAT. So let’s say you fund your account with ₱1,000, a chunk of that goes straight to VAT, leaving you with a smaller budget for your actual ads.

Personally, I’m not a fan of this new 12% digital service tax. It may seem like a small percentage, but it adds up fast, especially for everyday users and businesses trying to stretch every peso. Services like Steam and Netflix have already increased their prices because of the same VAT law, and now it’s Facebook ads’ turn.

This move is part of the government’s effort to regulate and collect taxes from the growing digital economy. While I understand the need for revenue, it’s frustrating to see how it hits consumers the hardest. Digital marketing is no longer just for big companies. Many small businesses rely on Facebook ads because they're affordable and effective. A 12% hike could change that, and not for the better.

(image via decodetech)