VAT on a streaming subscription comes off before royalties are split, so when the Philippines added 12 percent in June 2025, every Spotify peso shrank first.
VAT means value-added tax, the consumption tax a platform collects from subscribers and passes to the government. Vietnam doubled its rate on foreign platforms the same summer. Neither shows up as a line on a typical artist statement.
Tax first, then the split
The UK Parliament’s culture committee set out the order in its 2021 report on the economics of music streaming. The government takes its VAT first. What remains is the gross revenue pot, of which the platform keeps roughly 30 percent, master rightsholders roughly 55 percent and song rightsholders roughly 15 percent.
So a tax change moves the pot before any contract does. Spotify’s Philippine support page confirms that, where applicable, the Premium price includes VAT.
The Philippines: from 0 to 12 percent
Republic Act 12023 applies 12 percent VAT to digital services. Non-resident providers had to start charging it on 2 June 2025, per a BusinessWorld tax column.
Spotify’s Philippine page still listed Premium Individual at ₱149 a month on 18 June 2025, according to the Wayback Machine. In August, Spotify moved it to ₱169, citing product innovation, as Melanie Uson reported for PhilSTAR Life.
- Before 2 June 2025: ₱149, no VAT, so ₱149 to split.
- From 2 June until the new price reached each account: ₱149 including VAT, so ₱133.04 to split, 10.7 percent less.
- After the rise: ₱169 including VAT, so ₱150.89 to split.
The sticker price rose 13.4 percent. The pot per subscriber rose 1.3 percent. Measured against the pre-tax price, ₱18.11 of the extra ₱20 is VAT.
Vietnam: from 5 to 10 percent
From 1 July 2025, VAT on services sold by foreign platforms without a permanent establishment in Vietnam rose from 5 to 10 percent, per PwC’s Vietnam tax summary. On 21 August 2025, Apple adjusted App Store developer proceeds in Vietnam and the Philippines for these same two changes.
Spotify raised Vietnam’s Premium Individual price from ₫59,000 to ₫65,000 from September billing, VietNamNet reported. Net of tax, that is roughly ₫56,000 before July 2025 and roughly ₫59,000 after: about a 5 percent gain on a 10.2 percent sticker rise.
In July and August, existing subscribers paid the old price at the new rate, leaving roughly 5 percent less to split.
What 100 units of a subscription leaves to split
| Market | Tax on a consumer subscription | Left to split per 100 paid |
|---|---|---|
| Philippines | 12% VAT, since 2 June 2025 | 89.3 |
| Indonesia | 12% VAT on an 11/12 base, effectively 11% | 90.1 |
| Vietnam | 10% VAT on foreign platforms, since 1 July 2025 | 90.9 |
| Singapore | 9% GST (goods and services tax) | 91.7 |
| Malaysia | 8% service tax on foreign digital services, since 1 March 2024 | 92.6 |
| Thailand | 7% VAT, cut from 10% until 30 September 2027 | 93.5 |
Sources: PwC tax summaries for Indonesia, Singapore and Thailand; the Royal Malaysian Customs Department.
If Thailand’s 7 percent rate lapses and its THB 149 Premium price holds, each Thai subscriber leaves about 2.7 percent less to split.
What to do with this
- Re-read June to September 2025. Compare Philippine revenue per 1,000 streams in those months with the spring. Part of any dip can be tax, not your distributor or a fraud filter.
- Discount every price-rise headline. Divide the new price by one plus the new tax rate, divide the old price by one plus the old rate, then compare.
- Forecast on the net column. Budget Southeast Asian growth on what is left, not the sticker.
- Track tax dates like release dates. Thailand’s 30 September 2027 is the next one on the list.
- Ask for store, territory and month reporting. A single monthly total hides every effect above. Make it the first question for any distributor.
The 2026 price rises happened elsewhere, as we found when four streaming services raised prices in the same handful of countries. On the artist’s own tax bill, see Vietnam’s VND20 million royalty allowance; on the market itself, how the Philippines grew 17.9 percent and why its songwriter royalties are four-fifths digital.
