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The Bureau of Internal Revenue (BIR) said exporters can now get back the value-added tax (VAT) they paid on local purchases and imports, even while they wait for a government certificate confirming they qualify for tax-free treatment.
The BIR said Wednesday it issued Revenue Memorandum Circular No. 96-2026 on Sept. 7, laying out the rules.
BIR Commissioner Charlito Martin Mendoza said export-oriented enterprises received their VAT zero-rating certifications on different dates during the transition period.
“We are clarifying how VAT incurred while these certifications were being processed should be treated so qualified export-oriented enterprises will have a clear basis for their refund claims,” Mendoza said.
RMC No. 96-2026 amends the VAT refund guidelines under RMC No. 37-2025. It covers VAT incurred on local purchases and importations attributable to qualified zero-rated sales beginning Nov. 28, 2024 and before the enterprise received its DTI-Export Marketing Bureau certification, provided the certification was issued within the prescribed transition period ending December 31, 2025.
“Our objective is to ensure fair and consistent tax treatment for qualified export-oriented enterprises during the transition to the new zero-rating certification system. If they complied with the requirements and their certification was issued within the prescribed period, the VAT they properly incurred while waiting may be refunded in accordance with the law,” Mendoza said.
The refund remains subject to the requirements under Section 112 of the National Internal Revenue Code, as amended, including proper substantiation and proof that the input VAT is directly attributable to qualified zero-rated sales. The BIR said VAT that has already been reimbursed, credited, adjusted, recovered from suppliers or otherwise utilized may not be the subject of a VAT refund claim.
Export-oriented enterprises that attained the 70-percent export threshold from the preceding taxable year but failed to secure the required DTI-Export Marketing Bureau VAT zero-rating certification, including during the transition period, are not entitled to a VAT refund covering the immediately succeeding year. Unused input VAT, however, may be carried forward to subsequent taxable quarters and utilized against future VAT liabilities in accordance with existing tax rules.
The BIR said the issuance supports its continuing efforts to make tax administration clearer and more predictable for businesses, in line with President Ferdinand Marcos Jr.’s direction to improve the business environment and Finance Secretary Frederick Go’s push for reforms that support compliance, investment and ease of doing business. — Thony Rose Lesaca
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