Manila: Qualified export-oriented enterprises (EOEs) may claim refunds on value-added tax (VAT) paid on eligible local purchases and importations while waiting for the issuance of their Department of Trade and Industry-Export Marketing Bureau (DTI-EMB) VAT zero-rating certifications during the transitory period, the Bureau of Internal Revenue (BIR) said on Wednesday.

According to Philippines News Agency, the BIR issued a Revenue Memorandum Circular (RMC) on September 7, amending the VAT refund guidelines under RMC 37-2025. This adjustment covers VAT incurred on local purchases and importations attributable to qualified zero-rated sales beginning November 28, 2024, and before the enterprise received its DTI-EMB certification, provided that the certification was issued within the prescribed transition period ending December 31, 2025.

The BIR's issuance supports its ongoing efforts to make tax administration clearer and more predictable for businesses, aligning with President Ferdinand R. Marcos Jr.'s direction to improve the business environment. BIR Commissioner Charlito Mendoza explained that the new guidelines aim to clarify how VAT incurred during the processing of certifications should be treated, providing a clear basis for refund claims by qualified export-oriented enterprises.

Mendoza emphasized the BIR's commitment to keeping tax treatment fair and consistent for qualified export businesses as they transition to the new zero-rating certification system. He noted that if enterprises complied with the requirements and their certification was issued within the prescribed period, the VAT incurred while waiting may be refunded in accordance with the law.

Despite the new guidelines, the BIR clarified that the refund is still subject to the requirements under Section 112 of the National Internal Revenue Code. Proper substantiation and proof that the input VAT is directly attributable to qualified zero-rated sales are still necessary. VAT that has already been reimbursed, credited, adjusted, recovered from suppliers, or otherwise utilized may not be the subject of a VAT refund claim.

Furthermore, EOEs that attained the 70 percent export threshold from the preceding taxable year but failed to secure the required DTI-EMB VAT zero-rating certification, including during the transition period, are not entitled to a VAT refund covering the immediately succeeding year. However, the BIR stated that any unused input VAT may be carried forward to subsequent taxable quarters and utilized against future VAT liabilities in accordance with existing tax rules.