RR No. 1-2021: Implements the tax incentives and fee privileges for the procurement, importation, donation, storage, transport, deployment and administration of the COVID-19 vaccines under RA No. 11525 (COVID-19 Vaccination Program Act of 2021)

Key points

1. Exemptions. From January 1, 2021 and during the state of calamity under Proclamation No. 1021, these activities under the COVID-19 Vaccination Program are exempt from VAT, Excise Tax, Donor’s Tax and other fees. This applies to the National Government (through the DOH and the National Task Force Against COVID-19), political subdivisions, and private entities and international humanitarian organizations such as the Philippine Red Cross.
2. Procurement, importation and services. No VAT applies to procurement, so VAT is not part of the contract price. No VAT or Excise Tax applies to importation, which needs no Authority to Release Imported Goods (ATRIG) under RMO No. 35-2002, as amended, though the BIR may conduct post investigation or audit. Service providers charge no VAT on storage, transport, deployment and administration services.
3. Donations and condition. No Donor’s Tax applies to donations of the vaccines to these entities, subject to the ordinary rules of deductibility under Section 34(H) of the NIRC. The incentives apply only if the vaccines are not for resale or other commercial use and are given free to persons vaccinated.
4. Documents to present. Entities present a certified true copy of the procurement or multi-party agreement, the FDA Certificate of Product Registration or Emergency Use Authorization, and a Sworn Declaration of no resale or commercial use. For donated vaccines, a certified true copy of the accepted Deed of Donation is needed, and private entities and humanitarian organizations may instead or also present BIR Form No. 2322 (Certificate of Donation).
5. Refund of taxes paid. VAT, Excise Tax and Donor’s Tax paid on covered transactions from January 1, 2021 until effectivity are refunded under Section 204(C) of the Tax Code. For VAT, the input tax must not have been claimed as input tax credit, and it is not allowed as such under Section 110.

Who is affected

• National Government through the DOH and National Task Force Against COVID-19
• Political subdivisions
• Private entities and international humanitarian organizations
• Service providers for storage, transport, deployment and administration

Deadlines and effectivity

• Effective January 1, 2021
• In force during the state of calamity under Proclamation No. 1021 dated September 16, 2020