RMC No. 80-2023: Clarifies issues relative to the implementation of Revenue Regulations No. 3-2023 and other related concerns on Value-Added Tax (VAT) zero-rate transactions on local purchases of the Registered Export Enterprises (REEs) and other entities granted with VAT zero-rate incentives under special laws and international agreements

Key points

1. No prior BIR approval. RR No. 3-2023 was published on April 28, 2023 and took effect that day. From then, local suppliers of REEs no longer need prior BIR approval for VAT zero-rate.
2. Qualifying purchases. A local purchase must be directly and exclusively used in the registered project or activity and must not fall in the negative list in RR No. 3-2023. The Investment Promotion Agency issues a VAT Zero-Rate Certificate, subject to BIR post audit, and the REE-buyer gives its supplier certified copies of the certificate, Certificates of Registration and a sworn affidavit.
3. Pending and disapproved applications. Applications with an IPA certificate received before RR No. 3-2023 took effect but not yet acted on get zero-rating from the date of filing, subject to post audit. A sale without an approved application, or one previously disapproved, is subject to twelve percent (12%) VAT.
4. HMO plans. VAT zero-rating does not cover HMO plans for employees’ dependents or for employees not directly involved in the registered project or activity. Suppliers must still require the REE-buyer to give the information in Annex A of RMC No. 137-2022.
5. Other entities under special laws. These suppliers need not apply for VAT zero-rate and instead require documents from the buyer. A supplier of a Renewable Energy Developer requires COR copies from the BIR, BOI and DOE, and others require a VAT Exemption Certificate or Ruling or equivalent.
6. IPA endorsement to BIR. The IPA sends the Annex C VAT Zero-Rate endorsement template in softcopy to aiteid_ies@bir.gov.ph. It is due within twenty (20) days following the close of each taxable quarter.

Who is affected

• Registered Export Enterprises and their local suppliers
• Investment Promotion Agencies
• Renewable Energy Developers and their suppliers
• Other entities with VAT zero-rate incentives under special laws and international agreements

Deadlines and effectivity

• RR No. 3-2023 effective April 28, 2023
• IPA endorsement due within twenty (20) days after each taxable quarter