RMC No. 91-2023: Circularizes the amendment to Rule 18, Section 5 of the Implementing Rules and Regulations (IRR) of RA No. 11534 (Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act)

Key points

1. Incentives that continue. Registered export and domestic enterprises that continue to avail of existing tax incentives may keep the duty exemption, VAT exemption on importation, and VAT zero-rating on local purchases in their IPA registrations.
2. Expired income tax incentives. Registered export enterprises under Section 293(E) whose income tax-based incentives have expired may keep VAT zero-rating on local purchases. This lasts until the Electronic Sales Reporting System under Section 237-A is fully operational, or the transitory period in Section 311(C) expires, whichever is earlier.
3. DMEs in zones. An RBE classified as a DME located inside the economic or freeport zone during the transitory period may register as a VAT taxpayer.
4. Attribution limit. The incentives apply only to goods and services directly attributable to and exclusively used in the registered project or activity of the registered export enterprises.
5. Prospective application. The Rules apply prospectively. DMEs inside the zone that opt to register as VAT taxpayers cannot claim VAT refund for transactions before the effectivity of the Rules.

Who is affected

• Registered export enterprises
• Registered domestic enterprises
• DMEs inside the economic or freeport zone

Deadlines and effectivity

• VAT zero-rating continues until the ESRS is fully operational or the transitory period expires, whichever is earlier
• Applies prospectively