RR No. 13-2023: Prescribes the policies and guidelines for the optional VAT-Registration of Registered Business Enterprises classified as Domestic Market Enterprise under the 5% tax on Gross Income earned in lieu of all taxes regime during the transitory period pursuant to Rule 18, Section 5 of the amended IRRs of Republic Act No. 11534 (CREATE Act)

Key points

1. Who may register. A DME located inside the Economic or Freeport Zone may keep the 5% GIE incentive during the ten (10) year transitory period under Section 311 (C) of the CREATE Act and register as a VAT taxpayer. It first needs an IPA Certification that expressly states the 5% GIE is in lieu of all taxes except VAT.
2. Documents for the IPA. The RBE submits a request letter stating its intention to register as a VAT taxpayer, a notarized “Deed of Waiver of Right to Avail of the VAT Exemption Incentive” in the prescribed form, and other documents the IPA may prescribe.
3. Waiver and registration update. The waiver is irrevocable from the time it is made and binds the RBE for the remaining transitory period. Non-VAT RBEs with the Certification update their RDO registration to VAT taxpayer and are treated on par with regular corporations for VAT imposition and compliance.
4. IPA list to the BIR. The IPA gives the BIR Assessment Service, Attention: AITEID, a list of RBEs issued the Certification within twenty (20) days following the close of each taxable quarter. The Commissioner may prescribe a report template in a separate issuance.
5. Prospective application and refunds. The Regulations apply prospectively under Section 3 of the amended CREATE IRR. DMEs that opt to register as VAT taxpayers cannot claim VAT refund for transactions before the effectivity of the amended IRR of CREATE.

Who is affected

• Registered Business Enterprises classified as Domestic Market Enterprises inside the Economic or Freeport Zone
• Investment Promotion Agencies

Deadlines and effectivity

• Transitory period: ten (10) years under Section 311 (C) of the CREATE Act
• IPA list due within twenty (20) days following the close of each taxable quarter
• Applies prospectively