RMC No. 21-2024: Clarification on the answer to Question No. 31 of Revenue Memorandum Circular No. 49-2022 in relation to Revenue Regulations No. 4-2022, implementing Section 295(F) of the National Internal Revenue Code (Tax Code) of 1997, as amended by Republic Act No. 11534, otherwise known as the Corporate Recovery and Tax Incentives for Enterprises Act or CREATE Act

Key points

1. Earlier rule. The answer in Q&A No. 31 of RMC No. 49-2022 required certain Registered Export Enterprises (REE) to change from VAT-registered to non-VAT. Some petroleum importers in freeport zones or special economic zones with no other activities beyond those registered with the IPA made the change to avail of the 5% GIT or SCIT regime.
2. Reason for the clarification. Under Section 295(F), petroleum importers, including those in freeport zones or special economic zones, pay applicable duties and taxes including VAT on import and may be refunded for export or tax-exempt sales under RR No. 4-2022. Under Section 112(A), only VAT-registered persons may file for a VAT refund.
3. New clarification. REEs under the 5% GIT or SCIT in freeport zones or special economic zones that directly import petroleum products and have no other VAT activities may register as VAT taxpayers. This lets them claim refunds of input VAT on petroleum importation attributable to zero-rated sales under RR No. 4-2022.
4. Prospective application. The Circular applies prospectively. Earlier VAT to non-VAT changes made under RMC No. 49-2022 are not covered.

Who is affected

• Registered Export Enterprises in freeport zones or special economic zones that directly import petroleum products

Deadlines and effectivity

• Applies prospectively