RMC No. 135-2024: Circularizing Republic Act No. 12066, titled “An Act Amending Sections 27, 28, 32, 34, 57, 106, 108, 109, 112, 135, 237, 237-A, 269, 292, 293, 294, 295, 296, 297, 300, 301, 308, 309, 310, And 311, and Adding New Sections 135-A, 295-A, 296-A, and 297-A of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes”

Key points

1. Sections amended. The amended sections include 27 and 28 (income tax rates), 32 (gross income, including income exempt under treaty), 34 (deductions), 57 (withholding), and 106, 108, 109 and 112 (VAT). They also include 135 (petroleum products), 237 and 237-A (invoices and electronic sales reporting), 269, 292 to 297, 300, 301 and 308 to 311.
2. New sections. New Section 135-A covers refund of excise tax on petroleum products. Section 295-A covers Registered Business Enterprises Taxpayer Service. Section 296-A covers the period of availment of incentives for projects approved by the Fiscal Incentives Review Board. Section 297-A covers processing of tax incentive applications.
3. Electronic VAT refund. The Secretary of Finance shall immediately include in the Department’s program the operationalization of electronic processing of the VAT refund system. Funding is included in the annual General Appropriations Act.
4. Prospective provisions. These apply prospectively to projects granted incentives under RA No. 11534 upon effectivity of the Act: the exemption from national and local taxes under Section 294(B) for SCIT projects, the additional enhanced deductions under Section 294(C)(6) to (9), and the twenty percent (20%) income tax rate on RBEs under the enhanced deduction regime. They also cover the RBE local tax under Section 294(F) for RBEs availing ITH or EDR, and the conditions for duty and VAT exemption on importation and VAT zero-rating on local purchases under Sections 295(C) and (D).
5. No refund or credit. No tax refund or credit is granted to RBEs covered by Section 19 of the Act.

Who is affected

• Registered Business Enterprises (RBEs)
• Projects granted incentives under RA No. 11534

Deadlines and effectivity

• Prospective provisions apply upon effectivity of the Act