RR No. 9-2025: Implementing Pertinent Provision of Section 295(D) of the National Internal Revenue Code of 1997 (Tax Code), as Amended by Section 18 of Republic Act No. 12066, Particularly on the Treatment of Local Sales of Goods and/or Services by Registered Business Enterprises (RBEs)

Key points

1. VAT on local sales. Local sales by an RBE are subject to 12% VAT, unless exempt or zero-rated under Titles IV and XIII of the Tax Code. This applies regardless of income tax regime or the location of the sale or RBE.
2. B2B sales. For sales to buyers engaged in business, including the Government and GOCCs, the RBE bills the VAT as a separate item tagged VAT on Local Sales. The buyer pays the price without the VAT and is liable to pay and remit the VAT.
3. Buyer filing. For goods from economic zones or freeport, payment is per transaction, and BIR Form No. 0605 is transmitted to the RBE-seller before goods are released. For services from them and for purchases from Board of Investments-registered enterprises, BIR Form No. 1600-VT is filed by the tenth (10th) day of the following month.
4. Seller compliance. Non-VAT registered RBEs under 5% GIE/SCIT do not file quarterly VAT returns but submit a quarterly summary list of local sales. VAT-registered RBEs under ITH/EDR/RCIT, and RBEs with mixed activities, file quarterly VAT returns.
5. B2C sales. For buyers not engaged in business, the consumer pays the VAT and the RBE-seller remits it. Sellers under 5% GIE/SCIT use BIR Form No. 0605 by the 10th day of the following month, and others report through BIR Form No. 2550Q.
6. Buyer input VAT, CWT and invoices. VAT-registered buyers claim no input VAT until the VAT is paid, and need the RBE sales invoice and the filed BIR Form No. 1600VT or 0605. The creditable withholding tax on purchases by the Government from RBEs becomes twelve percent (12%), and invoices must use the term VAT on Local Sales, with systems reconfigured until December 31, 2025.

Who is affected

• Registered Business Enterprises (RBEs)
• Buyers of goods and services from RBEs
• Government and GOCC buyers

Deadlines and effectivity

• Tenth (10th) day of the following month for BIR Form No. 0605 and 1600-VT
• System reconfiguration until December 31, 2025
• Issued February 27, 2025