Summary
RMO No. 7-2006 sets the guidelines and procedures for processing applications for zero-rating of effectively zero-rated transactions for VAT purposes.
Key points
- Who processes applications. Applications are processed and approved by the Audit Information, Tax Exemption and Incentives Division (AITEID). Applications of large taxpayers go to the Large Taxpayers Audit and Investigation Divisions I and II (LTAID I and II) and the Large Taxpayers District Office (LTDO). Revenue District Offices may not process or approve them.
- Who may apply. Only VAT-registered sellers may file, for sales of goods, properties or services to qualified buyers certified or endorsed, whenever necessary, by the government regulatory agency. Legal issues are referred to the Law Division/VAT Review Committee, which sends its opinion to AITEID within 30 days from receipt of referral.
- Denials and endorsements. The reasons for a denial must be stated in the application. Applications needing favorable endorsement from other regulatory agencies are processed only once AITEID officially receives the annual master file or separate endorsement letter.
- Validity and renewal. An approved application takes effect on the date AITEID received it and is valid until December 31 of the year of application, renewable yearly. Renewal is filed on or before the last working day of December, and applications filed on or after the first working day of January are effective on actual receipt.
- Revocation. An approved application is revoked if the applicant misrepresented in the application or the exporter was erroneously endorsed for zero-rating. The revocation is retroactive to the date of approval.
Who is affected
- VAT-registered sellers to qualified buyers
- Large taxpayers
- Suppliers of qualified exporters
Deadlines and effectivity
- Effective on date of receipt by AITEID
- Valid until December 31 of the year of application
- Renewal on or before the last working day of December
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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