RR No. 1-2026: Amending Sections 3, 4, and 7 of RR No. 9-2025 to clarify filing and payment rules for VAT on local sales, provide optional value-added tax (VAT) registration for certain Registered Business Enterprises (RBEs), extend the deadline for system reconfiguration, and exclude certain enterprises and activities from the coverage of VAT on local sales of RBEs under Section 295(D) of the NIRC of 1997 (Tax Code), as Amended by Section 18 of Republic Act No. 12066.

Summary

RR No. 1-2026 amends Sections 3, 4, and 7 of RR No. 9-2025 on VAT on local sales of Registered Business Enterprises (RBEs) under Section 295(D) of the Tax Code, as amended by Section 18 of RA No. 12066.

Key points

1. Purchases from ecozones or freeports. VAT on B2B local sales by RBEs is filed and paid per transaction, using BIR Form No. 0605 for now until the BIR prescribes a form. For bulk shipments covered by several invoices, the buyer may opt to pay in a single payment, with the list of invoices presented to the BOC before release.
2. Optional VAT registration. An RBE under the 5% Special Corporate Income Tax or Gross Income Earned regime, whose registered activities are all under the same income tax incentive, may register as a VAT taxpayer solely for its local sales. This does not affect its existing incentives, and it cannot cancel the registration under Section 236(E)(2) for three (3) years.
3. VAT-registered DMEs. VAT-registered Domestic Market Enterprises that do not qualify for VAT zero-rating on local purchases or VAT exemption on importation are not subject to the buyer’s payment and remittance of VAT under Section 295(D). The RBE-seller files and pays VAT as a regular VAT taxpayer.
4. Other exclusions. Excluded are VAT zero-rated goods under Section 106(A)(2), zero-rated services under Section 108(B), VAT-exempt transactions under Section 109, and VAT-exempt or zero-rated transactions under Title XIII, as well as entities registered with the Board of Investments by special law that do not avail of Title XIII incentives.
5. Unregistered activities. Local sales of RBEs from activities not registered with any IPA, including sales of scraps, are subject to regular VAT at 12%, filed and paid by the RBE-seller.
6. System reconfiguration. The deadline under Section 7 of RR No. 9-2025 for RBEs to rename ‘VAT/VAT Amount’ as ‘VAT on Local Sales’ in their systems is extended until December 31, 2026. The Commissioner may extend it further.

Who is affected

• Registered Business Enterprises (RBEs)
• VAT-registered Domestic Market Enterprises
• Buyers of goods from economic zones or freeports

Deadlines and effectivity

• System reconfiguration deadline: December 31, 2026
• Optional VAT registration: no cancellation for 3 years
• Issued: February 16, 2026

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.