RR No. 28-2020: Implements the tax exemption provisions under Section 4 (cc) and Section 18 of RA No. 11494 (Bayanihan to Recover as One Act) on the incentives for the manufacture or importation of certain equipment, supplies or goods

Summary

RR No. 28-2020 implements Section 4 (cc) and Section 18 of RA No. 11494 (Bayanihan to Recover as One Act) on tax exemptions for the manufacture or importation of certain COVID-19 equipment, supplies and goods.

Key points

1. Exempt importations. Importations from June 25, 2020 to December 19, 2020 of goods listed in the Regulations as critical COVID-19 products are exempt from VAT, Excise Tax and other fees, subject to the stated limits. The exemption applies from June 25, 2020 following the lapse of RA No. 11469.
2. DTI certification and ATRIG. The importer must present a Department of Trade and Industry certification that the items are not locally available or of insufficient quality and preference. No ATRIG is required, but the BIR may conduct a post investigation audit.
3. Refund of VAT paid. VAT paid on qualified shipments from June 25, 2020 up to September 14, 2020 is refunded under Section 204(C) of the Tax Code, if the input tax was not reported and claimed as input tax credit in the VAT returns.
4. Donations. Donations of the imported articles to the National Government, its non-profit entities or political subdivisions are exempt from Donor’s Tax and follow the ordinary rules of deductibility.
5. Inputs for medical-grade goods. Inputs, raw materials and equipment for manufacturing medical-grade essential goods, as determined by FDA-DOH, are VAT-exempt for the registered manufacturer. The supplier submits a certified true copy of the FDA-DOH License to Operate and a Sworn Declaration of the manufacturer-buyer.
6. Sales still subject to VAT. Sales of finished goods under Section 2 (A)(1), and sales of Section 2 (F) inputs to a non-holder of the License to Operate, are subject to VAT. The Regulations are in force until December 19, 2020.

Who is affected

• Importers of listed COVID-19 goods
• Registered manufacturers of medical-grade essential goods
• Suppliers of inputs and raw materials

Deadlines and effectivity

• Importations from June 25, 2020 to December 19, 2020
• VAT refund for payments from June 25, 2020 up to September 14, 2020
• In force until December 19, 2020

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