Philippines BIR allows VAT refunds for exporters awaiting certification

The Bureau of Internal Revenue (BIR) has announced that qualified export-oriented enterprises (EOEs) can claim refunds on value-added tax (VAT) paid on eligible local purchases and importations while awaiting their VAT zero-rating certification from the Department of Trade and Industry-Export Marketing Bureau (DTI-EMB).

Under Revenue Memorandum Circular No. 96-2026, issued on September 7, the guidelines cover VAT incurred on qualified zero-rated sales from November 28, 2024, until the enterprise receives its certification, provided the certification is issued within the transition period ending December 31, 2025. BIR Commissioner Charlito Martin Mendoza stated that the clarification provides a clear basis for refund claims to ensure fair and consistent tax treatment during the transition to the new certification system.

However, EOEs that meet the 70% export threshold but fail to secure the required EMB VAT zero-rating certification within the prescribed transition period are not entitled to VAT refunds for the immediately succeeding year. All refund claims remain subject to substantiation requirements under Section 112 of the National Internal Revenue Code.