The Department of Trade and Industry – Export Marketing Bureau (DTI-EMB) held a Joint Public Consultation (PubCon) on February 19, 2025, to clarify the implementation of the CREATE MORE Act, specifically regarding the Certificate of Zero-VAT Rating for Export-Oriented Enterprises (EOEs).
Held both onsite and online, the consultation tackled the tax treatment of EOEs under the new law. Officials presented the draft Revenue Regulation (RR), draft Joint Administrative Order (JAO), and the procedures for securing a Zero-Rated VAT accreditation certificate. Key speakers included Mr. Jun-Jun B. Andallo, Atty. Brianna Kay De Los Santos, and Ms. Asnia R. Bayabao from the Bureau of Internal Revenue (BIR) and DTI-EMB.
Who Qualifies for VAT Zero-Rating?
A major discussion point was whether suppliers of services to EOEs qualify for VAT zero-rating. The BIR clarified that if a supplier’s client holds a Zero-VAT certification from the DTI-EMB, the supplier’s sales will also be zero-rated.
Export consolidators also raised concerns about VAT charges on payments received from international marketplaces by Small and Medium-sized Enterprises (SMEs). According to the BIR, consolidators acting as direct exporters may qualify for VAT zero-rating if they meet the necessary requirements.
Certification and Compliance: What Exporters Need to Know
To obtain zero-rated VAT accreditation, EOEs must submit a summary of operations covering at least nine months, along with proof of export transactions, such as waybills and packing lists. Some participants requested a reduction in documentary requirements, but while no immediate changes were promised, officials assured they are working to simplify the process while ensuring compliance.
VAT Refunds: Are Pre-Certification Transactions Eligible?
Another key issue was VAT refund eligibility for payments made before certification approval. BIR officials confirmed that eligible transactions within a two-year period may still qualify for refunds, provided they meet the necessary criteria.
What’s Next?
DTI-EMB and BIR assured participants that final implementation is underway. The certification process is set to begin on February 26, 2025, following the release of the Revenue Regulation (RR),with full implementation expected by mid-March.
As exporters adapt to these new regulations, DTI-EMB and BIR reaffirm their commitment to ensuring a smooth transition and supporting businesses in maximizing VAT zero-rating benefits under the CREATE MORE Act. KFS