As Export-oriented Enterprises (EOE) navigate the evolving value-added tax (VAT) zero-rating process, understanding the implications of the updates or changes is critical for compliance and strategic planning.

To provide further clarification, Revenue Regulations (RR) No. 10-2025 and the related Bureau of Internal Revenue (BIR) issuance Revenue Memorandum Circular (RMC) No. 32-2025 provided key updates.

Can the EOEs apply for VAT refund? 

No, but the Export-Oriented Enterprises (EOEs) may apply for a VAT zero-rating; however, an EOE must generally meet at least 70% export threshold, where export sales constitute at least 70% of the total annual production from the preceding taxable year.

What are the requirements for an EOE in applying for a VAT zero-rating?

A Department of Trade and Industry-Export Management Bureau (DTI-EMB) certification confirming compliance with the threshold must be secured by the exporters. This is distinct from VAT zero-rating certifications issued by Investment Promotion Agencies (IPAs). 

Other key requirements exporters should do are as follows:

• Ensuring services are directly attributable to the export activity, following RR No. 10-2025 Sec. 106 of the Code.
• Confirm that the supplier has issued 0% VAT invoices for all sales that qualify.
• Monitor input tax attributable to export transactions
• Paper trail consisting of primary and secondary documents must be safely kept and readily available.

As an EOE, what would be the period subject to VAT zero-rating upon applicability?

The DTI-EMB certification is valid until the end of the applicable taxable year unless earlier revoked as mentioned on the validity of the certification under Sec. 4 of RMC No. 32-2025. – Rappler.com

Mon Abrea is a Global Tax Policy Expert and Chief Tax Advisor of the Asian Consulting Group (ACG), the Philippines’ premier tax advisory and investment consulting firm—providing tax strategy, compliance, and policy advisory services to multinational corporations, foreign investors, and government institutions. For strategic tax advisory, CONSULT ACG, or you may also send an email to [email protected] to host investment and tax briefing in key cities across Asia, Middle East, Oceania, Europe and North America.

References:

RR 10-2025 (Published on the BIR Website: Feb 27, 2025)
RMC 32-2025 EOE definition
RMC 37-2025: Updated VAT Refund Application Procedure (Published April 10, 2025)