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The Bureau of Internal Revenue clarified that qualified export-oriented enterprises may claim refunds of value-added tax paid on eligible local purchases and importations while awaiting the issuance of their VAT zero rating certification from the Department of Trade and Industry-Export Marketing Bureau during the transitory period
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BIR Revenue Memorandum Circular No. 96-2026 covers VAT incurred on local purchases and importations attributable to qualified zero-rated sales beginning November 28, 2024, and before the enterprise received its EMB certification, provided that the certification was issued within the prescribed transition period ending December 31, 2025
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EOEs that attained the 70% export threshold from the preceding taxable year but failed to secure the required EMB VAT zero-rating certification, including during the transition period, are not entitled to a VAT refund covering the immediately succeeding year
The Bureau of Internal Revenue (BIR) clarified that qualified export-oriented enterprises (EOEs) may claim refunds of value-added tax (VAT) paid on eligible local purchases and importations while awaiting the issuance of their VAT zero rating certification from the Department of Trade and Industry-Export Marketing Bureau (EMB) during the transitory period.
“Export-oriented enterprises received their VAT zero-rating certifications on different dates during the transition period. We are clarifying how VAT incurred while these certifications were being processed should be treated so qualified export-oriented enterprises will have a clear basis for their refund claims,” BIR commissioner Charlito Martin Mendoza said in a statement.
The clarification is contained in BIR Revenue Memorandum Circular (RMC) No. 96-2026, issued on September 7, 2026 and amends the VAT refund guidelines under RMC No. 37-2025. It covers VAT incurred on local purchases and importations attributable to qualified zero-rated sales beginning November 28, 2024, and before the enterprise received its EMB certification, provided that the certification was issued within the prescribed transition period ending December 31, 2025.
“Our objective is to ensure fair and consistent tax treatment for qualified export-oriented enterprises during the transition to the new zero-rating certification system. If they complied with the requirements and their certification was issued within the prescribed period, the VAT they properly incurred while waiting may be refunded in accordance with the law,” Mendoza added.
The refund remains subject to the requirements under Section 112 of the National Internal Revenue Code, as amended, including proper substantiation and proof that the input VAT is directly attributable to qualified zero-rated sales. VAT that has already been reimbursed, credited, adjusted, recovered from suppliers, or otherwise utilized may not be the subject of a VAT refund claim.
EOEs that attained the 70% export threshold from the preceding taxable year but failed to secure the required EMB VAT zero-rating certification, including during the transition period, are not entitled to a VAT refund covering the immediately succeeding year.
Any unused input VAT, however, may be carried forward to subsequent taxable quarters and utilized against future VAT liabilities in accordance with existing tax rules.
The requirement for an EMB certificate is pursuant to Republic Act No. 12066 (Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy or CREATE MORE), which provides for the VAT zero-rating of sales of goods to and sale of services performed by EOEs, and VAT exemption of importation of goods by EOEs, provided that the export sales of EOS are at least 70% of total annual production for the preceding taxable year, and that such goods and services are directly attributable to the export activity of the EOE.
BIR said the issuance of the clarification supports its continuing efforts to make tax administration clearer and more predictable for businesses.—Roumina Pablo
READ: DTI-EMB certificate enough proof for export firms’ VAT exemption: BOC
