BIR allows VAT refunds for exporters

MANILA, Philippines —  Qualified export-oriented enterprises (EOEs) may claim refunds for value-added tax (VAT) paid on eligible local purchases and imports while waiting for their zero-rating certification from the Department of Trade and Industry (DTI), the Bureau of Internal Revenue said.

BIR Commissioner Charlito Martin Mendoza issued Revenue Memorandum Circular 96-2026 on Sept. 7 amending the VAT refund guidelines under RMC 37-2025.

“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,” Mendoza said in a statement.

The BIR said the revised guidelines cover VAT incurred on local purchases and importations attributable to qualified zero-rated sales beginning Nov. 28, 2024 and before the enterprise received its DTI-Export Marketing Bureau certification, provided that the certification was issued within the prescribed transition period ending Dec. 31, 2025.

Mendoza said the clarification aims to ensure that exporters are treated consistently during the shift to the new VAT 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,” he said.

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.

The BIR said VAT that has already been reimbursed, credited, adjusted, recovered from suppliers or otherwise utilized may not subject of a VAT refund claim.

EOEs that met the 70 percent export threshold in the preceding taxable year but failed to obtain the required DTI-Export Marketing Bureau certification, including during the transition period, would not be entitled to a VAT refund for the immediately succeeding year.

Any unused input VAT may instead be carried forward to succeeding taxable quarters and applied against future VAT liabilities, subject to existing tax rules.