New rules, new compliance mechanism: essential guidance for Export-Oriented Enterprises (EOEs) on DTI certification and tax incentives

“Those who fail to prepare, prepare to fail.” 

This principle has never been more relevant in today’s rapidly evolving tax and regulatory landscape. Businesses that fail to adapt to new compliance requirements are not spared from the consequences. With the government tightening compliance rules, failing to prepare can result in the loss of tax incentives that businesses might otherwise be entitled to enjoy. In taxation, entitlement without compliance is no entitlement at all. 

A New Reality for Export-Oriented Enterprises 

Did you know that the availment of VAT zero-rating for local purchases and import VAT exemptions for EOEs is now hinging on the formal issuance of DTI-EMB Certificate by the Department of Trade and Industry (DTI)? 

Before the CREATE MORE Act, under Section 106(A)(2)(a)(3) of the NIRC of 1997 (as amended), a sale of goods to an export‑oriented enterprise—whose export sales exceed 70% of its total annual production—qualified for VAT zero‑rating only if all of the following elements were met:

1. the sale was made by a VAT-registered person;
2. the buyer must be considered as an export-oriented enterprise; and,
3. the goods sold must be used as raw materials or packaging materials for the goods exported by the export-oriented enterprise.

With the passage of the CREATE MORE Act (RA No. 12066), the rules have been streamlined. The law introduces clearer qualification requirements, strengthens inter‑agency oversight, and places the DTI–EMB Certification at the center of the incentive‑granting process. This certification now serves as the definitive basis for VAT zero‑rating and VAT exemption on importation, and both the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) rely on it in evaluating claims.

Further, pursuant to Sections 3 and 4 of RR No. 10-2025, local suppliers of goods and services to qualified EOEs and RBEs are no longer required to apply for approval of VAT zero-rating, nor are they required to seek confirmation or validation thereof with the BIR prior to their sales transaction with the EOEs and RBEs to qualify for VAT zero-rating.

Consequences for Failing to Secure DTI-EMB Certificate

Failing to obtain the required DTI–EMB Certification has significant tax and financial implications for Export-Oriented Enterprises (EOEs).

1. Ineligibility for VAT Zero-Rating on Local Purchases or VAT Exemption on Importation - Without a valid DTI Certification, EOEs cannot avail of VAT zero‑rating on their local purchases of goods and services used in export operations or VAT exemption in its importations.
2. Loss of VAT Refund Eligibility - EOEs that have attained the 70% export threshold from the preceding taxable year but failed to secure certification from the EMB shall not be allowed for VAT refund covering the immediately succeeding year. However, the unutilized input VAT may be carried forward to the subsequent taxable quarter and can be utilized against future VAT liabilities.

Qualifying as an Export-Oriented Enterprise (EOE) 

As defined under Revenue Regulations 010-2025[3], an Export-Oriented Enterprise refers to a person, natural or juridical, engaged in the sale and actual shipment of goods and/or sale of services from the Philippines to a foreign country or economy as contemplated under Sections 106(A)(2)(a)(3), 108(B)(5) and 109(1)(dd) of the Tax Code, as amended.

To qualify for VAT-zero rated local purchases of goods and services and VAT exempt importation, the following conditions must be satisfied: (a) Export sales must comprise at least 70% of the total annual production or gross sales for the preceding taxable year; and (b) The goods or services must be directly attributable to export operations. 

It is important to distinguish EOEs from Registered Business Enterprises (RBEs) or Registered Export Enterprises (REEs) under Investment Promotion Agencies (IPAs). While those may secure incentives via IPA registration, EOEs under CREATE MORE rely exclusively on DTI certification for VAT-related benefits. 

Key Incentives Under the Create More Act 

Once certified, EOEs may avail of the following key incentives, subject to compliance with implementing rules: 

1. Value-added tax (VAT) zero-rating on Sales of goods to export-oriented enterprises with export sales of at least seventy percent (70%) of its total sales for the preceding taxable year;
2. VAT zero-rating of sales of services performed for export-oriented enterprises with export sales of at least seventy percent (70%) of its total sales for the preceding taxable year; and
3. VAT exemption of importation of goods by export-oriented enterprises with export sales of at least seventy percent (70%) of its total annual sales for the preceding taxable year.

These incentives are intended to enhance competitiveness, lower production costs, and promote export growth, while maintaining safeguards against abuse. 

The official list of Certified Export-Oriented Enterprises (EOEs), Non‑Qualified EOEs, and EOEs with Revoked or Expired Certificates as of January 2026 under the CREATE MORE Act may be verified on the DTI website: https://www.tradelinephilippines.dti.gov.ph/web/tradeline-portal/certification-of-export-oriented-enterprises-under-the-create-more-act

Discussion of Application and Compliance 

The certification process involves several key steps: 

1. Preparation of documentary requirements for the application of Export-Oriented (EOE) Certification as enumerated under DTI Administrative Order No. 25-03.
2. Submission of Application to DTI-Export Marketing Bureau - The Bureau shall review the completeness and evaluate the application based on the submitted documents. It shall also determine and certify the compliance of EOEs with the seventy percent (70%) threshold under the Tax Code. Take note that the issuance of an EOE Certificate is free of charge.
3. Issuance of CREATE MORE EOE Certificate – the issuance of the certificate is without prejudice to the conduct of post-audit investigation / verification by the BIR.
4. Validity and Renewal - Certifications are generally valid for the covered taxable year.  Subsequent application by the EOR shall be filed not earlier than forty-five (45) working days prior to the close of the taxable year of the EOE;
5. Inter-Agency Coordination - DTI shares the list of certified EOEs with DOF, BIR and BOC, which becomes a reference point for audits, assessments, and post-clearance verification. 

Safeguarding Incentives Through Stronger Compliance

Tax incentives are privileges granted by the State, not inherent taxpayer rights. Eligibility is earned only through full compliance with statutory requirements and regulatory issuances; any deviation places these privileges at risk.

For Export‑Oriented Enterprises, the message is unequivocal: meeting the 70% export threshold is no longer sufficient. Remaining current with regulatory developments and ensuring timely compliance, particularly with respect to DTI–EMB certification, is now indispensable.

In today’s regulatory landscape, preparedness is no longer just a strategy—it is a safeguard against missed opportunities and avoidable losses. Businesses that strengthen their compliance posture are better positioned to fully maximize the incentives and benefits that are rightfully theirs.

Let's Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

As published in BusinessWorld, dated 19 January 2026