Tax Notes

Tax exemption for importing health care supplies and equipment, Revenue Regulations No. .....

THE Bureau of Internal Revenue (BIR) has issued Revenue Regulations 6-2020, which implements the tax exemption provision in Republic Act (RA) 11469, known as “Bayanihan to Heal as One Act.” Section 2, Paragraph (o) of RA 11469 states that the President has the power to:

Liberalize the grant of incentives for the manufacture or importation of critical or needed equipment or supplies for the carrying-out of the policy declared herein, including healthcare equipment and supplies: Provided, that importation of these equipment and supplies shall be exempt from import duties, taxes and other fees;

In line with this, the BIR has declared the following:

(a) Exemption from value-added tax, excise tax and other fees on importing critical or needed health care equipment or supplies intended to combat the Covid-19 public health emergency, including:

a. Personal Protective Equipment (i.e., gloves, gowns, masks, goggles, face shields, surgical equipment and supplies)

b. Laboratory equipment and its reagents

c. Medical equipment and devices

d. Support and maintenance for laboratory and medical equipment, surgical equipment and supplies

e. Medical supplies, tools and consumables (i.e., alcohol, sanitizers, tissue, thermometers, hand soap, detergent, sodium hydrochloride, cleaning materials, povidone iodine and common medicine (e.g., paracetamol tablet and suspension, mefenamic acid, vitamin tablets and suspension, hyoscine tablet and suspension, oral rehydration solution and cetirizine tablet and suspension)

f. Testing kits

g. Other supplies and equipment determined by the Department of Health and other relevant government agencies

(b) Exemption from value-added tax, excise tax and other fees on importing materials needed to make health equipment and supplies deemed critical or needed to address the current public health emergency, provided that the importing manufacturer is included in the Master List of the Department of Trade and Industry and other incentive-granting bodies.

(c) Importation of exempted health care supplies and equipment shall not be subject to the issuance of the Authority to Release Imported Goods (ATRIG) under Revenue Memorandum Order (RMO) 35-2002. Therefore, the exempted goods shall be released by the Bureau of Customs (BOC) even without the ATRIG. However, importers listed by the BOC shall be subject to a post-investigation/audit by the BIR.

(d) Exemption from donor’s tax of donations of the imported exempted health care supplies or equipment to and for the use of the National Government or any entity created by any of its agencies that is not conducted for profit or to any political subdivision of the said government. These donations shall also be subject to the ordinary rules of deductibility under existing rules and issuances.

These regulations have been effective since March 27, 2020 and shall remain in full force during the three-month effectivity of RA 11469, unless extended or withdrawn by Congress or ended by Presidential Proclamation.

Source:

P&A Grant Thornton

Certified Public Accountants

 

As published in SunStar Cebu, dated 14 April 2020