Revenue Memorandum Circular No. 032-2025 disseminates the Joint Administrative Order (JAO) No. 002-2025, issued by the Department of Finance, Bureau of Internal Revenue, Bureau of Customs, and Department of Trade and Industry (DTI). The JAO provides guidelines for implementing Sections 6, 7, and 8 of Republic Act No. 12066, also known as the CREATE MORE Act (Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy). To qualify for VAT incentives, enterprises must have export sales that constitute at least 70% of their total annual production from the preceding taxable year.
Key Points:
VAT Zero-Rating: Sales of goods and services to export-oriented enterprises are zero-rated for VAT purposes, provided the sales are directly attributable to the export activity.
VAT Exemption: Importation of goods by export-oriented enterprises is exempt from VAT, provided the importations are directly attributable to the export activity.
Certification and Compliance: The DTI-Export Marketing Bureau (DTI-EMB) is responsible for determining compliance with the export sales threshold. An export-oriented enterprise applying for certification must submit the following documentary requirements to the DTI-EMB:
1. Application form prescribed by DTI-EMB;
2. Certified true copy of the following:
a. BIR Certificate of Registration; and
b. Proof of 70% export sales by the direct exporter such as financial statements, export documents and bank certification of inward remittances;
3. Affidavit executed by the owner, president or finance officer of the export-oriented enterprise, attesting and certifying that the export sales for the taxable year prior to the taxable year applied for is at least 70% of the total annual production;
4. Original copy of the notarized secretary’s certificate/special power of attorney or similar document authorizing the representative to follow up or sign documents on behalf of the claimant;
5. Photocopy of at least one (1) government issued ID with three (3) specimen signatures of the authorized representative/s; and
6. Other additional documentary requirements as prescribed by DTI-EMB.
The certification remains valid until the end of the applicable taxable year (e.g., calendar or fiscal) adopted by the export-oriented enterprise, unless it is revoked earlier. If the certification is revoked, the export-oriented enterprise will be subject to VAT for the taxable year covered by the revoked DTI-EMB certification. It is important to note that the DTI-EMB certification is separate and distinct from the VAT zero-rating certification issued by Investment Promotion Agencies, such as the Philippine Economic Zone Authority (PEZA) and the Bureau of Investments (BOI), to registered business enterprises.
The JAO, issued on February 26, 2025, will take effect immediately upon its publication in a newspaper of general circulation.
Source:
P&A Grant Thornton
Certified Public Accountants
P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd.
As published in SunStar Cebu, dated 07 May 2025
