Status quo on VAT zero-rating of sales to PEZA entities

PEZA Memorandum Circular No. 2018-003, March 12, 2018

The PEZA Director-General announced that sale of goods and services to PEZA entities shall continue to be subject to 0% VAT.

This was issued following a clarification by the Department of Finance (DOF)  that the TRAIN law did not amend nor repeal the relevant provisions of the PEZA law.   Hence, the tax treatment/privileges of PEZA entities remain in full force and effect until a new law or revenue regulation is issued amending these provisions.

Suppliers of PEZA entities should continue to apply the 0% VAT on their qualified sales to PEZA entities subject to presentation of the PEZA certificate of VAT zero-rating valid for the period.  PEZA entities, on the other hand, should secure their VAT-zero rating certificates from PEZA and furnish a copy to their suppliers.