*BIR PRESS RELEASE*
_February 23, 2026_
The Department of Finance (DOF) and Bureau of Internal Revenue (BIR) issued Revenue Regulations (RR) No. 1-2026, which amends certain provisions of RR No. 9-2025, to clarify the manner of filing and payment for value-added tax (VAT) on local sales, provide optional VAT registration for certain RBEs, extend the deadline for system reconfiguration, and exclude certain enterprises and activities from the coverage of VAT on local sales of RBEs under Section 295(D) of the National Internal Revenue Code of 1997 (Tax Code), as Amended by Section 18 of Republic Act (RA) No. 12066, or more popularly known as the Corporate Recovery and Tax incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act (CREATE MORE Act).
The said revenue issuance was released to address concerns of the external and internal stakeholders in the implementation of VAT on local sales of RBEs that was introduced under the CREATE MORE Act. The most notable changes are as follow:
Clarification on the manner of filing and payment of VAT on local sales of RBEs
For the sale of goods inside the economic zones or freeports classified as business-to-business (B2B) transaction, the filing and payment of the buyer shall be on a per transaction basis. However, it was further clarified that in cases where the shipment of the goods purchased in the economic zones or freeport is in bulk (e.g., delivered through a single container truck) and is covered by several invoices, the buyer may opt to pay the VAT due thereon in a single payment through BIR Form No. 0605, together with the list of all the invoices covered, which shall be presented to the BOC prior to the release of the goods.
Optional VAT Registration
An RBE availing of the 5% Special Corporate Income Tax (SCIT) or Gross Income Earned (GIE) regime, and whose registered activities are all under the same income tax incentive, may opt to register as a VAT taxpayer solely for purposes of its local sales. Such VAT registration shall not affect the RBE’s entitlement to its existing fiscal and non-fiscal incentives, including VAT zero-rating on local purchases and VAT exemption on importation, provided these are directly attributable to its registered activities.
Exclusions from the coverage of VAT on local sales of RBEs
This amendment to RR No. 9-2025 seeks to address the adverse tax implications arising from the application of Section 295(D) on certain RBEs, particularly Domestic Market Enterprises (DMEs) that are unable to recover input VAT due to ineligibility for VAT refund under Section 112(A) of the Tax Code, and other enterprises and transactions having similar concern. This move ensures consistency with the statutory framework and promotes equitable tax administration without necessarily eroding tax collection.
The following enterprises and transactions are, thus, excluded from the coverage of Section 295(D) of the Tax Code, as amended:
1. Local sales of VAT-registered Domestic Market Enterprises (DMEs) that do not qualify for VAT zero-rating on local purchases or VAT exemption on importation, despite being registered with any of the Investment Promotion Agencies;
2. Sales subject to VAT zero-rating under Sections 106, 108 and Title XIII of the Tax Code and VAT-Exempt Sales under Section 109 of the Tax Code;
3. Entities that have registered with the Board of Investments by virtue of a special law and are not availing of incentives under Title XIII of the Tax Code, as amended; and
4. Local sales made by RBEs that pertain to business activities not registered with any of the IPAs, including the sales of scrap materials, machineries, and property, plant and equipment.
For such transactions, the RBE-seller shall file and pay any corresponding VAT to the BIR.
Extension on the deadline for system reconfiguration
The effectivity of the provision under Section 7 of RR No. 9-2025, which requires RBEs using registered Cash Register Machines/Point-of-Sales (CRM/POS), Computerized Accounting System (CAS), Computerized Books of Accounts with Accounting Records, or other registered invoicing system/software to reconfigure or rename their system by replacing the term ‘VAT/VAT Amount’ in the breakdown of sales with ‘VAT on Local Sales,’ or adding the same where ‘VAT/VAT Amount’ is not applicable, has been extended until December 31, 2026.
As part of the BIR D.A.R.E.S. initiative, particularly “Service Excellence and Stakeholder Engagement”, BIR Commissioner Charito Martin S. Mendoza vows to improve taxpayer service by paying attention and immediately addressing the concerns of stakeholders particularly the taxpayers that are adversely affected in the implementation of newly introduced provisions of the Tax Code. Commissioner Mendoza recognizes the major role of investors in the economic growth and addressing their concerns is one of the aspects to improve the investment climate of the country.###
Walang komento:
Mag-post ng isang Komento