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Optional VAT Registration Now Available for Transitory Domestic Enterprises in Eco Zones: BIR

  • Transitory domestic market enterprises in economic zones can now choose to register as VAT taxpayers
  • The regulation follows an amendment to the Corporate Recovery and Tax Incentives for Enterprises Act implementing rules
  • Registered business enterprises in economic or freeport zones can keep the 5% gross income earned incentive for 10 years and register as VAT taxpayers with certification from the relevant investment promotion agency
  • The new ruling enables VAT-registered DMEs to either charge output VAT to domestic customers or receive a refund for input VAT directly attributable to their zero-rated sales
  • Non-VAT registered RBEs with certification should update their registrations with the BIR revenue district office, transitioning from non-VAT to VAT taxpayer status
  • DMEs within economic or freeport zones opting for VAT registration under the new ruling cannot claim VAT refunds for transactions before the amended IRR of the CREATE Act’s effectivity.


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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