- Registered business enterprises in freeport and economic zones have historically enjoyed VAT zero-rating on local purchases.
- The CREATE Act in 2021 changed the VAT zero-rating rules, limiting it to purchases directly and exclusively used in registered projects.
- The law restricted VAT zero-rating to necessary items for projects, excluding administrative expenses.
- Implementing regulations further limited VAT zero-rating to export enterprises, excluding domestic market enterprises.
- Initial implementation required prior tax authority approval for VAT zero-rating, but this was later removed.
- The CREATE MORE Act was introduced to address concerns about these changes.
Source: bdblaw.com.ph
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.
Latest Posts in "Philippines"
- Philippine Court Voids VAT Assessment for Lack of Annexes, Upholds Zero-Rating for Freeport Sales
- BOC Assigns Procedural Code 062 for VAT on Local Sales to Domestic Market Enterprises
- BIR Takes Over VAT Oversight on Local Sales from Bureau of Customs
- Supreme Court Ruling Clarifies VAT Zero-Rating for Freeport and Ecozone Enterprises in the Philippines
- Philippines Considers VAT Cut, Fiscal Incentives to Boost Garment Industry Competitiveness
