Supreme Court Ruling Clarifies VAT Zero-Rating for Freeport and Ecozone Enterprises in the Philippines

• The Supreme Court ruled that both export and domestic market enterprises (DMEs) in freeports and ecozones are entitled to VAT zero-rating under the CREATE Act, overturning regulations that excluded DMEs.
• The decision clarifies that government agencies cannot narrow incentives granted by law through implementing rules.
• VAT treatment significantly impacts business cash flow, costs, and competitiveness, especially for large local purchases.
• Under the newer CREATE MORE law, only “high-value” DMEs now qualify for VAT zero-rating, based on investment or export criteria.
• The ruling provides business clarity and affects cost structure, supplier negotiations, and cash management for registered enterprises.

Source: manilatimes.net

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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