Revenue Memorandum Circular · RMC
RMC No. 24-2022
To clarify issues relative to Revenue Regulations (RR) No. 21-2021 implementing the amendments to the VAT zero-rating provisions under Sections 106 and 108 of the Tax Code, in relation to Sections 294(E) and 295(D), introduced by the CREATE Act (RA No. 11534) and Sections 5, Rule 2 and Section 5, Rule 18 of the CREATE IRR.
- Document type
- RMC
- Number
- 24
- Year
- 2022
- Text quality
- Not specified
Document text
Reference copy · verify against the official sourceRMC No. 24-2022 clarifies RR No. 21-2021, which implements the CREATE Act amendments to the VAT zero-rating provisions of the Tax Code. It states that the cross border doctrine previously treating sales to Ecozone/Freeport zone registered enterprises as constructive exports is no longer operative for VAT purposes; only goods and services directly and exclusively used in an RBE's registered project or activity qualify for VAT 0% on local purchases. Transition rules: sales from June 27-30, 2021 must be declared at 12% VAT; for July 1-27, 2021 transactions already billed/collected, seller and buyer may retain the 12% VAT or revert to zero-rated by amending the VAT return, reimbursing the buyer's VAT, and cancelling/replacing the SI/OR, provided no LOA has been issued. Transactions already treated as zero-rated from July 1 to December 9, 2021 remain zero-rated. RR 21-2021 took effect upon its December 10, 2021 publication and covers transactions from the third quarter of taxable year 2021 onwards.