RMC No. 53-2023

RMC No. 53-2023 (May 11, 2023) clarifies when economic zone (ecozone) developers and operators are entitled to VAT zero-rating on local purchases of goods and services directly and exclusively used in their registered project or activity. Because BOI MC No. 2022-003 included the development and operation of economic zones, industrial parks, and buildings for exporters as "Activities in Support of Exporters" under the 2020 IPP (transitional SIPP), an ecozone developer/operator that meets the stated qualifications may be classified as an export enterprise and thus entitled to VAT incentives under the CREATE Act. Qualifications include required infrastructure, new buildings outside NCR with a minimum contiguous land area of 10,000 square meters and specified features, at least 70% of leasable/saleable areas dedicated to exporters, and completion of the whole project within five (5) years if developed in phases. Non-qualifying developers/operators are classified as domestic market enterprises (under BOI MC No. 2021-001) and are not entitled to VAT incentives; revenues from clients/tenants engaged in activities not allowed under Section 293(M) of the CREATE Act are not entitled to the Income Tax Holiday.