RR 3-2023 Digest FINAL

RR No. 3-2023 (issued April 26, 2023) amends the VAT zero-rating rules in RR No. 16-2005, as amended by RR No. 21-2021, to implement Sections 294(E) and 295(D) of the NIRC as amended by the CREATE Act. It updates Section 4.106-5 (zero-rated sales of goods or properties) and Section 4.108-5 (zero-rated sale of services), covering local sales of goods and services to registered export enterprises for direct and exclusive use in registered projects or activities for up to 17 years from registration, unless extended under the SIPP. Local purchases of goods tied to janitorial, security, financial, consultancy, marketing/promotion, and administrative services are presumptively not 'directly and exclusively used,' unless the enterprise proves otherwise to its Investment Promotion Agency. Zero-rating is availed through the IPA-issued certification — local suppliers no longer apply for BIR approval — subject to BIR post-audit; mixed-use goods that cannot be properly allocated are subject to 12% VAT. Input tax on zero-rated sales remains available as tax credit or refund.