BIR clarifies VAT refund rules for export-oriented enterprises

The Bureau of Internal Revenue (BIR) has clarified that qualified export-oriented enterprises (EOEs) may claim refunds for value-added tax (VAT) incurred on eligible local purchases and importations while awaiting their VAT zero-rating certification during the transition to the new certification system.

Under Revenue Memorandum Circular (RMC) No. 96-2026, issued September 7, 2026, the BIR amended the VAT refund guidelines under RMC No. 37-2025, which introduced streamlined procedures and revised requirements for processing and granting VAT refund claims.

The new circular covers VAT incurred on local purchases and importations attributable to qualified zero-rated sales beginning November 28, 2024, and continuing until before an EOE received its VAT zero-rating certificate from the Department of Trade and Industry–Export Marketing Bureau (DTI-EMB).

To qualify, the EOE must have secured its DTI-EMB VAT zero-rating certification within the prescribed transition period, which ended December 31, 2025, and must have met the 70% export threshold.

The clarification addresses Section III(1)(a) of RMC No. 37-2025, particularly the qualification of EOEs for VAT refunds while their applications for VAT zero-rating certification were being processed during the transition period.

EOEs that met the 70% export threshold in the preceding taxable year but failed to secure the required DTI-EMB VAT zero-rating certification, including within the transition period, are not entitled to a VAT refund for the immediately succeeding year.

Unused input VAT, however, may be carried forward to subsequent taxable quarters and applied against future VAT liabilities, subject to existing tax rules.

BIR Commissioner Charlito Martin Mendoza said RMC No. 96-2026 seeks to ensure fair and consistent tax treatment for qualified EOEs during the shift to the new VAT zero-rating certification system.

Mendoza noted that EOEs received their VAT zero-rating certifications from the EMB on different dates during the transition period, creating a need to clarify the treatment of VAT incurred while their certifications were being processed.

“If they complied with the requirements and their certification was issued within the prescribed period, the VAT they properly incurred while waiting may be refunded in accordance with the law,” Mendoza said.

The BIR stressed that VAT refund claims remain subject to the requirements under Section 112 of the National Internal Revenue Code, as amended. These include proper substantiation and proof that the input VAT is directly attributable to qualified zero-rated sales.

VAT that has already been reimbursed, credited, adjusted, recovered from suppliers or otherwise utilized cannot be claimed again as a VAT refund.

The BIR said RMC No. 96-2026 forms part of its continuing efforts to make tax administration clearer and more predictable while supporting compliance, investment and ease of doing business.

The circular took effect immediately.