23/02/2026
๐๐ข๐ ๐๐ก๐ ๐๐๐ฅ ๐๐๐๐ฅ๐๐๐ฌ ๐ฅ๐จ๐๐๐ฆ ๐๐ข๐ฅ ๐ฉ๐๐ง ๐ข๐ก ๐๐ข๐๐๐ ๐ฆ๐๐๐๐ฆ ๐ข๐ ๐ฅ๐๐๐๐ฆ๐ง๐๐ฅ๐๐ ๐๐จ๐ฆ๐๐ก๐๐ฆ๐ฆ ๐๐ก๐ง๐๐ฅ๐ฃ๐ฅ๐๐ฆ๐๐ฆ (๐ฅ๐๐๐)
The Department of Finance (DOF) and Bureau of Internal Revenue (BIR) issued Revenue Regulations (RR) No. 1-2026, which amends certain provisions of RR No. 9-2025, to clarify the manner of filing and payment for value-added tax (VAT) on local sales, provide optional VAT registration for certain RBEs, extend the deadline for system reconfiguration, and exclude certain enterprises and activities from the coverage of VAT on local sales of RBEs under Section 295(D) of the National Internal Revenue Code of 1997 (Tax Code), as Amended by Section 18 of Republic Act (RA) No. 12066, or more popularly known as the Corporate Recovery and Tax incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act (CREATE MORE Act).
The said revenue issuance was released to address concerns of the external and internal stakeholders in the implementation of VAT on local sales of RBEs that was introduced under the CREATE MORE Act. The most notable changes are as follow:
๐๐น๐ฎ๐ฟ๐ถ๐ณ๐ถ๐ฐ๐ฎ๐๐ถ๐ผ๐ป ๐ผ๐ป ๐๐ต๐ฒ ๐บ๐ฎ๐ป๐ป๐ฒ๐ฟ ๐ผ๐ณ ๐ณ๐ถ๐น๐ถ๐ป๐ด ๐ฎ๐ป๐ฑ ๐ฝ๐ฎ๐๐บ๐ฒ๐ป๐ ๐ผ๐ณ ๐ฉ๐๐ง ๐ผ๐ป ๐น๐ผ๐ฐ๐ฎ๐น ๐๐ฎ๐น๐ฒ๐ ๐ผ๐ณ ๐ฅ๐๐๐
For the sale of goods inside the economic zones or freeports classified as business-to-business (B2B) transaction, the filing and payment of the buyer shall be on a per transaction basis. However, it was further clarified that in cases where the shipment of the goods purchased in the economic zones or freeport is in bulk (e.g., delivered through a single container truck) and is covered by several invoices, the buyer may opt to pay the VAT due thereon in a single payment through BIR Form No. 0605, together with the list of all the invoices covered, which shall be presented to the BOC prior to the release of the goods.
๐ข๐ฝ๐๐ถ๐ผ๐ป๐ฎ๐น ๐ฉ๐๐ง ๐ฅ๐ฒ๐ด๐ถ๐๐๐ฟ๐ฎ๐๐ถ๐ผ๐ป
An RBE availing of the 5% Special Corporate Income Tax (SCIT) or Gross Income Earned (GIE) regime, and whose registered activities are all under the same income tax incentive, may opt to register as a VAT taxpayer solely for purposes of its local sales. Such VAT registration shall not affect the RBEโs entitlement to its existing fiscal and non-fiscal incentives, including VAT zero-rating on local purchases and VAT exemption on importation, provided these are directly attributable to its registered activities.
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๐ฐ๐น๐๐๐ถ๐ผ๐ป๐ ๐ณ๐ฟ๐ผ๐บ ๐๐ต๐ฒ ๐ฐ๐ผ๐๐ฒ๐ฟ๐ฎ๐ด๐ฒ ๐ผ๐ณ ๐ฉ๐๐ง ๐ผ๐ป ๐น๐ผ๐ฐ๐ฎ๐น ๐๐ฎ๐น๐ฒ๐ ๐ผ๐ณ ๐ฅ๐๐๐
This amendment to RR No. 9-2025 seeks to address the adverse tax implications arising from the application of Section 295(D) on certain RBEs, particularly Domestic Market Enterprises (DMEs) that are unable to recover input VAT due to ineligibility for VAT refund under Section 112(A) of the Tax Code, and other enterprises and transactions having similar concern. This move ensures consistency with the statutory framework and promotes equitable tax administration without necessarily eroding tax collection.
The following enterprises and transactions are, thus, excluded from the coverage of Section 295(D) of the Tax Code, as amended:
1. Local sales of VAT-registered Domestic Market Enterprises (DMEs) that do not qualify for VAT zero-rating on local purchases or VAT exemption on importation, despite being registered with any of the Investment Promotion Agencies;
2. Sales subject to VAT zero-rating under Sections 106, 108 and Title XIII of the Tax Code and VAT-Exempt Sales under Section 109 of the Tax Code;
3. Entities that have registered with the Board of Investments by virtue of a special law and are not availing of incentives under Title XIII of the Tax Code, as amended; and
4. Local sales made by RBEs that pertain to business activities not registered with any of the IPAs, including the sales of scrap materials, machineries, and property, plant and equipment.
For such transactions, the RBE-seller shall file and pay any corresponding VAT to the BIR.
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๐๐ฒ๐ป๐๐ถ๐ผ๐ป ๐ผ๐ป ๐๐ต๐ฒ ๐ฑ๐ฒ๐ฎ๐ฑ๐น๐ถ๐ป๐ฒ ๐ณ๐ผ๐ฟ ๐๐๐๐๐ฒ๐บ ๐ฟ๐ฒ๐ฐ๐ผ๐ป๐ณ๐ถ๐ด๐๐ฟ๐ฎ๐๐ถ๐ผ๐ป
The effectivity of the provision under Section 7 of RR No. 9-2025, which requires RBEs using registered Cash Register Machines/Point-of-Sales (CRM/POS), Computerized Accounting System (CAS), Computerized Books of Accounts with Accounting Records, or other registered invoicing system/software to reconfigure or rename their system by replacing the term โVAT/VAT Amountโ in the breakdown of sales with โVAT on Local Sales,โ or adding the same where โVAT/VAT Amountโ is not applicable, has been extended until December 31, 2026.
As part of the BIR D.A.R.E.S. initiative, particularly โService Excellence and Stakeholder Engagementโ, BIR Commissioner Charito Martin S. Mendoza vows to improve taxpayer service by paying attention and immediately addressing the concerns of stakeholders particularly the taxpayers that are adversely affected in the implementation of newly introduced provisions of the Tax Code. Commissioner Mendoza recognizes the major role of investors in the economic growth and addressing their concerns is one of the aspects to improve the investment climate of the country.
