BIR clarifies VAT refunds for export firms

The Bureau of Internal Revenue (BIR) has clarified that qualified export-oriented enterprises may seek refunds for value-added tax paid while waiting for their zero-rating certification, provided they met the requirements during the transition to the new system.

Revenue Memorandum Circular No. 96-2026, issued 7 September amends the VAT refund guidelines under RMC No. 37-2025 and covers eligible VAT incurred on local purchases and importations linked to qualified zero-rated sales beginning 28 November 2024.

The clarification applies to export-oriented enterprises that secured their VAT zero-rating certification from the Department of Trade and Industry-Export Marketing Bureau within the transition period that ended 31 December 2025.

To qualify, an enterprise must have met the 70-percent export threshold and obtained the required certification within the prescribed period. VAT incurred before the certification was issued may be included in a refund claim, subject to existing tax rules.

BIR Commissioner Charlito Martin Mendoza said the measure provides clearer treatment for companies that received their certifications on different dates while the new system was being implemented.

“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, however, said companies that met the 70-percent export threshold but failed to secure the required certification, including during the transition period, cannot claim a VAT refund for the immediately succeeding year.

Unused input VAT may instead be carried forward to succeeding taxable quarters and applied against future VAT liabilities.