The Bureau of Internal Revenue (BIR), through Revenue Memorandum Circular (“RMC”) No. 96-2026, clarified the entitlement of export-oriented enterprises (“EOEs”) to Value Added Tax (“VAT”) refunds during the transitory period for securing a VAT zero-rating certification from the Export Marketing Bureau of the Department of Trade and Industry (“DTI-EMB”).
The Circular addresses the treatment of VAT passed on to EOEs following the effectivity of Republic Act No. 12066, or the CREATE MORE Act, on 28 November 2024, but before the issuance of their respective DTI-EMB VAT zero-rating certifications.
Under the CREATE MORE Act, qualified EOEs may avail of VAT zero-rating on qualified local purchases and VAT exemption on importations. On 28 March 2025, the DTI issued Department Administrative Order No. 25-03, Series of 2025, prescribing the guidelines for the certification of EOEs. This was followed by RMC No. 37-2025, which prescribed the streamlined procedures and requirements for VAT refund claims under Section 112 of the National Internal Revenue Code of 1997, as amended.
RMC No. 37-2025 originally provided that EOEs that were passed on VAT on their local purchases and importations upon the effectivity of the CREATE MORE Act on 28 November 2024 may claim a VAT refund until the effectivity of the DTI issuance implementing the processing of VAT zero-rating and VAT-exempt importations.
However, EOEs did not receive their VAT zero-rating certifications at the same time. Based on the DTI-EMB Masterlist of Certified EOEs as of 31 December 2025, the validity start dates of the certifications ranged from 14 May 2025 to 26 December 2025. The BIR attributed the differing dates to the transitory period afforded to EOEs for securing their respective certifications.
RMC No. 96-2026 now bridges this gap.
Under the Circular, EOEs that secured their DTI-EMB VAT zero-rating certifications during the transitory period may claim a refund of VAT passed on to them on qualified local purchases and importations attributable to zero-rated sales beginning 28 November 2024 until the issuance of their respective VAT zero-rating certifications. The certification, however, must have been issued within the transitory period, i.e., from 28 November 2024 until 31 December 2025.
Thus, the date of issuance of the DTI-EMB certification becomes significant. For EOEs that obtained their certifications within the transitory period, the VAT refund may cover passed-on VAT incurred from 28 November 2024 until the issuance of their respective certifications, subject to the requirements under Section 112 of the Tax Code.
It shall be noted, however, that EOEs which attained the seventy percent (70%) export threshold based on the preceding taxable year but failed to secure the required DTI-EMB certification, including during the transitory period, are not entitled to a VAT refund covering the immediately succeeding year. Their unutilized input VAT may instead be carried forward to subsequent taxable quarters and applied against future VAT liabilities.
The Circular likewise makes clear that the refund is not automatic. Only input VAT allowable under Section 112 of the Tax Code and directly attributable to qualified zero-rated sales may be refunded. Claims remain subject to applicable documentary, substantiation, attribution, and verification requirements. No refund will also be allowed to the extent that the VAT has already been reimbursed, credited, adjusted, recovered from suppliers, or otherwise utilized under existing tax laws and regulations.
For documentary purposes, the Circular retains the distinction between claims covering taxable periods prior to 01 April 2025 and those covering 01 April 2025 onwards, for which the corresponding checklists under RMC No. 37-2025 apply.
With RMC No. 96-2026, qualified EOEs now have a clearer basis for recovering VAT incurred during the period when the CREATE MORE VAT incentives were already in place but before their respective DTI-EMB certifications were issued. EOEs should therefore review the issuance date of their certifications, the VAT passed on to qualified purchases and importations prior to such date, and the supporting documents for any potential refund claim.
For reference, the full text of RMC No. 96-2026 may be accessed through this link.
For further information, please contact:
Eric T. Dykimching , Partner, Cruz Marcelo & Tenefrancia
