BIR Allows VAT Refund Claims for Eligible Exporters Awaiting Zero-Rating Certification

The Bureau of Internal Revenue (BIR) has issued new guidelines allowing export-oriented enterprises (EOEs) to claim refunds for value-added tax (VAT) paid on eligible purchases and imports while awaiting their zero-rating certification. This measure aims to support the cash flow of exporting firms and clarify tax treatment during the transition period. BIR Commissioner Charlito Martin R. Mendoza stated that the circular was issued to clarify the basis for refund claims, as EOEs received their VAT zero-rating certifications on different dates. Revenue Memorandum Circular No. 96-2026 amends VAT refund guidelines for local purchases and imports incurred from November 28, 2024, and before an enterprise received its certification from the Department of Trade and Industry’s Export Marketing Bureau (EMB), provided the certification was issued within the transition period ending December 31, 2025. "Our objective is to ensure fair and consistent tax treatment for qualified export-oriented enterprises during the transition to the new zero-rating certification system," Mr. Mendoza said. "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." However, refunds remain subject to requirements under Section 112 of the National Internal Revenue Code, including proper substantiation and proof that input VAT is directly attributable to qualified zero-rated sales. VAT that has already been reimbursed, credited, adjusted, recovered from suppliers, or otherwise utilized is not eligible for a refund claim. The BIR also clarified that EOEs that achieved the 70% export threshold from the preceding taxable year but failed to secure the required VAT zero-rating certification, even during 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 utilized against future VAT liabilities in accordance with existing tax rules. According to the EMB, 112 EOE certificates were issued in 2025, and 125 valid certificates were recorded as of April 15, 2026.