Author MRTC

Introduction

REVENUE REGULATIONS (RR) NO. 001-2026

These Regulations amend certain provisions of Revenue Regulations (RR) No. 09-2025 to clarify the VAT treatment on local sales involving Registered Business Enterprises (RBEs), provide for optional VAT registration, define specific exclusions, and extend the deadlines for invoicing compliance.

Accordingly, these Regulations are hereby promulgated to amend Sections 3, 4, and 7 of RR No. 09-2025, as follows:

WHO are affected?  Registered Business Enterprises (RBEs) under SCIT or GIE incentives.Domestic Market Enterprises (DMEs) not qualified for zero‑rating or VAT‑exempt importation. Buyers of goods from ecozones/freeports making B2B local purchases. Entities registered under special laws but not availing Title XIII incentives.
WHAT are the changes?  Amends Sections 3, 4, and 7 of RR 9‑2025. Clarifies filing & payment rules for VAT on B2B local sales. Allows optional VAT registration for qualified RBEs.Excludes certain entities/transactions from Section 295(D) VAT rules. Extends invoicing system reconfiguration deadline to Dec. 31, 2026.
WHY did it change?  To clarify the proper VAT compliance process on local RBE sales. To avoid accumulation of unutilized input VAT for DMEs.  To ensure RBEs retain their fiscal incentives while allowing optional VAT registration. To give taxpayers more time for system reconfiguration.
WHERE does it apply?  Applies to all ecozones/freeports with local B2B sales requiring VAT payment before release. Nationwide, covering all RBEs, DMEs, and IPA‑registered enterprises. Applies to all registered invoicing systems (CRM/POS/CAS).
WHEN is the effectivity and deadline?  Takes effect on March 3, 2026, representing the 15th day following its issuance date, in accordance with Section 6 of this RR, which provides that they become effective 15 days after publication in the Official Gazette or the BIR Official Website, whichever comes first. Deadline for invoicing system reconfiguration extended to December 31, 2026 (with possible further extension).
HOW is it implemented?  VAT on local sales must be filed per transaction using Form 0605, unless bulk shipment allows a single consolidated payment.RBEs under SCIT/GIE may opt to register as VAT taxpayers, with a 3‑year non‑cancellation rule under Sec. 236(G). Buyers no longer remit VAT for excluded transactions/entities; RBE‑sellers file VAT directly. RBEs must reconfigure invoicing systems to reflect “VAT on Local Sales.”