Author MRTC

Introduction

BOI MEMORANDUM CIRCULAR NO. 2026-002

This Circular prescribes the revised guidelines on the issuance of Value-Added Tax (VAT) Zero-Rating Certificates for local purchases of goods and services, including incidental expenses, that are directly attributable to the registered project or activity of qualified Board of Investments (BOI) Registered Business Enterprises (RBEs), as follows:

RegistrationPeriod of Availment
1. BOI Registered Export Enterprises (REEs) under Executive Order (EO) No. 226 (Omnibus Investments Code of 1987), as amendedUntil December 31, 2034
2. BOI REEs under Republic Act (RA) No. 11534 (CREATE Act), as amendedMaximum period of 17 years from date of registration
3. RA No. 12066(CREATE MORE Act) 
a. REEsEntire registration period
b. High-value DMEsFrom the date of registration until the expiration of the income tax-based incentives

The issuance of the VAT Zero-Rating Certificate and the availment of VAT zero-rating are subject to the following conditions:

  • The supplier must be VAT-registered;
  • The REE must meet the seventy percent (70%) export sales threshold, while the High-value DME must meet the export sale or investment capital requirement;
  • The local purchase of goods and services must be directly attributable to the registered project or activity;
  • The buyer shall furnish suppliers with a copy of the VAT Zero-Rating Certificate;
  • The supplier shall issue duly registered VAT invoices with the words “VAT zero-rated” stamped thereon, in compliance with applicable invoicing requirements; and
  • The VAT zero-rating availment shall remain subject to BIR’s post audit verification that the goods are directly attributable to the registered project or activity.

The covered local purchases of goods and services include raw materials, equipment, utilities, maintenance services, and qualified HMO plans among others.

Applications for a VAT Zero-Rating Certificate shall be filed for each registered project or activity prior to purchase and within the prescribed filing period. The VAT Zero-rating Certificate issued shall cover the next taxable period. Failure to satisfy the seventy percent (70%) export sales threshold or the applicable export sales or investment capital requirement shall disqualify the qualified RBE from availing of VAT zero-rating in the immediately succeeding year.