THE GOVERNMENT is finalizing the guidelines on certifying export-oriented enterprises (EOEs) for availing of value-added tax (VAT) zero-rating on local goods and services.
In an online public consultation on Wednesday, the Department of Trade and Industry’s Export Marketing Bureau (EMB), Bureau of Internal Revenue (BIR), Bureau of Customs (BoC), and Department of Finance (DoF) presented the draft guidelines for certifying EOEs.
Citing Sections 106 and 109 of the Tax Code, the draft allows EOEs with export sales of at least 70% of their total annual production in the preceding taxable year to the VAT zero-rating on goods and services directly attributable to the export activity and a VAT exemption on imported goods.
The prospective joint administrative order (JAO) tasks the EMB with deciding which EOEs are compliant with the threshold.
“The certification to be issued by EMB shall be a requirement in availing of the VAT zero-rating on local purchases or the VAT exemption on imports,” according to the draft.
“For this purpose, a copy of the certification shall be submitted by the EOE to its local supplier prior to the transaction and to the BoC in case of imports,” it added.
EOEs are required to submit an application form as prescribed by the EMB, certified true copies of the BIR Certificate of Registration, and proof of 70% export sales by the direct exporters.
According to the draft, the proof could take the form of financial statements, export documents, or bank certification of inward remittances.
The EOEs are also required to provide an affidavit executed by the owner or finance officer of the company testifying that export sales meet the threshold and other additional documents to be prescribed by the EMB.
As part of its role, the EMB is tasked with submitting to the DoF, BIR, and BoC a master list of all EOEs issued a certification, to be updated every 15th and 30th day of each month. — Justine Irish D. Tabile
