Now VATABLE– Indirect export of Raw materials / Packaging materials to Non-Resident buyer but delivered to a resident export oriented enterprise, BOI Registered Enterprises and for other persons doing business outside the Philippines; and sale of services by subcontractors and or contractors to export oriented enterprise

The Bureau of Internal Revenue issued Revenue Regulation 9-2021 to implement the imposition of the 12% VAT on certain transactions previously taxed at zero-rate.

Section 2 of the said provision enumerated the transactions that are now subject to 12% VAT.

The transactions that are considered as export sale are:

1. Sale of raw materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packaging or repacking in the Philippines of the said buyer’s goods and paid for in acceptable foreign currency.
2. Sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production.
3. Those considered as export sales under Executive Order. 226 otherwise known as the Omnibus Investments Code of 1987 and special laws (BOI Registered Enterprises)

The sale of services and use of lease of properties under subparagraph (1) and (5) of Section 108 (B) of the Tax Code of 1987, as amended.

1. Processing, manufacturing or repacking goods for other persons doing business for outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency.
2. Services performed by subcontractors and/or contractors in processing, converting or manufacturing goods for an enterprise whose export sales exceed seventy (70%) of the total annual production.

Attached also is a copy of the above mentioned Revenue Regulation for your reading reference.rr-no.-9-2021