Tax Alert No. 23 [Revenue Memorandum Circular (RMC) No. 49-2022 dated 20 April 2022]

Amending Pertinent Portions of the Questions and Answers (Q&A) in Revenue Memorandum Circular (RMC) No. 24-2022 to Align Them with the Provisions of CREATE Act and its Implementing Rules and Regulations (IRR)

The Bureau of Internal Revenue has issued RMC No. 49-2022, amending the answers to certain questions in RMC No. 24-2022 to align them with the CREATE Act and its IRR. RMC No. 24-2022 previously covered issues in relation to the CREATE Act amendments in VAT zero-rating provisions of the Tax Code, as implemented under Revenue Regulations No. 21-2021.

The following are covered by the RMC:

1. The workaround provided under Question No. 10 of RMC No. 24-2022 is not limited to sales to registered export enterprises and domestic market enterprises (DMEs) within Ecozones and Freeport Zones, thus, shall also apply to other sales transactions covered in RR No. 9-2021;
   
2. Clarification on the rules that apply on DMEs’ sale of goods and services depending on whether they were registered prior to or during the effectivity of the CREATE Act;
   
3. Amendment of the answer to Question No. 31 in relation to the requirements from the existing registered export enterprises that have already completed their Income Tax Holiday (ITH) and already under the 5% Gross Income Tax (GIT) or Special Corporate Income Tax (SCIT) regime but remained as VAT-registered entity; and
4. Clarification on the local suppliers of goods/services' timeline for securing prior BIR approval on VAT zero-rating of sales to registered export enterprises.

Download Annex “A” of this tax alert for the relevant amendments.

You may access the full version of the Circular through the BIR website.