Tax Alert No. 6 [Revenue Memorandum Circular (“RMC”) No. 032-2025]

Circularizing Joint Administrative Order (“JAO”) No. 002-2025, Series of 2025, entitled "Guidelines to Implement Sections 6, 7, and 8 of Republic Act No. 12066, on the Certification of Export-Oriented Enterprise with Export Sales of at Least Seventy Percent (70%) of the Total Annual Production of the Preceding Taxable Year." 

Please be informed that RMC No. 032-2025 has been issued to circularize JAO No. 002-2025, Series of 2025, entitled "Guidelines to Implement Sections 6, 7, and 8 of Republic Act No. 12066, on the Certification of Export-Oriented Enterprise with Export Sales of at Least Seventy Percent (70%) of the Total Annual Production of the Preceding Taxable Year." 

The salient provisions of this JAO are summarized below: 

• Republic Act (“RA”) No. 12066, which amended certain provisions of the National Internal Revenue Code, as amended, provides for the VAT zero-rating on sales of goods and services to export-oriented enterprises (“EOEs”) and VAT exemption on importation of goods by these enterprises. To qualify, EOE’s export sales must be at least 70% of the total annual production for the preceding taxable year and provided that the goods and services are directly attributable to the export activity of the EOEs.  
• The Department of Trade and Industry (“DTI”), through its Export Marketing Bureau (“EMB”), is tasked with verifying compliance with these thresholds. The Certification shall be required to avail the VAT zero-rating on local purchases or VAT exemption on importation. Its copy shall be furnished to EOE’s local supplier or to the Bureau of Customs (“BOC”) for its importation.  
• The JAO outlines the certification procedure for EOEs seeking VAT zero-rating and exemption benefits. Enterprises must apply for certification with the DTI-EMB, providing necessary documentation such as proof of export sales, financial statements, and affidavits attesting to compliance with the 70% threshold.  
• The DTI-EMB processes applications within 20 working days and issues certifications valid until the end of the applicable taxable year. If an enterprise fails to meet the required export sales percentage, the certification may be revoked, subjecting the enterprise to VAT on importations for the affected year. 

You may access the full version of this Regulation through the BIR website.

For any inquiry or request for assistance, please feel free to contact anyone from our Tax Services group. You may also reach us through this link