Export-oriented enterprises (EEs) are vital contributors to the economy, driving industrial growth, attracting foreign investment, and generating employment across various sectors. To support these businesses, the government has historically offered tax incentives, including Value-Added Tax (VAT) zero-rating and exemptions on purchases and importations.
Under previous rules, VAT zero-rating and exemptions were limited to Registered Business Enterprises (RBEs) during their designated incentive period. Once this period ends, these benefits can no longer be availed of.
Republic Act No. 12066, also known as the CREATE MORE Act, not only retained these incentives, but also expanded their coverage. Under Sections 6, 7 and 8 of CREATE MORE, EEs may continue to avail of VAT zero-rating on local purchases and VAT exemptions on imports even after the lapse of their incentive periods, the cancellation of their Investment Promotion Agency (IPA) registration. Even if they were never registered with an IPA, they could be eligible provided they meet certain conditions and obtain certification from the Department of Trade and Industry’s Export Marketing Bureau (EMB). Clearly, this shift makes fiscal incentives more inclusive and performance-based, rather than being strictly tied to IPA registration status. Under CREATE MORE, once the incentive period ends, EEs do not automatically lose access to VAT-related benefits.
To implement these provisions, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular No. 32-2025. To be eligible for VAT zero-rating and exemptions under CREATE MORE, EEs must meet two primary conditions. First, a minimum of 70% of the EE’s total annual production from the preceding taxable year must be export sales. Second, the goods and services for which VAT incentives are claimed must be “directly attributable” to export activities, including not only production inputs but also support services such as janitorial, security, financial, consultancy, marketing, as well as administrative services like HR, legal, and accounting. These services need to be incidental to or reasonably necessary for the export activity of an EE. Thus, for EEs engaged in both export and domestic sales, it would appear that the corresponding purchases would need to be allocated between the two, unless the expense is clearly in relation to the export sales.
An indispensable requirement in order for EEs to avail of the VAT zero-rating is the EMB Certification. This certification confirms that the enterprise meets both the 70% export sales threshold and the directly attributable requirements.
The certification must be secured prior to any transaction, whether for local purchases or imports. For local transactions, a copy must be provided to local suppliers to validate VAT zero-rating eligibility. In the case of imports, the certification should be submitted to the Bureau of Customs (BoC) before the goods arrive.
To apply for the certification, EEs must submit supporting documents such as Audited Financial Statements, export documents and bank certifications of inward remittances.
While initial submissions may be made via e-mail, the EMB may require hard copies should they find it necessary. The EMB is tasked with processing complete applications within 20 working days. Certifications remain valid until the end of the EE’s taxable year, whether calendar or fiscal, unless revoked earlier.
Renewal applications must be filed no earlier than 45 working days before the close of the taxable year. Applicants may file any time within the 45-working-day window but are advised not to wait until the last minute to avoid delays and ensure continuity of VAT-related benefits through timely EMB review.
Upon issuance, the EMB certification is subject to a post-issuance audit. If it is determined that export sales of the export-oriented enterprise are less than 70% of the total annual production of the preceding taxable year, the Certification will be revoked. After revocation of the EMB Certification, the export-oriented enterprise will be subject to VAT on its imports for such taxable year covered by the revoked EMB Certification and will be allowed to refund the excess input tax after verification.
If an audit or validation reveals that an EE fails to meet the 70% export sales threshold, its EMB certification may be revoked. Moreover, any violations of the provisions outlined in the CREATE MORE Act, as enforced by RMC No. 32-2025, may lead to administrative, civil, or criminal charges. Such violations include, for example, submitting false or misleading documents during the certification process or applying VAT zero-rating to purchases not directly attributable to export activities.
It is worth clarifying that the EMB Certification is distinct from the VAT zero-rating certification issued by the IPAs. EEs which are currently registered and availing of incentives should only obtain the VAT-zero rating certification from the IPA in order to avail of the VAT incentives. Conversely, if an EE is no longer covered by an IPA incentive period, has had its IPA registration canceled, or was never registered with an IPA, it must obtain certification from EMB to qualify for VAT incentives on its purchases under CREATE MORE.
By preserving the VAT zero-rating on qualified purchases, the new rules ease the EE’s future burden of applying for input VAT refunds in relation to their export sales. This makes securing the EMB Certification ahead of procurement activities especially critical for businesses with frequent or time-sensitive procurement. Taxpayers must remain vigilant about timelines, while I hope that the government prioritizes the streamlining of the certification process. The DTI’s planned digital platform may offer a much-needed boost and pave the way for a smoother implementation.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.
Anika Mae Fierro is a senior associate at the Tax Services department of Isla Lipana & Co., the Philippine member firm of the PwC network.
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