Guidance for Export-Oriented Enterprises on DTI certification, tax incentives

“Those who fail to prepare, prepare to fail.”

This principle has never been more relevant than today. Businesses that fail to adapt to new compliance requirements are not spared the consequences. With the government getting stricter on compliance, failing to prepare can result in the loss of tax incentives that businesses might otherwise be entitled to. In taxation, entitlement without compliance is no entitlement at all.

A NEW REALITY FOR EXPORT-ORIENTED ENTERPRISES
Did you know that availing of VAT zero-rating for local purchases and import VAT exemptions for Export-Oriented Enterprises (EOEs) now hinges on the formal issuance of an Export Management Bureau Certificate by the Department of Trade and Industry (DTI)?

Before the CREATE MORE Act, under Section 106(A)(2)(a)(3) of the NIRC of 1997 (as amended), the sale of goods to an export‑oriented enterprise — whose export sales exceed 70% of its total annual production — qualified for VAT zero‑rating only if all of the following elements were met:

1.) the sale was made by a VAT-registered person;

2.) the buyer must be considered an EOE; and,

3.) the goods sold must be used as raw materials or packaging materials for the goods exported by the EOE.

With the passage of the CREATE MORE Act (RA No. 12066), the rules have been streamlined. The law introduces clearer qualification requirements, strengthens inter‑agency oversight, and places the EMB Certification at the center of the incentive‑granting process. This certification now serves as the definitive basis for VAT zero‑rating and VAT exemption on imports, and both the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) rely on it in evaluating claims.

Further, pursuant to Sections 3 and 4 of RR No. 10-2025, local suppliers of goods and services to qualified EOEs and RBEs are no longer required to apply for approval for VAT zero-rating, nor are they required to seek confirmation or validation thereof with the BIR prior to their sales transaction with the EOEs and RBEs to qualify for VAT zero-rating.

FAILING TO OBTAIN AN EMB CERTIFICATION
Failing to obtain the required EMB Certification has significant tax and financial implications for EOEs.

• Ineligibility for VAT zero-rating on local purchases or VAT exemption on imports – Without a valid Certification, EOEs cannot avail of VAT zero‑rating on their local purchases of goods and services used in export operations or VAT exemptions on imports.

• Loss of VAT refund eligibility – EOEs that meet the 70% export threshold from the preceding taxable year but fail to secure EMB certification are not eligible for a VAT refund in the immediately succeeding year. However, the unutilized input VAT may be carried forward to the subsequent taxable quarter and can be utilized against future VAT liabilities.

QUALIFYING AS AN EOE
As defined under Revenue Regulations 010-2025, an EOE refers to a person, natural or juridical, engaged in the sale and actual shipment of goods and/or sale of services from the Philippines to a foreign country or economy as contemplated under Sections 106(A)(2)(a)(3), 108(B)(5) and 109(1)(dd) of the Tax Code, as amended.

To qualify for VAT-zero rated local purchases of goods and services and VAT-exempt imports, the following conditions must be satisfied: (a) Export sales must comprise at least 70% of total annual production or gross sales for the preceding taxable year; and (b) The goods or services must be directly attributable to export operations.

It is important to distinguish EOEs from Registered Business Enterprises (RBEs) or Registered Export Enterprises (REEs) under Investment Promotion Agencies (IPAs). While those may secure incentives via IPA registration, EOEs under CREATE MORE rely exclusively on EMB certification for VAT-related benefits.

KEY INCENTIVES UNDER CREATE MORE
Once certified, EOEs may avail of the following key incentives, subject to compliance with implementing rules:

• Value-added tax (VAT) zero-rating on the sale of goods to EOEs with export sales of at least 70% of its total sales for the preceding taxable year;

• VAT zero-rating of sales of services performed for EOEs with export sales of at least 70% of its total sales for the preceding taxable year; and

• VAT exemption on goods imports by EOEs with export sales of at least 70% of total annual sales in the preceding taxable year.

These incentives are intended to enhance competitiveness, lower production costs, and promote export growth, while maintaining safeguards against abuse.

The official list of Certified EOEs, Non‑Qualified EOEs, and EOEs with Revoked or Expired Certificates as of January 2026 under the CREATE MORE Act may be verified on the DTI website: https://www.tradelinephilippines.dti.gov.ph/web/tradeline-portal/certification-of-export-oriented-enterprises-under-the-create-more-act

DISCUSSION OF APPLICATION AND COMPLIANCE
The certification process involves several key steps:

• Preparation of documentary requirements for the EOE Certification application as enumerated under DTI Administrative Order No. 25-03.

• Submission of the application to the EMB. The EMB will review the application’s completeness and evaluate the submitted documents. It shall also determine and certify the compliance of EOEs that hit the 70% threshold under the Tax Code. The issuance of an EOE Certificate is free of charge.

• Issuance of CREATE MORE EOE Certificate – the issuance of the certificate is without prejudice to the conduct of post-audit investigation/verification by the BIR.

• Validity and Renewal – Certifications are generally valid for the covered taxable year.  Subsequent application by the EOR must be filed not earlier than 45 working days prior to the close of the EOE’s taxable year.

• Inter-Agency Coordination – DTI shares the list of certified EOEs with DoF, BIR and BOC, which becomes a reference point for audits, assessments, and post-clearance verification.

SAFEGUARDING INCENTIVES VIA STRONGER COMPLIANCE
Tax incentives are privileges, not inherent taxpayer rights. Eligibility is earned only through full compliance with statutory requirements and regulatory issuances; any deviation places these privileges at risk.

For EOEs, the message is unequivocal: meeting the 70% export threshold is no longer sufficient. Remaining current with regulatory developments and ensuring timely compliance, particularly with respect to EMB certification, is now indispensable.

Preparedness is no longer just a strategy — it is a safeguard against missed opportunities and avoidable losses. Businesses that strengthen their compliance posture are better positioned to fully maximize the incentives and benefits that are rightfully theirs.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

Vianca Antoinette A. Lomibao is an associate from the Tax Advisory & Compliance practice area of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.