Thailand
Philippines: Export, services sale slapped with 12% VAT
The Bureau of Internal Revenue (BIR) has implemented a 12-percent value-added tax on transactions that were previously taxed at zero percent.
Last June 9, Finance Secretary Carlos Dominguez 3rd signed Revenue Regulation 9-2021, which was issued on June 11 to implement the imposition of a 12-percent VAT on transactions covered by various sections of the Tax Code as amended by Republic Act 10963, or the “Tax Reform for Acceleration and Inclusion Act.”
Export sales; and sales of services and use or lease of properties were listed as transactions that were previously charged at zero percent VAT and will now be taxed at 12 percent.
The BIR said in terms of export sale, subject to 12-percent VAT is the sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer’s goods and paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas.
The sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed 70 percent of total annual production, and those considered export sales under Executive Order 226 or the Omnibus Investments Code of 1987 and other special laws are also subject to a 12- percent VAT.
Meanwhile, activities covered by the sale of services and use or lease of properties include the processing, manufacturing or repacking goods for other persons doing business outside the Philippines, which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the central bank.
Lastly, the tax agency added that services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods for an enterprise whose export sales exceed 70 percent of the total annual production are also subject to a 12-percent VAT.
Source: https://www.manilatimes.net/2021/06/14/business/top-business/export-services-sale-slapped-with-12-vat/1803128