Tax Tweets

BIR Issuances

Amending Section 14 of the RR No. 3-2025 on the Prescribed Policies and Guidelines for the Implementation of Republic Act No. 12023, entitled “An Act Amending Sections 105, 108, 109, 110, 113, 114, 115, 128, 236 and 288 and Adding New Sections 108-A and 108-B of the National Internal Revenue Code of 1997, as Amended,” Imposing the VAT on Digital Services

Revenue Regulations No. 14-2025
Issued on April 25, 2025

This regulation amends Section 14 of RR No. 3-2025 to update the transitory provision regarding the registration deadline for Non-Resident Digital Service Providers (NRDSPs) under Republic Act No. 12023, which imposes VAT on digital services. Under the amendment, NRDSPs must register or update their registration with the BIR through the VDS Portal or Online Registration and Update System within 120 days from the effectivity of the regulations, specifically until June 1, 2025. VAT liability will commence on June 2, 2025. Additionally, the Commissioner of Internal Revenue is authorized to further extend the registration and transition deadlines, if necessary.

Creation of Alphanumeric Tax Code (ATC) for VAT and Final Withholding VAT on Digital Services from Non-Resident Digital Service Provider

Revenue Memorandum Order No. 13-2025
Issued on March 19, 2025

This Memorandum establishes the creation of the following Alphanumeric Tax Code (ATC) specifically for Value-Added Tax (VAT) on digital services performed, rendered, supplied, or delivered by Non-Resident Digital Service Providers to consumers or users in the Philippines, particularly in business-to-consumer (B2C) transactions, and Final Withholding VAT on the purchase of digital services consumed in the Philippines from Non-Resident Digital Providers and non-resident sellers/merchants in e-marketplaces:

ATC	Description	Tax Rate	BIR Form
VN010	VAT on digital services performed, rendered, supplied, or delivered by Non-Resident Digital Service Provider	12%	2550-DS
WV080	Final Withholding VAT on Purchase of Digital Service consumed in the Philippines from the non-resident digital service providers (Private Withholding Agent)	12%	1600-VT/2306
WV090	Final Withholding VAT on Purchase of Digital Service consumed in the Philippines from non-resident digital service providers (Government Withholding Agent)	12%	1600-VT/2306
WV100	Final Withholding VAT on the gross amount by resident e-marketplace to the non-resident sellers/merchants for the digital services sold/paid through their platform/facility	12%	1600-VT/2306

 

Revised Private Retirement Benefit Plan Regulations

Revenue Regulations No. 15-2025
Issued on April 29, 2025

This regulation is promulgated to revise the policies and guidelines on the taxability of retirement benefits received by employees under a reasonable private retirement benefit plan.

According to the regulation, in order to avail of tax incentives/privileges with respect to retirement benefits received by qualified employees, the following requirements must be met:

a. The Retirement Plan must be reasonable as determined by the Commissioner or his authorized representatives;

b. The retiring official or employee must have been in the service of the same employer for at least ten (10) years and is not less than fifty (50) years of age at the time of retirement; and

c. The retiring official or employee shall not have previously availed of the privilege under a retirement benefit plan of the same or another employer.

Furthermore, the regulation states that a Retirement Plan shall be considered reasonable if it meets the following conditions:

a. Written Program

It must be a definite written program setting forth all provisions essential for qualification.

b. Permanency

It must be a permanent and continuing program unless sooner terminated by virtue of a valid business reason.

c. Coverage

1. Percentage Basis

It must cover at least seventy percent (70%) of all officials and employees. If the plan provides eligibility requirements and at least seventy percent (70%) of all officials and employees meet the eligibility requirements, at least eighty percent (80%) of those eligible must be covered. On this basis, the following employees are excluded:

i. Employees who have been employed less than the minimum length of time stated in the plan;
ii. Employees who work twenty (20) hours a week or less; and
iii. Seasonal employees who work five (5) months a year or less.

2. Classification Basis

If the employer does not wish to cover the greater portion of the employees, it may set up a plan under a classification set-up prescribed by the employer and limit coverage to employees in a certain classification, over a prescribed age, employed for a stated number of years; provided that the coverage of the plan must not discriminate in favor of officers, shareholders, supervisors, or highly compensated employees. A classification shall not be considered discriminatory merely because it is limited to salaried or clerical employees. Neither shall a plan be considered discriminatory merely because the contributions or benefits of or on behalf of the employees under the plan bear a uniform relationship to the total compensation, or the basis or regular rate of compensation, and the employees’ length of service.

d. Contribution

The employer, or officials and employees, or both, shall contribute to a trust fund for the purpose of distributing to the officials and employees or their beneficiaries, the corpus and income of the fund accumulated by the trust in accordance with the plan.

e. Impossibility of Diversion

The corpus or income of the trust fund must at no time be used for, or diverted to, any purpose other than for the exclusive benefit of the said officials and employees.

f. Non-discriminatory

There must be no discrimination in contributions or benefits in favor of officials and employees who are officers, shareholders, supervisors, or highly compensated.

g. Non-forfeitures

It must provide for non-forfeitable rights, that is upon the termination of the plan or upon the complete discontinuance of contributions under the plan, the rights of each official or employee to benefits accrued to the date of such termination or discontinuance, to the extent then funded, or the rights of each employee to the amounts credited to his account at such time are non-forfeitable.

h. Forfeitures

The plan must expressly provide that forfeitures arising from severance of employment, death or for any other reason, must not be applied to increase the benefits any employee would otherwise receive under the plan at any time prior to the termination of the plan at the complete discontinuance or employer contributions thereunder. The amounts so forfeited must be used as soon as possible to reduce the employer’s contributions under the plan.

Consolidated Provisions to Simplify and Streamline the Procedures and Requirements Relative to the Availment of the Tax Exemptions and Incentives Granted to the Participating Private Entities under RA No. 8525 or the “Adopt-a-School Act of 1998”, RA No. 12063 or the “Enterprise-Based Education and Training (EBET) Framework Act”, and the Tax Code

Revenue Regulations No. 13-2025
Issued on March 31, 2025

This regulation is promulgated to consolidate Revenue Regulations No. 10-2003 and Section 294(C)(2) and (4) of the Tax Code to ensure the proper implementation of RA No. 8525 or the “Adopt-a-School Act of 1998,” RA No. 12063 or the “Enterprise-Based Education and Training (EBET) Framework Act,” and the Tax Code.

The regulations provide that under Section 294(C)(2) and (4) of the Tax Code, the registered export and domestic market enterprises are allowed to deduct:

a. 50% additional deduction on the labor expense incurred in the taxable year; the additional deduction on the labor expense shall not include salaries, wages, benefits, and other personnel costs incurred for managerial, administrative, indirect labor, and support services; and

b. 100% additional deduction on training expense incurred in the taxable year; the additional training expense shall only apply to trainings, as approved by the Strategic Investment Priority Plan, given to the Filipino employees engaged directly in the registered business enterprise’s production of goods and services.

On the other hand, the incentives granted to private entities under the Adopt-a-School Program are:

a. Deduction from the gross income of the amount of contribution/donation that were actually, directly and exclusively incurred for the program, subject to limitations, conditions and rules set forth in Section 34(H) of the Tax Code, plus an additional amount equivalent to 50% of such contribution/donation subject to certain conditions; and

b. Exemption from donor’s tax prescribed under Section 101 (A)(2) and (B)(2) of the Tax Code.

For Technical-Vocational Institutions (TVIs) implementing a registered EBET Framework, the incentives are:

a. An additional deduction from taxable income equivalent to 50% of actual training expenses from the effectivity of RA No. 12063 up to December 31, 2027; Provided, that starting January 1, 2028, the additional deduction shall increase to 75% of the actual training expenses; Provided further, that such deduction shall not exceed 5% of their total direct labor expenses, or ₱ 25,000,000.00 a year, whichever is lower; and

b. Donations, contributions, bequests, subsidies, or financial aid actually paid or made to a TVI implementing theoretical instructions for EBET Programs within the taxable year shall be exempt from payment of donor’s tax and shall be deductible from the gross income of the donor, subject to the provisions of the Tax Code.

Clarification of Certain Policies, Guidelines and Procedures Relative to the Processing and Issuance of Tax Clearance Certificate for Final Settlement of Government Contracts

Revenue Memorandum Circular No. 20-2025
Issued on March 20, 2025

This circular clarifies policies, guidelines, and procedures for issuing Tax Clearance Certificates for Final Settlement of Government Contracts (TCFG) pursuant to Revenue Memorandum Order No. 2-2025.

Under this Circular, a TCFG is required only for government contracts involving the procurement of goods, consulting services, and infrastructure projects through public bidding under RA No. 9184 (Government Procurement Reform Act), as amended by RA No. 12009.

A TCFG is a certificate that contractors who have existing contracts with government agencies, state universities, GOCCs, government financial institutions, and LGUs must secure and present prior to the final settlement of government contracts to ensure complete and timely payment and remittance of taxes.

A TCFG shall be presented only prior to the final settlement of the government contracts with its suppliers on a per contract basis (e.g., if a contract has 10 installment payments, TCFG is needed only before the 10th final payment, not for initial or partial payments).

Tax Clearance Certificate for General Purposes (TCGP) for collection purposes is no longer required, streamlining the process under RA No. 11032 (Ease of Doing Business Act).

Clarifying the Proper Tax Treatment of Joint Ventures/Consortiums formed for the Purpose of Undertaking Construction Projects under Section 22(B) of the Tax Code, in relation to RR Nos. 10-2012 and 14-2023, and the Administrative Requirements for all Joint Ventures/Consortiums pursuant to Section 236 of the same Code.

Revenue Memorandum Circular No. 21-2025
Issued on March 24, 2025

The circular was issued to clarify the proper tax treatment of Joint Venture/Consortiums (JVC) formed for the purpose of undertaking construction projects under Section 22(B) of the Tax Code.

At the outset, the circular enumerated the requirements to be qualified as a JVC not taxable as a corporation, as well as the persons or entities disqualified from being a JVC not taxable as a corporation. Also, the BIR requires the registration of all JVCs, regardless of its purpose, a separate TIN will be issued per project of the JVC.

The circular provides for the tax treatment for the operation of the JVC not taxable as a corporation:

• Payments received by the JVC not taxable as a corporation shall not be subject to creditable withholding taxes (CWT), but it is subject to 12% value added tax (VAT) pursuant to Section 108 of the Tax Code, and consequently to the creditable withholding VAT under Section 114 of the TRAIN Law.

• Payments made by the JVC not taxable as a corporation to co-venturer/member for their distributive shares shall be subject to 15% CWT except as provided for under RA No. 8182 or the “Official Development Assistance Act of 1996”, as amended.

• Payments made by the JVC, taxable or non-taxable, to their local/resident supplier of goods or services other than those covered by other rates of withholding tax shall be subject to a withholding tax of 1% (for supplier of goods) or 2% (for supplier of services).

All licensed contractors who are co-venturers/members of a JVC not taxable as corporation with a specific subject or undertaking exceeding 12-months must enroll to the BIR eFPS.

The BIR also mandates JVCs to fill and submit an annual income tax return and the use of the applicable BIR Forms No. 1702. The income tax return filed shall be accompanied by Audited Financial Statements.

All JVCs are required to deregister with the BIR after completion of the undertaking construction project.

Circularizing the Implementing Rules and Regulations of Title XIII of Republic Act No. 8424, otherwise known as the National Internal Revenue Code of 1997, as amended by Republic Act No. 12066

Revenue Memorandum Circular No. 42-2025
Issued on April 25, 2025

This issuance circularizes the Implementing Rules and Regulations of Title XIII of the Tax Code, as amended by the CREATE MORE Act. Title XIII of the Tax Code refers to Tax Incentives.

The IRR applies to:

a. All existing Investment Promotion Agencies (IPAs) as defined in the Act or related laws with respect to the administration and grant of tax incentives unless otherwise specifically exempted from the coverage thereof;

b. All newly registered projects or activities, including qualified expansion projects or activities of export enterprises and domestic market enterprises under the Strategic Investment Priority Plan (SIPP);

c. Registered enterprises, projects, or activities currently registered with IPAs and enjoying incentives prior to the effectivity of RA No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and RA No. 12066;

d. Other government agencies administering tax incentives with respect to the administration and grant of tax incentives and other registered enterprises availing of tax incentives; and

e. Government-owned and/or controlled corporations (GOCCs), government instrumentalities (GIs), government commissaries, and state universities and colleges (SUCs) that were granted tax subsidies under the Tax Expenditure Fund of the annual General Appropriations Act (GAA).

The pertinent provisions are as follows:

• “Investment promotion agencies (IPAs)” refer to government entities created by law, executive order, decree, or other issuance, in charge of promoting investments, granting and administering tax and non-tax incentives, and overseeing the operations of the different economic zones and freeports in accordance with their respective special laws.

– Examples: Board of Investments (BOI), Bangsamoro Board of Investments, Bangsamoro Economic Zone Authority, Philippine Economic Zone Authority (PEZA), Bases Conversion and Development Authority (BCDA), Subic Bay Metropolitan Authority, Clark Development Corporation, John Hay Management Corporation, Poro Point Management Corporation, Cagayan Economic Zone Authority, Zamboanga City Special Economic Zone Authority, PHIVIDEC Industrial Authority, Aurora Pacific Economic Zone and Freeport Authority, Authority of the Freeport Area of Bataan, Tourism Infrastructure and Enterprise Zone Authority, Bulacan Special Economic Zone and Freeport Authority, and all other similar existing authorities or that may be created by law unless otherwise specifically exempted from the coverage of the Tax Code.

• “Registered business enterprise (RBE)” refers to any individual, partnership, corporation, Philippine branch of a foreign corporation, or other entity organized and existing under Philippine laws and registered with an IPA, excluding service enterprises such as those engaged in customs brokerage, trucking or forwarding services, janitorial services, security services, insurance, banking, and other financial services, consumers’ cooperatives, credit unions, consultancy services, retail enterprises, restaurants, or such other similar services, as may be determined by the FIRB.

• “Registered export enterprise (REE)” refers to any RBE engaged in manufacturing, assembling or processing activity, and services such as information technology (IT) activities and business process outsourcing (BPO), and resulting in the direct exportation, and/or sale of its manufactured, assembled or processed product or IT/BPO services to another REE that will form part of the final export product or export service of the latter, of at least seventy percent (70%) of its total production or output.

• “Domestic market enterprise (DME)” refers to any RBE other than a registered export enterprise. This shall also include High-value DMEs as defined under Subsection (q) hereof.

• “High-value DMEs” refer to registered DMEs with investment capital exceeding Fifteen Billion Pesos (P15,000,000,000) and are engaged in sectors considered “import-substituting”, or with export sales in the immediately preceding year of at least One Hundred Million US Dollars ($100,000,000), or its equivalent in an acceptable foreign currency: Provided, That the threshold specified herein may be increased by the FIRB.

– For this purpose, the term “import-substituting” shall refer to the ability of the country’s domestic production of goods and services to locally supply such goods and services that are normally being imported by the Philippines: Provided, That the determination of the eligibility of what constitutes import substituting per sector shall be determined through the SIPP.

• “Certificate of Authority to Import (CAI)” refers to the document issued by the concerned IPA as proof of entitlement to the VAT and/or duty exemption on importation which shall contain a list of capital equipment, raw materials, spare parts or accessories to be imported that are directly attributable to the production of goods and performance of services, including goods used for administrative purposes.

• “Certificate of Entitlement to Tax Incentives (CETI)” refers to the document issued by the concerned IPA in a form prescribed by the FIRB, upon application by an RBE, as proof of entitlement to income tax-based incentives.
• “Certificate of Registration (COR)” refers to the document evidencing registration for each separate registered project or activity of an RBE with the concerned IPA and its entitlement to tax incentives.

• “Directly attributable” refers to goods and services that are incidental to and reasonably necessary for the registered project or activity of the RBE, including janitorial, security, financial, consultancy services, marketing and promotion, and services rendered for administrative operations such as human resources, legal, and accounting: Provided, That the determination of what shall be considered as ‘directly attributable’ to the registered project or activity of the RBE shall be with the concerned IPA.

Income tax-based incentives. — The following types of income tax-based incentives may be granted to registered projects or activities:

• Income Tax Holiday (ITH) — For all RBEs, exemption from regular income tax of registered project or activity imposed under the Tax Code: provided, That, without the need for a BIR ruling, creditable withholding tax shall not be imposed on income payments to RBEs related to their registered project or activity during the ITH availment period.

• Special Corporate Income Tax (SCIT) — For an REE, a tax rate equivalent to five percent (5%) based on the gross income earned, in lieu of all national and local taxes, and local fees and charges: Provided, further, That private ecozone developers shall be subject to real property tax on land owned by them under Section 24 of RA No. 7916, as amended.

For this purpose, “gross income earned” refers to gross sales or gross revenues derived from the registered project or activity, net of sales discounts, sales returns and allowances and minus costs of sales or direct costs, but before any deduction is made for administrative expenses or incidental losses during a given taxable period.

Only the following shall be considered as direct costs for purposes of computing the gross income earned to be imposed the five percent (5%) SCIT rate:

i. Direct salaries, wages, or labor expenses;
ii. Production supervision salaries;
iii. Raw materials used in the manufacture of products;
iv. Goods in process (intermediate goods);
v. Finished goods;
vi. Supplies and fuels used in production;
vii. Depreciation of machinery, equipment, and building directly and exclusively used in the performance/production of registered activity, and of that portion of the building owned or constructed that is directly and exclusively related in the performance/production of the registered activity;
viii. Rent and utility charges associated with building, equipment, and warehouses, or handling of goods used directly and exclusively in the rendition/production of registered activity;
ix. Financing charges associated with fixed assets used directly and exclusively in the registered activity the amount of which were not previously capitalized;
x. Service supervision salaries; and
xi. Direct materials and supplies used.

• “Enhanced Deductions Regime (EDR)” — For DMEs and High-value DMEs, deductions in addition to the allowable ordinary and necessary deductions under Section 34 of the Tax Code. REES may, at their option, avail of the EDR. In no case, however, shall EDR be granted simultaneously with the SCIT.

The following may be allowed as enhanced deductions:

1. Additional depreciation allowance of assets acquired for the production of goods and services (qualified capital expenditure). From the total depreciable cost of the assets that are directly related to the RBE’s production of goods and performance of services (qualified capital expenditure), RBEs may be allowed to claim an additional depreciation allowance of:

a) Ten percent (10%) for buildings; and
b) Twenty percent (20%) for machinery and equipment.

2. Additional deduction on labor expenses. RBEs shall be entitled to an additional deduction of fifty percent (50%) of their total labor expense for direct local employment in the taxable year. The additional deduction shall not include salaries, wages, benefits, and other personnel costs incurred for managerial, administrative, indirect labor, and support services.

3. Additional deduction on research and development expenses. RBEs shall be allowed to claim an additional deduction of one hundred percent (100%) on their research and development expenses that are directly related to the registered project or activity of the RBE: Provided, That the additional deduction shall be limited to local expenditure incurred for salaries of Filipino employees, and consumables and payments to local research and development organizations.

4. Additional deduction on training expenses. RBEs shall be entitled to an additional deduction of one hundred percent (100%) of their total expense on trainings conducted, as approved by the concerned IPA based on the SIPP, given to the Filipino employees engaged directly in the RBE’s production of goods and performance of services.

5. Additional deduction on domestic input expense. RBEs shall be allowed to claim an additional deduction of fifty percent (50%) on domestic inputs that are directly related to and actually used in the registered project or activity.
6. Additional deduction on power expenses. From the total power costs incurred in the production of the registered project or activity, RBEs shall be allowed to claim an additional deduction equal to one hundred percent (100%) of power expense incurred in the taxable year.

7. Deduction for reinvestment allowance to manufacturing and tourism industries. RBEs in the manufacturing and tourism industries that reinvest their undistributed profit or surplus in another manufacturing or tourism project or activity, respectively, that are listed in the SIPP, shall be allowed to avail until 31 December 2034 an additional deduction of no more than fifty percent (50%) of the amount reinvested within a period of five (5) years from the time of such reinvestment.

8. Additional deductions on expenses relating to exhibitions, trade missions, or trade fairs. RBEs shall be allowed to claim an additional deduction of fifty percent (50%) on expenses relating to exhibitions, trade missions, or trade fairs, including expenses incurred in promoting the export of goods or the provision of services to foreign markets approved by the concerned IPA.

9. Enhanced Net Operating Loss Carry Over (NOLO). The net operating loss of the registered project or activity during the first three (3) years from the start of commercial operation, which had not been previously offset as a deduction from gross income, may be carried over as a deduction from gross income within the next five (5) consecutive taxable years immediately following the last year of the ITH entitlement period of the project or immediately following the year of loss for RBEs electing EDR at the onset.

• Customs duty exemption on importation of capital equipment, raw materials, spare parts, or accessories. — REES and DMEs shall enjoy exemption from customs duties on their importation of capital equipment, raw materials, spare parts, and accessories for their registered project or activity, including goods used for administrative purposes.

The following conditions must be complied with:

1. The duty exemption shall only apply to the importation of capital equipment, raw materials, spare parts, or accessories directly attributable to the registered project or activity of RBEs, including goods used for administrative purposes; and

2. The capital equipment, raw materials, spare parts, or accessories are not produced or manufactured domestically in sufficient quantity or of comparable quality and at reasonable prices.

• VAT zero-rating and exemption. — The VAT exemption on importation and VAT zero-rating on local purchases shall only apply to goods and services directly attributable to the registered project or activity of an REE or a registered High-value DME, including incidental expenses thereto, subject to the following rules:

a. Sale of goods or services by a VAT-registered seller to an REE or High-value DME, regardless of location, shall be subject to zero percent (0%) VAT;

b. Sale, transfer, or disposal of previously VAT-exempt imported capital equipment, raw materials, spare parts, and accessories shall be subject to the following rules:

i. If the purchaser is an REE or High-value DME, regardless of location, the transaction shall be subject to zero percent (0%) VAT; or

ii. If the purchaser is a DME, regardless of location, the transaction shall be subject to twelve percent (12%) VAT based on the net book value of the capital equipment, raw materials, spare parts, or accessories.

Local sales of goods and/or services by an RBE, regardless of the income tax incentives regime and location, shall be subject to twelve percent (12%) VAT, unless otherwise exempt or zero-rated under:

a. Section 106 (Value-Added Tax on Sale of Goods or Properties), Section 108 (Value-Added Tax on Sale of Services and use or Lease of Properties), and Section 109 (Exempt Transactions) of Title IV of the Tax Code; and

b. Sections 294(D) and 295(E), Title of the Tax code.

For this purpose, “local sales” shall cover sales of goods and services to domestic market enterprises or non-RBE, regardless of whether the sales occur within the freeport or economic zones: Provided, That the liability to pay and remit the VAT to the government rests with the buyer of the said goods or services.

• Registered Business Enterprise Local Tax (RBELT). — The concerned local government, through an ordinance issued by the concerned Sanggunian, may impose an RBELT at the rate of not more than two percent (2%) based on gross income, as defined under Section 27(E)(4) of the Tax Code, during the ITH and EDR, as provided under Sections 294 (A) and (C) of the same code, respectively, which shall be in lieu of all local taxes, fees, and charges imposed by the LGU under the LGC, as amended:

Provided, that RBELT shall not be imposed on RBEs under SCIT:

Provided, further, that RBEs certified by the BOI as pioneer or non-pioneer shall be exempt from the local business tax for a period of six (6) or four (4) years, respectively, from the date of registration pursuant to Section 133(g) of the LGC:

Provided finally, That IPAs with regulatory powers as provided in their charters or by special laws shall continue to exercise such authority in relation to the imposition of fees and charges within their respective territorial areas or jurisdictions.

The RBELT shall be imposed on an RBE for as long as it meets the conditions for its registration, during the period of availment of the ITH and EDR:

Provided, that the determination of compliance by the RBE with its terms and conditions shall be with the concerned IPA:

Provided, further, that upon the expiration of the income tax-based incentives of the RBE, the LGU may continue to impose RBELT or local business tax exemption pursuant to its authority under the LGC.

The RBELT shall be directly remitted by the RBE to the treasurer’s office of the municipality or city where the enterprise is located.

• Taxation after the expiration of the period of availment of incentives. — All RBEs shall pay all applicable taxes at regular rates under the Tax Code and other laws after the expiration of the period of incentives of their registered project or activity.

Nonetheless, an REE may avail of the VAT-zero rating on local purchases and VAT-exemption on importation under Sections 106, 108, and 109 of the Tax Code: Provided, that they comply with the requirements set forth therein.

• Taxation of non-registered projects or activities. — Notwithstanding the provisions in the preceding Sections, sales receipts and other income derived from non-registered projects or activities shall be subject to appropriate taxes imposed under the Tax Code.

Amending Further RMC No. 48-2018, as amended by RMC No. 23-2023, on the Classification and Processing Time of One-Time Transactions (ONETTs)

Revenue Memorandum Circular No. 28-2025
Issued on April 4, 2025

The BIR further amended the classification of ONETTs and corresponding processing time for the issuance of ONETT Computation Sheet (OCS) and Electronic Certificate Authorizing Registration (eCAR), to align with the Citizen’s Charter 2024 Edition and Revenue Memorandum Order No. 12-2025, to wit:

ONETT Transactions	Classifications	Total Processing Time
		OCS	eCAR
Transfer of Real Property/ Shares of Stocks	Simple	3 working days	7 working days
	Complex	7 working days	7 working days
Donation of Properties	Simple	3 working days	7 working days
	Complex	7 working days	7 working days
Estate of the Decedent	Highly Technical	20 working days	7 working days

ONETT Processing time shall vary based on the following classifications:

a. Simple – transactions involving three (3) or less properties/type of shares and documents presented will not require for the conduct of ocular inspection of the property.

b. Complex – transactions involving transfer of more than three (3) properties/type of shares per transaction, or ocular inspection is needed.

c. Highly Technical – all estate tax transactions.

Circularizing the RA No. 12079, titled “An Act Creating a VAT Refund Mechanism for Non-Resident Tourists, adding a New Section 112-A to the Tax Code, as Amended, for the Purpose.”

Revenue Memorandum Circular No. 29-2025
Issued on April 7, 2025

RA No. 12079 provides that a tourist, which is defined as a non-resident foreign passport holder, shall be eligible for a VAT refund on locally purchased goods if the following requisites are present:

a. The goods are purchased in person by the tourist in duly accredited stores;

b. Such goods are taken out of the Philippines by the tourist within sixty (60) days from the date of purchase; and

c. The value of goods purchased per transaction is equivalent to at least three thousand pesos (₱3,000.00); Provided, That such threshold shall be subject to review and adjustment every three (3) years by the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, taking into consideration the Consumer Price Index (CPI) as published by the Philippine Statistics Authority (PSA).

Clarification on the Provisions on the Applicable Taxes Due on Sale of Real Property Considered as Ordinary Assets of the Seller and Other Relevant Matters

Revenue Memorandum Circular No. 31-2025
Issued on April 7, 2025

This circular provides guidance on tax compliance for taxpayers habitually engaged in the real estate business.

Its key points include:

1. Tax Returns: Taxpayers must file BIR Form No. 1606 (Withholding Tax Remittance Return — For Onerous Transfer of Real Property other than Capital Asset) and BIR Form No. 2000-OT (for documentary stamp tax). Multiple transactions cannot be lumped together in one return.

2. Income Tax Credit: Proof of payment via BIR Form No. 1606 must be attached to the Income Tax Return (ITR) where the sales were declared by the taxpayer-seller engaged in the real estate business.

3. Tax Credits in Annual ITR: Creditable withholding tax (CWT)remitted through BIR Form No. 1606 must be included under “Other Tax Credits/Payments” in the Annual ITR.

4. Sale Financed by Financing Institutions: If a property sale is financed by a loan from a financing institution (banks, PAG-IBIG/HDMF, etc.) and the financing institution approves and guarantees the release of loan/cash to the seller, the receipt of money shall be subject to 12% output value-added tax (VAT). The seller is required to issue a Sales Invoice to the buyer as evidence of sale and payment, and an Acknowledgement Receipt or Official Receipt to the financing institution as evidence of cash receipt.

5. Other Fees: Additional fees (e.g., transfer, processing, miscellaneous, registration fees) are subject to income tax and 12% output VAT.

Circularizing Joint Administrative Order No. 002-2025, Series of 2025, titled “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”

Revenue Memorandum Circular No. 32-2025
Issued on April 7, 2025

The circular provides for the following guidelines:

1. The Department of Trade and Industry Export Marketing Bureau (DTI-EMB) shall determine and certify the compliance of export-oriented enterprises with the seventy percent (70%) threshold.

2. The Certification to be issued by DTI-EMB (DTI-EMB Certification) shall be a requirement in the availment of the VAT zero-rating on local purchases or VAT exemption on importation. For this purpose, the export-oriented enterprise shall furnish a copy of the DTI-EMB Certification to its local supplier prior to the transaction and submit the same to the (Bureau of Customs (BOC) in case of importation.

Prescribes the Streamlined Procedures and Guidelines on the Mandatory Requirements for Claims of VAT Refund under Section 112 of the Tax Code, except those Pursuant to a Writ of Execution by the Courts

Revenue Memorandum Circular No. 37-2025
Issued on April 10, 2025

The circular covers claims for VAT refund under Section 112(A) and (B) of the Tax Code, except those pursuant to a writ of execution by the Courts, that are filed on April 1, 2025 and thereafter.

The circular provided the following general policies:

1. The time frame to process and grant claims for VAT refund is ninety (90) days from the date of submission of the certified true copies of the invoices or official receipts and other documents in support of the application filed in accordance with Section 112(A) and (B) of the Tax Code, up to the release of the payment for the approved amount of the refund.

2. VAT refund claims shall be subject to validation by the processing office as to the completeness of the documentary requirements submitted during the filing of application, hence, claims for VAT refund shall be physically or manually filed at the designated processing office authorized to receive applications.

3. The taxpayer-claimant shall ensure the completeness and authenticity of the documentary requirements submitted upon filing of the application for VAT refund. Hence, only applications with complete documentary requirements, as enumerated in the Checklist of Requirements (Annexes “A.1.1”, “A.1.2”, or “A.2”, whichever is applicable), shall be received and processed by the authorized processing office.

4. In case where the taxpayer-claimant filed the VAT refund claim beyond the 2-year prescriptive period as required under Section 112 of the Tax Code, the claim shall be accepted, however, the processing office shall recommend outright denial thereof.

5. If upon filing or during the processing of the VAT refund claim, the taxpayer-claimant has outstanding tax liabilities (final and executory) as defined under Section II(1) of Revenue Memorandum Order No. 11-2014, and evidenced by Delinquency Verification Certificate prescribed in Annex “A” of Revenue Memorandum Circular No. 64-2019, the ensuing approved VAT refund shall be referred for garnishment.

6. For VAT refund claims where the period covered starts from April 1, 2025, the following rules shall apply:

a. No refund of input VAT shall be allowed on the part of the export-oriented enterprise (EOE) that attained the seventy percent (70%) threshold from the preceding taxable year in case the local suppliers passed-on VAT on the local purchases of goods directly attributable to the former’s export activity for the immediately succeeding year despite securing VAT zero-rating certificate from the Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI). In such cases, the qualified exporter may contest the same and/or resolve with the local supplier for the reimbursement of the VAT paid, if any, or convert the transaction from twelve percent (12%) VAT to VAT at zero percent (0%).

b. Upon the effectivity of R.A. No. 12066 and its implementing rules and regulations, the EMB shall accept applications of EOEs for VAT zero-rating on their local purchases and VAT exemption on their importations. To avoid duplication of government agencies having to validate the export activities of taxpayer-claimants, the EMB shall certify the direct export sales of qualified taxpayer-claimants. Hence, documents evidencing actual export of goods or services shall be submitted to the EMB for their scrutiny and issuance of a certification as to its veracity through a template/schedule prescribed for this purpose. The processing office of the BIR shall verify the export sales of the taxpayer-claimant on the basis of the certification issued by the EMB.

c. EOEs that have attained the 70% export threshold from the preceding taxable year but failed to secure certification from the EMB shall not be allowed for VAT refund covering the immediately succeeding year. However, the unutilized input VAT may be carried forward to the subsequent taxable quarters and can be utilized against future VAT liabilities.

d. For EOEs that failed to meet the threshold from the preceding year and would claim for refund the input taxes from their local purchases attributable to zero-rated sales on the immediately succeeding year, the copy of the notification from the EMB with a clear statement that sales from the preceding year is below the 70% threshold must be submitted. This proves that the immediately succeeding year (that is the taxable year covered by the VAT refund claim) is not qualified for VAT zero-rating on local purchases and is therefore subject to 12% VAT. Also, a certified copy of the schedule or evaluation sheet from the EMB, containing the result of validation of export sales and inward remittances for the current year or taxable year covered by the VAT refund claim shall be submitted in lieu of the export documents such as airwaybills/bills of lading to prove actual export and bank certifications to prove inward remittances.

e. For taxpayer-claimants that have purchases from registered business enterprises (RBEs) covered under RR No. 9-2025, no input VAT shall be claimed until the corresponding VAT has been paid on the purchase from RBE-sellers. The following documents are required for the local buyers of RBEs:

1. Sales Invoice issued by the RBE showing the amount of VAT on local sales; and

2. Copy of the corresponding duly-filed BIR Form No. 1600VT or BIR Form No. 0605, whichever is applicable.

This issuance also details the documents to be submitted by the taxpayer-claimant upon filing of the application for vat refund.

Clarification on the Requirement of Submission of Taxpayer Identification Number of Cooperative Members for the Issuance of Certificate of Tax Exemption in Relation to RMC No. 158-2022

Revenue Memorandum Circular No. 38-2025
Issued on April 23, 2025

This circular is being issued to aid in the implementation of the requirement of TIN in the application of Certificate of Exemption (CTE) of cooperatives and allows ample time to comply with the requirement.

I. Timeline in the compliance of cooperatives in the submission of TIN

Cooperatives must submit a list of all its members with their corresponding TINs to the BIR. In case of failure to secure the TIN of all members due to justifiable reasons, the cooperatives are given a period of nine (9) months to comply with the TIN requirement.

II. Justifiable Reasons

The cooperative which fails to secure the TIN of all its members is required to submit a Sworn Affidavit stating all the justifiable reasons for failure to comply with the requirement prior to the application of CTE, and with the undertaking that it will comply with the TIN requirement within 9 months from issuance of the CTE.

III. Application of the CTE where the only lacking requirement is TIN of the members.

The application for CTE, where the only lacking requirement is the TIN of its members, will still be processed, provided that the Sworn Affidavit in Item II is submitted.

IV. Denial and Suspension/Revocation of CTE

No CTE of the cooperatives shall be suspended/revoked and no application for CTE shall be denied solely on the basis of the non-submission of the TIN of its members until the availability of the enhanced Online Registration and Update System (ORUS) of the BIR is in place.

Creation of Alphanumeric Tax Code of Selected Revenue Source under RR No. 07-2025

Revenue Memorandum Order No. 19-2025
Issued on April 15, 2025

The following ATCs are created:

ATC	Description	Tax Rate	Legal Basis	BIR Form No.
IC220	Domestic Corporation classified as Registered Business Enterprise under the Enhanced Deductions Regime	20%	RA No. 12066 / RR No. 07-2025	1702Q / 1702-RT / 1702-MX
IC230	Resident Foreign Corporation classified as Registered Business Enterprise under the Enhanced Deductions Regime	20%

 

Modification, Dropping and Creation of Alphanumeric Tax Code of selected revenue source under RA No. 12066 (CREATE MORE) Act

Revenue Memorandum Order No. 18-2025
Issued on April 10, 2025

The following ATCs are modified:

	EXISTING (per ATC Handbook)		BIR FORM NO.	LEGAL BASIS	MODIFIED/ NEW
ATC	Description	Tax Rate			Tax Rate
WI156 WC156	Income Payments made by credit card companies. Individual Corporate	1/2 of 1%	1601-EQ/ 2307	R.A. No. 12066/ RR No. 5-2025	1/2%

The following ATCs are dropped:

ATC	Description	Tax Rate	Legal Basis	BIR Form No.
WI760 WC760	On one-half (1/2) of the gross remittances by e-marketplace operators and digital financial services providers to the sellers/merchants for the goods or services sold/paid through their platform/facility Individual Corporate	1%	RR No. 16-2023	1601-EQ/2307

The following ATCs are created:

ATC	Description	Tax Rate	Legal Basis	BIR Form No.
WI820 WC820	On one-half (1/2) of the gross remittances by e-marketplace operators to the sellers/merchants for the goods or services sold/paid through their platform/facility Individual Corporate	1/2%	R.A. No. 12066 / RR No. 5-2025	1601-EQ/2307
WI830 WC830	On one-half (1/2) of the gross remittances by digital financial services providers to the sellers/merchants for the goods or services sold/paid through their platform/facility Individual Corporate	1/2%	R.A. No. 12066 / RR No. 5-2025	1601-EQ/ 2307

 

Clarification on the Submission of Proof of Settlement of Estate Pursuant to RR No. 10-2023

Revenue Memorandum Circular No. 40-2025
Issued on April 24, 2025

The circular is issued to clarify the provisions of Section 2 of RR No. 10-2023 regarding the submission of proof of settlement of the estate, whether judicial or extra-judicial, for purposes of availing of estate tax amnesty.

This circular provides the following documents required for the availment of the estate tax amnesty:

1. Estate Tax Amnesty Return (ETAR) – BIR Form No. 2118-EA;
2. Acceptance Payment Form – BIR Form No. 0621-EA; and
3. Complete documentary requirements as prescribed under RR No. 10-2023

The proof of settlement of the estate (e.g. extrajudicial settlement, court order) is not required to accompany the ETAR at the time of filing and payment if it is not yet available, and the non-submission of such proof on or before June 14, 2025 shall not invalidate the application for estate amnesty. However, this proof of settlement shall be required during the processing and issuance of Electronic Certificate Authorizing Registration.

SEC Issuances

Rules on Single Business Group Investment Limitation

SEC Memorandum Circular No. 2-2025
Issued on March 28, 2025

Any investment company must not invest, in aggregate, more than twenty percent (20%) of their net assets in transferable securities, money market instruments, deposits, and over-the-counter (OTC) financial derivatives issued by any single business group (SBG), provided the investments in OTC financial derivatives with non-investment grade or unrated counterparty shall not exceed five percent (5%) of the net assets of the investment company.

However, equity funds, balanced funds, and multi-asset funds with actual exposure to equity securities that do not invest in actual financial derivatives shall not be subject to the SBG Limit and instead shall be subject to the single entity or issuer investment limit of 20%.

No fines or penalties shall be imposed on the exempted funds for any breach of the SBG Limit from May 15, 2020, until the day immediately preceding this Circular’s effectivity.

Grace Period for Compliance with the Securities Registration Requirement under SEC Memorandum Circular No. 12, Series of 2024 or “SEC RENT”

SEC Notice
Issued on March 31, 2025

This Notice provides that registration of securities by real estate developers and/or managers involved in the sale or offer for sale or distribution of investment contracts, certificates of participation or participation in profit-sharing agreements over rental pools agreements of real estate properties under the simplified registration statement provided under SEC Memorandum Circular No. 12, Series of 2024 (Securing & Expanding Capital in Real Estate Non-Traditional Securities) also known as “SEC RENT,” should be made on or before 30 September 2025.

Mandatory use of SEC ZUPER EASY REGISTRATION ONLINE (ZERO) in the registration of corporations using eSPARC and OneSEC portals.

SEC Memorandum Circular No. 3-2025
Issued on April 4, 2025

This Memorandum Circular mandates the use of the Zuper Easy Registration Online (ZERO) system for the registration of corporations through the eSPARC and OneSEC portals.

The memorandum states that the ZERO system integrates with the Electronic Submission Authentication Portal (eSAP) and the Electronic SEC Universal Registration Environment (eSECURE), allowing users to authenticate documents electronically, thus eliminating the need for physical signatures, notarization, and submission of hard copies.

Re-Implementation of SEC’s Accreditation of Auditing Firms and External Auditors

SEC Notice
Issued on April 4, 2025

The SEC issued this notice in relation to Resolution issued on 28 January 2025 by the Supreme Court in the case SEC vs. 1Accountant Party-list, Inc., et.al, G.R. No. 24607.

The SEC will continue its Accreditation Program requiring external auditors of covered corporations to be accredited with the Commission. For the smooth re-implementation of the SEC’s Accreditation of Auditing Firms and External Auditors, the notice prescribes the submission of audited financial statements, extension of SEC accreditation, and processing of pending and new applications.