In response to the amendments introduced under Republic Act (RA) 12066, otherwise known as the Create More Act, the Bureau of Internal Revenue (BIR) has released Revenue Memorandum Circular (RMC) 71-2025, which prescribes a revised format for the Value Added Tax (VAT) Zero-Rating Certificate, which shall be issued by investment promotion agencies (IPAs) to registered business enterprises (RBEs).
The VAT Zero-Rating Certificate issued by the concerned IPA shall serve as the primary documentary basis for RBEs in availing the zero percent VAT rate on their local purchases, without prejudice, however, to the conduct of post-audit verification by the BIR to ensure that the purchases are directly attributable to the RBE’s registered project or activity.
Prior to the issuance of RMC. 71-2025, the BIR had released RMC 36-2022, which prescribed the format for the VAT Zero-Rating Certificate under RA 11534, otherwise known as the Create Act. A key distinction between the previous and revised formats lies in the language used to describe eligible purchases. The earlier version required that purchases be “directly and exclusively used” for the registered activity, whereas the updated format refers to purchases “directly attributable” to the registered project or activity, including expenses incidental thereto, which reflects a broader and more flexible interpretation of qualifying expenditures under the Create More Act.
The revised format for VAT Zero-Rating Certificate is accessible through the official website of the BIR. RMC 71-2025 shall take effect on July 11, 2025.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants