BIR Clarifies VAT Zero-Rating Confusion for Suppliers of EOEs & RBEs

If you’re a local supplier dealing with Export-Oriented Enterprises (EOEs) or Registered Business Enterprises (RBEs), you know the drill: the constant back-and-forth, the refusal to honor VAT zero-rating certificates, or the demand for BIR confirmation. It’s a common headache that slows down transactions and creates unnecessary friction.

But here’s the good news. The Bureau of Internal Revenue (BIR) just issued a clear-cut Tax Advisory (dated June 11, 2025), cutting through this confusion once and for all. This is a game-changer, perfectly aligning with the CREATE MORE Act and bringing much-needed clarity to VAT zero-rating.

The Problem Solved: No More BIR Approval Needed for Local VAT Zero-Rated Sales

Let’s get straight to it. According to the BIR, under Sections 3 and 4 of Revenue Regulations (RR) No. 10-2025, local suppliers like you are no longer required to apply for BIR approval of VAT zero-rating.

Even better? You are NOT required to seek confirmation or validation from the BIR before making sales to qualified EOEs and RBEs.

Think about that for a second. This means if your EOE client presents a VAT zero-rating certification from the DTI-EMB, or your RBE client provides one from their respective Investment Promotion Agency (IPA), you must honor it. No more bureaucratic detours. No more waiting. The certification is the proof.

This directly addresses a major operational bottleneck and empowers suppliers to process transactions with efficiency and confidence.

Beyond Sales: VAT Exemption on Importation Simplified

The advisory’s clarity doesn’t stop at local sales. It also streamlines VAT exemption for importations:

For EOEs: The DTI-EMB certification is your proof of VAT exemption on importation.
For RBEs: Your IPA-issued Certificate of Authority to Import (CAI) is what you’ll present to the Bureau of Customs.

Simple, direct, and designed for compliance without unnecessary complications.

Your Mandate: Recognize and Honor These Certifications

The BIR’s message is unequivocal: all concerned suppliers are reminded to recognize and honor these VAT zero-rating certifications issued by the DTI-EMB or the IPAs. This isn’t just a suggestion; it’s a direct reminder to comply with the mandate of Republic Act No. 12066 (CREATE MORE Act), as implemented by RR No. 10-2025.

What if you have doubts about a certificate’s authenticity? The advisory provides a practical solution: inquire directly with the DTI-EMB or the relevant IPAs. You can also check their official websites for lists of approved EOEs or RBEs, if available. This allows for legitimate verification without resorting to time-consuming BIR processes for every transaction.

DISCLAIMER: This article is developed by subject matter experts at Babylon2k. This is for general information only and does not constitute expert advice. It is based on current regulations and may not account for all related topics. Any tax or compliance guidance provided cannot be used to avoid penalties or promote specific actions. Laws and interpretations may change over time, which could affect the accuracy of this report. We are not obligated to update this advisory if new regulations arise.