Understanding the VAT Refund for Tourists in the Philippines

What Is the VAT Refund Program?

The Philippines’ VAT refund system is a new benefit for international travelers looking to shop and save while exploring the country. Under Republic Act No. 12079, non-resident tourists can now claim a 12% VAT refund on eligible purchases made at accredited stores.

If you’ve ever wondered, “How much is the tax refund in the Philippines?” or “What are the VAT refund requirements?” this guide breaks it down for you.

Why does it matter?

Non-resident tourists can now enjoy more savings when they shop in the Philippines, encouraging higher spending and boosting the local economy. Republic Act No. 12079 also lets the Philippines align with the VAT refund policies in Singapore, Japan, and Europe.

Who Is Eligible for a VAT Refund in the Philippines?

To qualify for a tax refund when traveling abroad, you must meet specific requirements:

1. You must be a non-resident foreign tourist.
2. You must shop at BIR-accredited stores offering VAT refunds.
3. Purchased items must leave the country within 60 days from the date of purchase.
4. You must meet the minimum purchase requirement of ₱3,000 (~USD 52) per transaction.

How to Know If You Qualify for a VAT Refund Online:

The Bureau of Internal Revenue (BIR) and accredited retailers will provide updates on registered businesses offering VAT refunds. Check the latest VAT refund RMC (Revenue Memorandum Circular) for specific store lists and official refund guidelines.

How to Claim Your VAT Refund in the Philippines

With the integration of Section 112-A into the National Internal Revenue Code (NIRC) under Republic Act No. 12079, the VAT refund process for tourists is now simpler, more transparent, and accessible. This amendment ensures that non-resident tourists, local businesses, and the government all benefit from this new system. For non-resident tourists, the refund process is straightforward.

Step-by-Step Process for Tourists:

1. Shop at participating stores that are BIR-accredited for VAT refunds.
2. Keep your receipts as proof of purchase.
3. Present your passport at the store when you make your purchase.
4. Before departure, visit the designated VAT refund counter at the airport.
5. Submit your receipts and claim your refund in cash or via electronic transfer.

VAT Refund Deadline: Process your refund before leaving the country to avoid missing the deadline.

How Republic Act No. 12079 Improves Tourism and Business

This VAT refund program works alongside Republic Act No. 9593 (The Tourism Act of 2009) to attract more tourists and strengthen the Philippines’ economy. Here’s how these laws work together:

Republic Act No. 12079	Republic Act No. 9593
Gives financial incentives to tourists, encouraging higher spending.	Improves tourism infrastructure and promotions through Tourism Enterprise Zones (TEZs).

The combination of tax benefits and tourism initiatives will position the Philippines to compete with top shopping destinations worldwide.

Benefits of VAT Refund for Tourists, Businesses, and the Government

For Tourists:

• Enjoy instant savings on imported goods and luxury items.
• Shop tax-free at participating malls and retail stores.
• Smooth and hassle-free refund process.

For Local Businesses:

• Attract more international shoppers.
• Boost sales through competitive tax incentives.
• Align with global retail standards.

For the Philippine Government:

• Strengthen the tourism industry.
• Increase economic growth from visitor spending.
• Improve compliance through the National Internal Revenue Code (NIRC) Section 112-A.

Frequently Asked Questions (FAQs) About VAT Refunds

1. How much is the tax refund in the Philippines?

Tourists can reclaim 12% VAT on eligible purchases.

2. What is the minimum amount required for a VAT refund?

You must spend at least ₱3,000 per transaction at accredited stores.

3. Can tourists get a VAT refund on imported goods?

Yes, as long as they meet the export requirement of leaving the country with purchases within 60 days.

4. When is the VAT refund deadline?

Refunds must be processed before departure at designated refund counters.

5. Where can I find a list of stores offering VAT refunds?

Check the latest VAT refund RMC updates from BIR or partner retailers.

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DISCLAIMER: This advisory 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.

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SOURCE

Understanding the Significance of VAT Refund for Non-Resident Tourists in the Philippines