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Zero Rated Value added tax in the Philippines

Updated: Sep 18, 2023

Zero Value Added Tax (VAT) is a tax

exemption that is granted to certain businesses in the Philippines. This tax exemption is aimed at promoting and supporting the growth of specific industries. In this blog post, we will take a closer look at the companies that are qualified for zero VAT and the legal requirements to qualify for it.

Who are qualified for Zero VAT?


There are several businesses that may qualify for zero VAT in the Philippines. These include:

  1. Exporters Exporters of goods and services are qualified for zero VAT. To be eligible, the exporter must be registered with the Bureau of Internal Revenue (BIR) and must submit all the required documents and certificates.

  2. Cooperatives Cooperatives that are registered with the Cooperative Development Authority (CDA) are qualified for zero VAT. The cooperative must also be engaged in the production and sale of goods and services.

  3. Agriculture and Aquaculture Industries Businesses engaged in agriculture and aquaculture industries are also qualified for zero VAT. These include farmers, livestock raisers, and fishpond owners who sell their products directly to consumers.

  4. Education Schools, colleges, and universities are qualified for zero VAT for their tuition fees and other education-related services.

Legal Requirements to Qualify for Zero VAT to qualify for zero VAT, businesses must meet certain legal requirements. These requirements include:

  1. BIR Registration All businesses that want to qualify for zero VAT must be registered with the BIR. This includes submitting all the necessary documents and certificates to the BIR.

  2. Certificate of Registration Businesses must also secure a Certificate of Registration (COR) from the BIR. The COR is a document that proves that a business is registered and eligible for zero VAT.

  3. Compliance with Tax Regulations Businesses must comply with


all tax regulations and laws in the Philippines. This includes filing tax returns and paying the required taxes on time.

  1. Proof of Eligibility Businesses must also provide proof of their eligibility for zero VAT. This includes submitting all the necessary documents and certificates that prove their eligibility.

Conclusion


Zero Value Added Tax is an important tax exemption that is granted to specific businesses in the Philippines. To qualify for zero VAT, businesses must meet certain legal requirements, including registration with the BIR, compliance with tax regulations, and providing proof of eligibility. By qualifying for zero VAT, businesses can save on taxes and contribute to the growth and development of their industries.


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2 Comments


Guest
May 11, 2023

Hello- is outsourcing business qualify for zero rated vat?

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Replying to

Yes, if they gain the revenue outside the Philippines and collect them in a foreign denominated currency

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