[Ask the Tax Whiz] New VAT rules for registered business enterprises in the Philippines

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The Philippine Tax Whiz discusses the recently issued Revenue Regulations (RR) No. 01-2026 of the BIR

The Philippine Tax Whiz discusses the recently issued Revenue Regulations (RR) No. 01-2026, which updates the rules on Value-Added Tax (VAT) for Registered Business Enterprises (RBEs), especially for their local sales.

Are local purchases of goods and services to RBE in an ecozone or freeport subject to VAT?

Yes, the sale of goods and services by an RBE, regardless of its income tax incentives regime and location, and whether or not the sale occurs within a freeport or ecozone, shall be subject to 12% VAT. 

Under this regime, the business buyer shall be responsible for the filing and remittance of VAT using Bureau of Internal Revenue (BIR) Form 0605. This form shall be filed by the 10th day of the month following the transaction with RBE. 

As a buyer purchasing in bulk from an RBE supplier, can I consolidate the VAT into a single BIR Form 0605 filing?

While the regulation establishes that VAT must be computed on a per-transaction (per invoice) basis, it also recognizes the practical need for efficiency in cases involving bulk shipments or multiple invoices under a single release.

For bulk shipments covered by multiple invoices, the buyer may:

• Compute VAT for each individual invoice (per transaction basis);
• Aggregate the total VAT due across all covered invoices; and
• Make a single consolidated VAT payment using one BIR Form 0605.

To support the consolidated filing, the taxpayer must submit or attach a complete schedule/list of all invoices covered by the payment, including reference details (invoice number, date, supplier, and amount). The option for consolidation is intended to reduce administrative burden for taxpayers handling high-volume or consolidated shipments.

As a DME selling to an RBE, do I still need to file BIR Form No. 0605 and remit VAT per transaction?

No. Under RR No. 01-2026, sales of goods and services by a Domestic Market Enterprise (DME) to a Registered Business Enterprise (RBE) are now treated as regular VATable transactions.

Accordingly, the DME (seller) is responsible for charging, reporting, and remitting the 12% VAT through its regular VAT returns (BIR Form 2550Q). The previous requirement for the RBE buyer to compute and remit VAT using BIR Form No. 0605 on a per-transaction basis has been removed.

On the part of the RBE, it is now treated as a regular purchaser under the VAT system and may claim input VAT, if applicable, subject to standard rules on substantiation and deductibility. – Rappler.com

Mon Abrea is a Global Tax Policy Expert and Chief Tax Advisor of the Asian Consulting Group (ACG), the Philippines’ premier tax advisory and investment consulting firm—providing tax strategy, compliance, and policy advisory services to multinational corporations, foreign investors, and government institutions. For strategic tax advisory, CONSULT ACG, or you may also send an email to consult@acg.ph to host investment and tax briefing in key cities across Asia, Middle East, Oceania, Europe and North America.