THE secretary of Finance has issued Revenue Regulations 26-2018, which amends positive quantities of RR thirteen-2018, or the “2018 Value-delivered Tax (VAT) Regulations.” RR 13-2018 implements the VAT and percentage tax provisions of Republic Act 10963, or the Tax Reform for Acceleration and Inclusion (Train) Act. Like Train, RR 13-2018 took effect on Jan. 1, 2018.
Before we dive into the amendments brought with the aid of RR 26-2018, it would be profitable to study some of the salient provisions of RR 13-2018:
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The following export sales of goods and services continue to be subject to zero-percent VAT:
– The sale of raw or packaging substances to a non-resident buyer for transport to a resident nearby export-orientated enterprise as a way to be used in production, processing, packing or repacking that consumer’s goods inside the Philippines, paid for in perfect foreign foreign money and accounted for in accordance with the policies and guidelines of the Bangko Sentral ng Pilipinas (BSP).
– The sale of uncooked or packaging materials to an export-orientated business enterprise whose export income exceed 70 percent of overall annual production.
– Transactions taken into consideration “export sales” below the Omnibus Investments Code of 1987 and other special legal guidelines.
– Processing, manufacturing or repacking goods for other individuals doing enterprise outside the Philippines, which can be in the end exported and in which the services are paid for in perfect overseas currency and accounted for according with the rules and regulations of the BSP.
– Services rendered by way of contractors in processing, converting or production goods for an corporation whose export income exceeds 70 percentage of total annual production.
The abovementioned export income will be subject to twelve-percentage VAT as soon as these situations occur:
– The status quo and implementation of an enhanced VAT refund gadget that grants and will pay refunds of creditable enter tax within ninety days from the submitting of the VAT refund software with the Bureau of Internal Revenue (BIR).
– All pending VAT refund claims as of Dec. 31, 2017 will be fully paid in cash by Dec. 31, 2019.
For this motive, the Department of Finance shall establish a VAT Refund Center inside the BIR and in the Bureau of Customs to system and grant coins refunds of creditable enter tax.
For this motive, RR 26-2018 clarified that the ninety-day duration provided to the BIR to procedure the claims for refund for creditable enter tax shall start from the submitting of the declare up to the discharge of the payment of the refund.
In addition, the declare is taken into consideration to had been filed handiest after the taxpayer submits the official receipts/invoices and other documents to assist his or her software.
If the 90 days lapse without the refund launched to the taxpayer, the declare can also nonetheless be processed administratively. Any BIR worker who fails to act at the declare within ninety days shall, upon conviction, be fined and imprisoned, and additionally be completely disqualified from retaining public workplace, vote casting and taking part in any election.
The amendments delivered by RR 26-2018 shall follow to claims for refund filed upon the efficiency of RR 13-2018.