RMC No. 53-2023 — Provides clarifications on the entitlement of economic zone developers and operators to the Value-Added Tax (VAT) zero-rating on local purchases of goods and services directly and exclusively used in the registered project or activity Digest | Full Text | BOI MC No. 2022-003

BUREAU OF INTERNAL REV BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BIR National Office Building Atlit- ezon City BUREAU OF INTERNAL REVENUE NNTYN MAY 11 2023 U D: 3O hm

INTERNAL COMMUNICATIONS DIVISION SINS7YXS MAY 11 6323 RECOrdS MGt.DIVISION[ 10eIV JU

IUUUi MAY 1.1 2023

REVENUE MEMORANDUM CIRCULAR NO.53 - 2023

SUBJECT: Provides Clarifications on the Entitlement of Economic Zone Developers and Operators to the Value-Added Tax (VAT) Zero-Rating on Local Registered Project or Activity / Purchases of Goods and Services Directly and Exclusively Used in the

TO: All Internal Revenue Officers and Others Concerned

Investment Priorities Plan (IPP), also known as the transitional Strategic Investment Priority Board of Investments (BOi) Memorandum Circular (MC) No. 2022-003 dated 01 June 2022. which amended the Specific Guidelines of Activities in Support of Exporters under the 2020 PIan (SIPP). For the information and guidance of all concerned, attached herewith is the copy of the

zones; and industrial parks and buildings for exporters, as "Activities in Support of Exporters" to wit: The aforementioned BOI MC included the development and operation of economic

"HI. EXPORT ACTIVITIES

XXX

3. Activities in Support of Exporters

XXX

f. Development and Operation of Economic Zones; and industrial parks and Buildings for Exporters

therein. industrial parks within export or Freeport zones with integrated facilities for export-oriented enterprises. industrial parks shall have infrastructure such as paved roads, power pollution control infrastructure/facilities needed for the operation of exporters located This covers the development and operation of economic zones, and system, water supply, drainage system, sewerage treatment facilities. systems,communication facilities,and other Economic zones and

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This also covers the development and management of new buildings located outside NCR, declared as an economic zone or within export or Freeport zones, with a minimum contiguous land area of 10.000 square meters with the following features:

High-speed fiber-optic telecommunication backbone and high-speed international gateway facility or wide-area network

that may become available in the future: (WAN); or any high-speed data telecommunication system

Computer security and building monitoring and maintenance systems (e.g., computer firewalls, encryption technology, Clean', uninterruptible power supply: fluctuation controls, etc.); and Any other requirements as may be determined by the Board of the concerned IPAs.

At least seventy percent (70%) of the leasable/saleable areas shall be dedicated to exporters?.

Revenues arising from clients/tenants engaged in activities that are not allowed pursuant to the definition of a registered business enterprise under Section 293(M) of the CREATE Act will not be entitled to the ITH incentive.

years unless otherwise approved by the Board of the concerned IPA. Phased development of an economic zone or industrial park may be allowed, provided the whole project is completed within five (5)

These amendments shall apply to all projects qualified under CREATE Act.

is electricity using alternating current (AC) that oscillates at a perfect 60 Hz with no noise or distortion in the line showing the current's frequency (a perfect sine wave) which are, in turn called, dirty power supply or polluted power. Footnotes: 1 Clean power supply is electrical power that is free from voltage spikes and drops. It Voltage ripple or power supply noise that is outside of the ideal sinusoidal waveform.

defined under Sec. 3(e) of the FIA (Foreign Investments Act), as amended. 2 For IPA-registered business enterprises (RBEs) this means exporting at least 70% of its total production/service as defined under Sec. 293(E) of the CREATE Act. For non-IPA registered enterprises this means exporting at least 60% of its output as

enterprise if it meets the qualifications stated above, in which case, it shall also be entitled to the VAT incentives under the CREATE Act. Based on the foregoing, the ecozone developer and operator may be classified as export

under Iitem D(I)(8)(i) of the General Policies and Specific Guidelines to Implement the 2020 guidelines, the ecozone developer or operator will be classified as a domestic market enterprise On the other hand, in case an enterprise is not qualified based on the amended

IPP which covers the development of domestic industrial zones, as circularized by the BOI thru Memorandum Circular No. 2021-001. Consequently, it shall not be entitled to the VAT incentives under the CREATE Act. BUREAU OF INTERNAL REVENUE aNTIT MAY 11"2023 } 10:31 Bm Page 2 of 3

RECOrDS MGt. DIVISICN A

All revenue issuances and BIR Rulings inconsistent herewith are hereby considered amended, modified, or revoked accordingly.

possible. All revenue officials concerned are enjoined to give this Circular as wide a publicity as

This Circular takes effect immediately.

I-2/ies Commssioner of Internal Revenue 007461 UMAGL, JR.

BUREAU OF TNTERNAI REVENUE I0-30 7 'MAY 11 2023 TEH

RECORDS MGT.UIVISIUN GTT

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