RMC No. 73-2026 — Tax treatment of activities undertaken pursuant to the Letter of Agreement on narcotics control and law enforcement between the government of the Republic of the Philippines and the government of the United States of America Digest | Full Text

READOFINTERNRAELRVEND REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANC PHILIFPINES Bringing In Revenues BUREAU OF INTERNAL REVENUE for Nation-Building BAGONG PILIPINAS JUL 01 2026 REVENUE MEMORANDUM CIRCULAR NO. 3-2026 SUBJE: Tax Treatment of Activities Undertaken Pursuant to the Letter of Agreement on Narcotics Control and Law Enforcement between the Government ofthe Republic of the Philippines and the Government ofthe United States of America TO: All Internal Revenue Officials, Employees, and Others Concerned SECTION 1. Purpose This Circular defines the coverage and establishes the basis for the application of the value-added tax (VAT) zero-rating or exemption on activities undertaken pursuant to the Letter of Agreement on Narcotics Control and Law Enforcement between the Government ofthe Republic of the Philippines and the Government ofthe United States of America (the LOA). It also sets forth the guidelines for implementing the appropriate VAT treatment on the procurement of goods and services and clarifies the applicable treatment of direct taxes, in accordance with the National Internal Revenue Code of 1997, as amended (Tax Code), and relevant international agreements. SECTION 2. Coverage This Circular covers: a. the tax treatment of the Covered Transactions made by the United States Govemment (USG) or its implementing partners; and b. the applicable treatment of direct and indirect taxes on Implementing Partners and USG personnel engaged in the implementation of the Covered Program. SECTION 3. Definition of Terms For purposes ofthis Circular, the following terms shall be defined as follows: a. Contractor - refers to any natural or juridical person, whether domestic or foreign, engaged by the USG or its implementing office under a contract to perform specific BRUECROERADUSOMFANINATGEERMNEANLTRDEIVVIESNIUONE 1 R JUB4ationa Of ce Bldg., Senator Miriam Defensor-Santiago Avenue, Dillman, Quezon City BY: Website: www.blr.gov.ph Trunkline: 8981-7000; 8929-7676 ADMIN UNITTI-ME1: 4.00m 00000367