RR No. 25-2018 — Pre cribe the regulation implementing VAT exemption on the ale of drug and medicine pre cibed for diabete , high chole terol and hyperten ion provided under the TRAIN Law (Publi hed in Manila Time on December 28, 2018) Dige t | Full Text

r.lrfl HUE fn\ffiI_N BUREAU OF INTERNAL REVENuE OF T'IIE PI_IILIPPINES f O: olq A:u iFr L+[ltr* N4i]NT OF FINANCE ruffilU DEC 2? INTERNAt. R.EVF]NLIE RECORDS MGT. ezon City U[\] iil.\\7.,ir December 21, 2018 REVENUE REGULATIONS NO. e5 - AolS SUBJECT : Regulations Implementing Section 109 (AA) of the National Internal Revenue Code (NIRC) of 1997, as amended, Pursuant to Section 34 of the Reputrlic Act (RA) No. 10963 or the "Tax Reform for Acceleration and Inclusion (TRAIN Law)" Providing for Value-Added Tax (VAT) Exemption on the Sale of Drugs and Medicines Prescribed for Diabetes, High Cholesterol and Hypertension TO : Aii Internal Revenue Officials, Employees and Others Concerned l. - SECTION SCOPE. Pursuant to the provisions of Sections 244 and 245 of the National Internal Revenue Code of 1997 (Tax Code), as amended, and Section 84 of Republic Act (R.A) No. 10963 otherwise known as the "Tax Reform for Acceleration and Inclusion (TRAIN Law), these Reguiations are hereby promulgated to implement Section 109 (AA) of the Tax Code, as amended by the TRAIN Law, and prescribe the guidelines for: L The VAT exemption on sale of drugs and medicines prescribed for the treatment and/or prevention of diabetes, high cholesterol and hypertension; and 2. The identification of drugs and medicines entitled to exemption from VAT. SECTION 2. SCOPE. - The exemption from VAT provided herein shall apply to the sale by manufacturers, distributors, wholesalers and retailers of drugs and medicines prescribed for the treatment and/or prevention of diabetes, high-cholesterol and hypertension starting January 1,2019. The irnporlation of the above-described drugs and medicines shallbe subject to VAT under Section 107 of the Tax Code. as arnended. For this purpose, the "List of VAT-exempt Diabetes. High-Cholesterol and Hl,pertension Drugs" as identified and published by the Food and Drug Authority (FDA), shall be posted in the BIR Website thru a Revenue Memorandum Circular. Any update, such as registration of new and/or additional drugs and medicines. as rvell as de-registration of,those previously published by the FDA, shall likewise be posted in the BIR Website. The sale of drugs not included in the List of VAT-exempt Diabetes, High-Cholesterol the FDA shall be subject to and .by VA'f. Hypertension Drugs pubiished SECTION 3. ISSUANCE O"\F'AVTA-ETX-EEXivEiMPlP"TsirINaiVl pOrIoCnEiin. e-nItnil accordance r.vith the rhe invoicing rcquirentenls, lhe iiord be indicated in invoice issLred for the sale of drugs and prescribed for the treatment and prevention oldiabetes. high-cholesterol and hypeftension. SECTION 4. HANDLING OF COMPLAINTS. - Complaints for non-cornpliance and violation of these regulations shall be forwarded to handling andlor dissemination to the concerned BIR Office.

Reventte Re gttlations No. SECTION 5. PENALTIES AND OTHER SANCTIONS. - Notwithstanding other penalties which may be imposed for violation/s of specific regulations" any person who violates any provision of these Regulations shall, in addition to the tax required to be paid, if there is any, upon conviction for each act or omission, be punished by a fine of not more than One Thousand Pesos (P1,000) or suffer imprisonment of not more than six (6) months, or both, pursuant to Section 275 of the Tax Code, as amended. SECTION 6. REVENUE DATA REPORT. - For purposes of submission, the duly validated revenue data report on the sale of drugs and rnedicines prescribed for the treatment of diabetes, high cholesterol and hypertension shall be submitted to Deparlment of Finance (DOF). - SECTION 7. REPEALING CLAUSE. Any rules and regulations, issuances or parts thereof inconsistent with the provisions of these Regulations are hereby repealed, amended or modifieci accordingly. - SECTION 8. SEPARABILITY CLAUSE. If any of the provisions of these regulations is subsequently declared unconstitutional, the validity of the remaining provisions hereof shall remain in full force and effect. SECTION 9. EFFECTIVITY. - These Regulations shall take effect beginning January 1,2019. Recommending Approval: Secretary of Finance -NCAaE^SA\R'^R.qDU^L?AY Dic'? 1 ?t18 Commissioner of Internal Revenue EUREAU OF INTERNAL REVENue 0219 g 4 lLp]ftffi)fAil|) RECORDS MCI, DJ