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Zero VAT on sales to PEZA firms to stay

Zero VAT on sales to PEZA firms to stay

MANILA: The sale of goods and services to Philippine Economic Zone Authority (PEZA) entities will remain subject to zero percent value added tax, clearing a confusion over President Duterte’s line veto of zero VAT rating on the sale of goods and services to separate customs territories under the TRAIN Law.

The Philippine Exporters Confederation Inc. (Philexport) said PEZA issued a memorandum circular last month to reiterate that there is “status quo on the VAT zero-rating incentive on sales of goods/services to customs territory.”

The circular dated March 12 was addressed to all zone administrators and managers as well as PEZA-registered enterprises, according to the export group.

The DOF has informed PEZA that the TRAIN Law does not affect the current zero rating of sales of good and services to PEZA locators.

“The veto on certain provisions of the TRAIN Law, specifically the provision on the zero-rating of sales of goods/service to separate customs territory has caused uncertainties and serious concern on the part of PEZA locators. With some local suppliers already incorporating the VAT in their sales of goods/services to ecozone customers. PEZA sought clarification from the Department of Finance as to whether the said veto applies to PEZA locators,” the memorandum circular stated.