Reference: Taxes for Exporters

Taxes for Exporters

I'm a local manufacturer of garments and I'm planning on exporting them. I read that importers are required to pay value-added tax (VAT) even if they are below the threshold. Are exporters similar? Have there also been any changes under the Tax Reform for Acceleration and Inclusion (TRAIN) law?

Unlike importers, there is no fixed VAT on exported goods and it is still dependent on annual gross sales. Exporters are only subject to VAT if they exceed the P3-million threshold.

However, for those who are required to pay VAT, there have been changes under the TRAIN law.

Some types of sales which are currently zero-rated will be considered export sales subject to 12% VAT upon the establishment of an enhanced VAT refund system.

The affected export sales are:

What is the difference between zero-rated sales and VAT exemption?

VAT-exempt taxpayers or those not VAT-registered are not eligible to claim input VAT. However, for zero-rated sales, they are. Under Section 112 of the Tax Code, taxpayers with zero-rated sales may apply for the issuance of a tax credit certificate within two years after the close of the taxable quarter.

Under the TRAIN law, the application for refund of input taxes should be granted by the Bureau of Internal Revenue (BIR) within 90 days. In case the claim is denied partially or in full, the taxpayer may raise the case to the Court of Tax Appeals within 30 days.

If the BIR does not grant the application within the 90-day period, the involved BIR agent will be punished by a fine of P50,000 to P100,000 and imprisonment of 10 to 15 years.

Source link: https://www.rappler.com/business/215661-ask-the-tax-whiz-taxes-for-exporters

Reference: Rev. Reg. No. 13-2018