Reporting Sales to PEZA-Registered Export Enterprises in Your RELIEF SLSP

A local supplier reports a zero-rated sale to a PEZA-registered export enterprise on the RELIEF Summary List of Sales the same way it reports any other sale — buyer TIN, business name, and gross amount — except the line carries no output VAT, and that treatment now stands or falls on a VAT Zero-Rating Certification issued by the buyer’s investment promotion agency (IPA) rather than a BIR-approved application. Revenue Regulations (RR) No. 3-2023 removed the old prior-approval step; it did not remove the documentation requirement.

What changed under RR No. 3-2023? #

RR No. 3-2023 amended Sections 4.106-5 and 4.108-5 of RR No. 16-2005 (as amended by RR No. 21-2021) to drop the requirement that a local supplier apply to the BIR for approval before zero-rating a sale to a registered export enterprise. Multiple tax advisory firms that reviewed the regulation describe the same mechanic: zero-rating on local purchases is now based on the VAT Zero-Rating Certification the buyer’s IPA — PEZA, for most ecozone locators — issues to that buyer, and the local supplier relies on that certificate instead of filing anything with the BIR up front.

“The availment of the VAT zero-rating on local purchases shall be based on the VAT-zero rating certification issued by the concerned IPA, subject to the post audit verification of the BIR.”

That sentence, reported consistently across secondary summaries of RR No. 3-2023, is the operative rule: no prior BIR approval, but the BIR keeps the right to review the certification and the underlying transaction later. The BIR’s own PDF for RR No. 3-2023 was not directly reachable from this research environment (bir-cdn.bir.gov.ph and www.bir.gov.ph did not resolve), so this wording is corroborated across independent secondary reporting rather than quoted from the regulation’s original text — confirm the exact section wording on the BIR’s site before relying on it for a specific filing position.

Does every sale to an ecozone buyer qualify? #

No — only goods and services directly and exclusively used in the buyer’s BIR- and IPA-registered project or activity qualify for the zero rate, and Revenue Memorandum Circular (RMC) No. 24-2022 cut off the older, broader reading of the cross-border doctrine that used to treat an entire ecozone as foreign territory for VAT purposes. Before CREATE, suppliers often treated any sale delivered into a PEZA zone as automatically zero-rated on that theory. RMC No. 24-2022 closed that door for goods:

The cross-border doctrine, as applied to economic zones or freeport zones, has been rendered ineffectual and inoperative for value-added tax purposes.

A purchase that isn’t directly and exclusively tied to the buyer’s registered activity — several secondary summaries list categories like janitorial, security, financial, and marketing or promotion services as examples the BIR treats as not meeting that test — falls outside zero-rating and is subject to the regular 12% VAT instead, regardless of the buyer’s PEZA status. Services are a separate track: the Supreme Court’s Toshiba ruling zero-rates a sale of services to a PEZA-registered enterprise under Section 108(B)(3) of the Tax Code on its own terms, independent of the cross-border doctrine’s demise for goods.

Worked example: an electronics component supplier #

Consider a Cavite-based supplier of circuit boards that sells ₱2,400,000 worth of components in Q4 2026 to a PEZA-registered semiconductor exporter, where the components go directly into the buyer’s registered manufacturing line.

1. Before invoicing, the supplier secures a copy of the buyer’s current VAT Zero-Rating Certification from the buyer’s IPA (PEZA), confirming the registered activity the certification covers and that it is still valid for the period of the sale.
2. The supplier issues a VAT invoice reflecting ₱2,400,000 at 0% VAT, noting the zero-rating basis (the buyer’s IPA certification) on the invoice or in supporting records, rather than computing ₱288,000 in output VAT.
3. On the RELIEF Summary List of Sales for Q4 2026, the supplier reports the buyer’s TIN, registered name, and the ₱2,400,000 gross amount as a zero-rated sale — no output VAT column entry.
4. On BIR Form 2550Q, the ₱2,400,000 flows into the zero-rated sales line, so the SLSP total and the return’s zero-rated sales figure agree.
5. The supplier keeps the IPA certification on file for as long as the three-year (or longer, if under audit) prescriptive period runs, since RR No. 3-2023’s post-audit review means the BIR can ask for it well after the sale.

If the same supplier instead sold ₱500,000 of office supplies to the same buyer’s PEZA-registered administrative office — not directly tied to the registered manufacturing activity — the safer position is to charge the regular 12% VAT on that portion, because it does not meet the “directly and exclusively used” test RMC No. 24-2022 and RR No. 3-2023 apply.

What if the certification is missing or the test isn’t met? #

A supplier that zero-rates a sale without the IPA certification, or where the purchase doesn’t meet the directly-and-exclusively-used test, is carrying an exposure that a BIR post-audit can convert into a deficiency output VAT assessment — plus surcharge and interest under Section 248 and 249 of the Tax Code — even though no VAT was ever collected from the buyer. Because RR No. 3-2023 shifted the checkpoint from “BIR approval before the sale” to “BIR verification after the sale,” the supplier, not the buyer, bears the practical risk of an incomplete file. Treat the certification the same way you’d treat any other input to your RELIEF SLSP and VAT return: collected before you file, not chased down after an audit notice arrives.

For the underlying mechanics of the SLSP itself, see What Is RELIEF SLSP? and RELIEF SLSP: Zero-Rated and Exempt Sales; for how this interacts with the VAT return itself, see RELIEF SLSP vs. VAT Return Reconciliation.

Frequently Asked Questions #

Do I still need BIR approval to zero-rate a sale to a PEZA-registered buyer? #

No, not since RR No. 3-2023. A local supplier no longer applies to the BIR for prior approval of VAT zero-rating on sales to a registered export enterprise. The sale is zero-rated on the strength of the VAT Zero-Rating Certification the buyer obtains from its investment promotion agency (such as PEZA), subject to the BIR’s post-audit verification.

How do I report a PEZA zero-rated sale in my RELIEF SLSP? #

Report it on the Summary List of Sales as a zero-rated sale, with the buyer’s TIN, business name, and the gross sales amount, the same as any other VAT transaction on the SLSP — the zero-rating simply means no output VAT is computed on that line, so your SLSP and your BIR Form 2550Q zero-rated sales figure must tie out.

What if my PEZA buyer never gives me a VAT Zero-Rating Certification? #

Without that certification on file, you have no documentary support for treating the sale as zero-rated, and the BIR’s post-audit review under RR No. 3-2023 can reclassify it as a regular 12% VAT sale — exposing you to deficiency output VAT, surcharge, and interest even though you never collected VAT from the buyer.

Does the cross-border doctrine still make all sales to ecozones automatically zero-rated? #

No. RMC No. 24-2022 confirmed that the cross-border doctrine, as applied to ecozones and freeports, has been rendered ineffectual and inoperative for VAT purposes under the CREATE Act. Only goods and services directly and exclusively used in the buyer’s registered project or activity qualify for zero-rating — not every sale to a PEZA locator automatically qualifies.

Are sales of services to PEZA enterprises treated the same way as sales of goods? #

They share the same documentary logic under RR No. 3-2023, but the legal basis differs: the Supreme Court’s Toshiba ruling held that a sale of services to a PEZA-registered enterprise is zero-rated under Section 108(B)(3) of the Tax Code independent of the cross-border doctrine, while zero-rating for goods now rests on the “directly and exclusively used” test and the IPA certification.

Summary #

RR No. 3-2023 replaced BIR prior approval with an IPA-issued VAT Zero-Rating Certification as the basis for zero-rating local sales to PEZA-registered export enterprises, but RMC No. 24-2022 narrowed what actually qualifies — only purchases directly and exclusively used in the buyer’s registered activity, not every delivery into an ecozone. Report the sale as zero-rated on your RELIEF SLSP only when both the certification and the use test are satisfied, and keep that certification on file for as long as a BIR post-audit review can reach back.