RMC No. 96-2026: VAT Refund Relief for Export-Oriented Enterprises Before Their Zero-Rating Certificate

Revenue Memorandum Circular (RMC) No. 96-2026, issued by BIR Commissioner Charlito Martin Mendoza on September 7, 2026, clarifies that a qualified Export-Oriented Enterprise (EOE) may claim a VAT refund on input VAT passed on to it for local purchases and importations attributable to its zero-rated export sales, covering the period from November 28, 2024 until the date the EOE actually received its VAT zero-rating certification from the DTI’s Export Marketing Bureau (DTI-EMB). The circular amends the transition guidance under RMC No. 37-2025 and closes a gap that had left many exporters holding unrecoverable input VAT.

Why a “gap period” existed in the first place #

The CREATE MORE Act (Republic Act No. 12066) took effect on November 28, 2024, and immediately extended VAT zero-rating to local purchases and importations directly attributable to a qualified export enterprise’s registered export activity. But zero-rating on paper isn’t the same as zero-rating in practice: an EOE only gets to invoice its local suppliers at 0% once it can show a valid DTI-EMB VAT zero-rating certification, and DTI-EMB issued those certifications to different enterprises on different dates well after the law’s effectivity date. Any EOE that had not yet received its certification kept paying the standard 12% VAT on local purchases and importations tied to its export activity, even though the law said those purchases should have qualified for zero-rating from day one.

What RMC No. 96-2026 actually clarifies #

RMC No. 96-2026 gives EOEs a defined, BIR-recognized basis to recover that 12% VAT as a refund rather than treating it as a sunk cost, for the specific window between CREATE MORE’s effectivity and the enterprise’s own certification date. Independent reporting on the circular — corroborated across Philstar, BusinessWorld, the Philippine News Agency, the Daily Tribune, thephilbiznews, VATupdate, and the Daily Guardian — describes it as amending the transition rules the BIR first laid out in RMC No. 37-2025, specifically to address EOEs caught in this certification lag.

To qualify for the refund under RMC No. 96-2026, an EOE generally needs to show that it:

1. Was recognized as an export-oriented enterprise, meeting the 70% export-sales threshold that defines that status.
2. Paid VAT on local purchases or importations that were directly attributable to its zero-rated export sales, incurred on or after November 28, 2024.
3. Secured its DTI-EMB VAT zero-rating certification within the prescribed transition period, which ended December 31, 2025.
4. Is claiming only for the window before it actually received that certification — once certified, the enterprise should already be transacting at 0% VAT going forward, not filing refund claims.

This session could not independently fetch the primary text of RMC No. 96-2026 or RMC No. 37-2025 from the BIR site (network policy blocks direct access to bir.gov.ph in this environment), so the specific mechanics above reflect the corroborated secondary reporting rather than a verbatim reading of the circular itself. Businesses relying on this for a filing position should pull the actual circular text from the BIR before submitting a claim.

The legal basis: Section 112(A) refunds and CREATE MORE’s zero-rating expansion #

The refund mechanism RMC No. 96-2026 activates isn’t new — it runs through Section 112(A) of the National Internal Revenue Code (NIRC), the long-standing provision that lets a VAT-registered person whose sales are zero-rated apply for a refund or tax credit of input VAT attributable to those sales, filed within two years after the close of the taxable quarter when the sales were made. What RMC No. 96-2026 adds is not a new refund right, but clarity on which input VAT an EOE can point to: purchases and importations made during the gap between CREATE MORE’s effectivity and the enterprise’s own certification date, provided the enterprise ultimately qualified within the transition window that closed on December 31, 2025.

The zero-rated export sales that anchor this refund claim are themselves defined in the NIRC’s export provisions. The core statutory language for a direct export sale of goods reads:

“The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported[,] paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the [Bangko Sentral ng Pilipinas].”

— NIRC Section 106(A)(2)(a), as reproduced in BIR implementing regulations

It is the input VAT attributable to sales that meet this definition — not just any local purchase an EOE makes — that RMC No. 96-2026’s gap-period refund covers.

A worked example: five months of unrecoverable-looking input VAT #

Suppose Luzon Circuit Components Inc., an electronics parts manufacturer that exports more than 70% of its output to buyers in Japan and South Korea, had already been operating as an export-oriented enterprise when CREATE MORE took effect on November 28, 2024. Luzon Circuit’s DTI-EMB zero-rating certification, however, was not actually issued until June 2025 — a common lag given how many enterprises applied around the same time.

For the roughly five months between November 28, 2024 and its June 2025 certification, Luzon Circuit paid 12% VAT on local packaging materials directly used in producing goods it then exported at 0%. Before RMC No. 96-2026, that input VAT sat in an uncertain position — arguably attributable to a zero-rated activity, but without a BIR circular squarely addressing purchases made before the certificate existed. RMC No. 96-2026 gives Luzon Circuit a defined basis to file a Section 112(A) refund claim for that five-month window, provided it substantiates the purchases with valid invoices, ties them to its export sales, and files within the two-year prescriptive period measured from the close of the relevant taxable quarter.

Summary #

RMC No. 96-2026 closes a real compliance gap: exporters that qualified under CREATE MORE from November 28, 2024 but received their DTI-EMB zero-rating certification later were left paying VAT they arguably shouldn’t have owed, with no clear circular telling them how to get it back. The circular gives qualified Export-Oriented Enterprises a defined refund path for that pre-certification window, anchored in the existing Section 112(A) refund mechanism and the 70% export-ratio and DTI-EMB certification requirements CREATE MORE already put in place. For the certification mechanics behind this rule, see VAT Zero-Rating for Exporters: BIR Requirements Under the EOPT Act and CREATE MORE and VAT Zero-Rating on Indirect Exports; for the certificate wording itself, see RMC No. 71-2025: Why the VAT Zero-Rating Certificate Now Says “Directly Attributable”.