UPDATE: 19 August 2021: this measure has been suspended due to the ongoing effects of the COVID-19 pandemic.
The Philippines has introduced from 27 June 2021 a new 12% Value Added Tax (VAT) on certain exports. Previously, exports on the affected transactions were zero-rated with the right to deduct any input VAT.
Which supplies subject to Philippines export VAT?
The following supplies are now liable to 12% export VAT:
- Raw materials and packaging items
- outsourced services, such as manufacturing, processing, or the repacking of goods to be exported.
- The manufacturing, processing, or repacking of goods for persons or entity that is doing business outside of the Philippines, and the said goods are subsequently exported; and
- Services performed by contractors and/or subcontractors in the manufacturing, processing, or converting of goods for an entity whose export sales exceed 70 percent of its annual total production.
You can verify any global VAT and GST rates via VAT Calc’s global rate searchable database.