The Bureau of Internal Revenue (BIR) has taken a significant step to streamline tax procedures for export-oriented companies in the Philippines. By issuing a new guideline, the tax agency aims to reduce administrative burdens for businesses that contribute to the country's export economy.
Key Change: Eliminating the Sworn Declaration
On July 2, 2025, the BIR officially released Revenue Memorandum Circular (RMC) No. 66-2025. This circular introduces a major simplification for Registered Business Enterprises (RBEs) when they apply the zero percent Value-Added Tax (VAT) rate on their local purchases of goods and services.
Previously, the process required RBEs to provide their suppliers with two separate documents. The first was a VAT Zero-Rating Certificate issued by their respective Investment Promotion Agency (IPA). The second was a sworn declaration, where the company had to confirm under oath that the purchased items would be used exclusively for export activities.
Under the new rules outlined in RMC No. 66-2025, the sworn declaration is no longer mandatory. The BIR has determined that the VAT Zero-Rating Certificate from the IPA is sufficient on its own. This single document now serves as the primary proof suppliers need to justify applying the zero percent VAT rate to their invoices.
Background and Post-Audit Authority
This regulatory update did not happen in isolation. The BIR clarified that the change follows the earlier issuance of Revenue Regulations (RR) No. 10-2025. The circular also includes a crucial reminder to all businesses: the simplification of the documentary requirement does not mean less scrutiny.
The BIR explicitly stated that it retains its full authority to conduct post-audit checks. Tax officials can still verify that the purchases made under the zero-rated VAT scheme are directly and exclusively used for the RBE's registered project or export activity. Companies must ensure their records are in order to substantiate these claims if reviewed.
Immediate Effect and Repealing Clause
The circular took immediate effect upon its publication on July 2, 2025. There was no waiting period, meaning RBEs and their suppliers could adopt the new, simpler process right away.
Furthermore, RMC No. 66-2025 contains a standard but powerful repealing clause. This clause states that all previous revenue issuances and BIR rulings that conflict with the new circular are hereby amended, modified, or revoked. This ensures legal clarity and prevents confusion between old and new rules.
This move by the BIR is widely seen as a positive development for the business climate. By cutting red tape for qualified exporters, the government hopes to enhance the competitiveness of Philippine-based RBEs, encouraging more investment and supporting the growth of the export sector.
