Updated VAT Rules for RBEs: What RR No. 001-2026 Means for Businesses

The Department of Finance and the Bureau of Internal Revenue (BIR) has promulgated Revenue Regulations (RR) No. 001-2026, amending RR No. 9-2025. The Regulations clarify the filing and payment procedures for value-added tax (“VAT”) on local sales, introduce optional VAT registration for certain Registered Business Enterprises (“RBEs”), and extend deadlines for invoicing system compliance.

For purchases of goods from economic zones or freeports, the filing and payment of “VAT on B2B local sales by RBEs” must now be made on a per-transaction basis. Pending the issuance of a dedicated form, BIR Form No. 0605 shall be used and must be transmitted to the RBE prior to the release of goods from the zone. In cases involving bulk shipments covered by multiple invoices, buyers may opt to make a single payment, provided that a complete list of invoices is submitted to the Bureau of Customs before release.

VAT-registered Domestic Market Enterprises (DMEs) that do not qualify for VAT zero-rating or importation exemptions are excluded from the rule requiring buyers to remit VAT and must instead comply with standard VAT filing and payment obligations. The exclusions also cover VAT zero-rated and VAT-exempt transactions, as well as certain entities registered under special laws that are not availing of incentives. In addition, local sales by RBEs involving non-registered activities remain subject to the regular 12% VAT.This issuance requires RBEs using registered invoicing systems or software (e.g., Computerized Books of Accounts Cash Register Machines/Point-of-Sales (CRM/POS), Computerized Accounting System (CAS), etc.) to reconfigure/rename their system by changing/renaming the term “VAT/VAT Amount” in the breakdown of sales with “VAT on Local Sales,” or adding the same in case the “VAT/VAT Amount” is not applicable. The deadline for RBEs to reconfigure or rename their invoicing systems has been extended to 31 December 2026. The Commissioner of Internal Revenue retains the authority to grant further extensions, if warranted.