SALE OF HOUSE AND LOT AND OTHER RESIDENTIAL DWELLINGS IS EXEMPT FROM VAT FOR SELLING PRICE NOT EXCEEDING P3,199,200.00 DESPITE THE TRAIN LAW; AUTHORITY TO RELEASE IMPORTED GOODS SHALL NO LONGER BE ISSUED FOR COVID-19 EQUIPMENT.

The BIR amended certain provisions of RR No. 4-2021, which implemented the VAT and Percentage Tax provisions under RA No. 11534 (CREATE Act) (Revenue Regulations No. 8-2021, June 11, 2021)

Transaction	Amendments
Sale of house and lot and other residential dwellings	Exempt from VAT for selling price not exceeding P3,199,200.00
Release of the following imported items: Capital equipment, its spare parts and raw materials, necessary for the production of personal protective equipment components such as coveralls, gown, surgical cap, surgical mask, n-95 mask, scrub suits, goggles and face shield, double or surgical gloves, dedicated shoes and covers, for COVID-19 prevention All drugs, vaccines, and medical devices specifically prescribed and directly used for the treatment of COVID-19; and Drugs for the treatment of COVID-19 approved by the Food and Drug Administration (FDA) for use in clinical trials, including raw materials directly necessary for the production of such drugs.	The importation shall not be subject to the issuance of the Authority to Release Imported Goods (ATRIG) under Revenue Memorandum Order No. 35-2002
Overpayment of taxes as result of decrease of tax rate from 3% to 1%	Percentage taxpayers who have overpaid taxes as a result of the decrease of tax rate from 3% to 1% starting July 1, 2020 until the effectivity of RR No. 4-2021 are allowed for a tax refund in the event that: The taxpayer shifted from Non-VAT to VAT-registered status; or The taxpayer has opted to avail of the 8% income tax rate at the beginning of TY 2021

TRANSACTIONS NOW SUBJECT TO VAT: SALE OF RAW MATERIALS TO NONRESIDENT BUYER, RAW MATERIALS OR PACKAGING MATERIALS TO EXPORT ORIENTED ENTERPRISE AND SALES UNDER EXECUTIVE ORDER NO. 226, PROCESSING, MANUFACTURING OR REPACKAGING GOODS FOR PERSONS DOING BUSINESS OUTSIDE THE PHILIPPINES.

The BIR amends certain provisions of RR No. 16-2005, as amended by RR No. 13-2018 and as further amended by RR No. 26-2018, to implement the imposition of 12% VAT on transactions covered under Section 106 (A)(2)(a) subparagraphs (3), (4), and (5), and Section 108(B) subparagraphs (1) and (5) of the NIRC of 1997, as amended by RA No. 10963 (TRAIN Law) (RR No. 9-2021, June 11, 2021)

Transactions that are now subject to 12%

Transactions considered as export sales:

Sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer’s goods and paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)
Sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production
Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special law

The sale of sale of services and use or lease of properties

Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)
Services performed by subcontractors and/or contractors in processing, converting or manufacturing goods for an enterprise whose export sales exceed 70% of the total annual production

BIR RULINGS

Sale executed by landowners in favor of the municipal government to be used for socialized housing project (449 housing units) under the National Housing Authority Yolanda Permanent Housing Program is not subject to creditable withholding tax/capital gains tax and VAT but subject to documentary stamp tax based on actual consideration of the property. Certificate Authorizing Registration is required to be issued. A lien on the titles of the land shall be annotated to the effect that the same are to be applied or are being applied to a socialized housing project. (Certificate of Tax Exemption No. PSH-006-21 January 18, 2021; see also Certificate of Tax Exemption No. PSH-007-21, January 18, 2021 and Certificate of Tax Exemption No. JV-009-21, January 27, 2021, Certificate of Tax Exemption No. NSH-011-21, February 2, 2021)

When assets are abandoned or discarded because the continued use is no longer beneficial to the business, the related loss may be claimed as deduction. The remaining book value of the property which had become obsolete and which will eventually be dismantled shall be allowed as deduction for income tax purposes when the facility is demolished. However, while obsolescence is, by nature, allowed as a deduction, the determination of the factual case leading to the determination of whether or not there is obsolescence is a factual issue beyond the jurisdiction of a ruling to confirm (BIR Ruling No. OT-008-21, January 21, 2021)

The BIR cannot issue a determinative ruling on a matter if the issue is still subject of an on-going audit/administrative protest, which is considered a “Non-Ruling Area” (BIR Ruling No. OT-010-21, February 1, 2021)

SALE OF HOUSE AND LOT AND OTHER RESIDENTIAL DWELLINGS IS EXEMPT FROM VAT FOR SELLING PRICE NOT EXCEEDING P3,199,200.00 DESPITE THE TRAIN LAW; AUTHORITY TO RELEASE IMPORTED GOODS SHALL NO LONGER BE ISSUED FOR COVID-19 EQUIPMENT.

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