REVENUE MEMORANDUM CIRCULAR NO. 135-2024 issued on December 18, 2024, circularizes Republic Act No. 12066, titled “An Act Amending Sections 27, 28, 32, 34, 57, 106, 108, 109, 112, 135, 237, 237-A, 269, 292, 293, 294, 295, 296, 297, 300, 301, 308, 309, 310, and 311, and Adding New Sections 135-A, 295-A, 296-A, and 297-A of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes”.

The following provisions of the National Internal Revenue Code (NIRC) of 1997, as amended, are further amended:

i. Section 27 – Rates of Income Tax on Domestic Corporations

ii. Section 28 – Rates of Income Tax on Foreign Corporations

iii. Section 32 – Gross Income, particularly Income Exempt under Treaty

iv. Section 34 – Deductions from Gross Income

v. Section 57 – Withholding of Tax at Source

vi. Section 106 – Value-Added Tax on Sale of Goods or Properties

vii. Section 108 – Value-added Tax on Sale of Services and Use or Lease of Properties

viii. Section 109 – Exempt Transactions

ix. Section 112 – Refunds or Tax Credits of Input Tax

x. Section 135 – Petroleum Products Sold to International Carriers and Exempt Entities or Agencies

xi. Section 237 – Issuance of Invoices

xii. Section 237-A – Electronic Sales Reporting System

xiii. Section 269 – Violations Committed by Government Enforcement Officers

xiv. Section 292 – Extent of Authority to Grant Tax Incentives

xv. Section 293 – Definitions

xvi. Section 294 – Incentives

xvii. Section 295 – Conditions of Availment

xviii. Section 296 – Period of Availment of Incentives for Projects or Activities Approved by the Investment Promotion Agencies

xix. Section 297 – Expanded Functions of the Fiscal Incentives Review Board

xx. Section 300 – Strategic Investment Priority Plan

xxi. Section 301 – Power of the President to Grant Incentives

xxii. Section 308 – Penalties for Noncompliance with Filing and Reportorial Requirements

xxiii. Section 309 – Prohibition on Registered Activities

xxiv. Section 310 – Establishment of One-Stop Action Center and Initial Point of Contact for Foreign Investment Leads

xxv. Section 311 – Investments Prior to the Effectivity of RA Act 11534

The following new sections were added to the NIRC of 1997, as amended:

i. Section 135-A – Refund of Excise Tax on Petroleum Products

ii. Section 295-A – Registered Business Enterprises Taxpayer Service

iii. Section 296-A – Period of Availment of Incentives for Projects or Activities Approved by the Fiscal Incentives Review Board

iv. Section 297-A – Processing of Tax Incentive Applications

The Secretary of Finance shall immediately include in the Department’s program the operationalization of the electronic processing of the VAT refund system, the funding of which shall be included in the annual General Appropriations Act.

The following provisions shall apply prospectively to projects or activities granted with tax incentives under Republic Act No. 11534 upon the effectivity of this Act:

i. The exemption from national and local taxes, including local fees and charges for projects or activities availing of SCIT pursuant to Section 294(B) of Title XIII;

ii. The availment of additional enhanced deductions provided under Section 294(C)(6), (7), (8), and (9) of Title XIII;

iii. The imposition of twenty percent (20%) income tax rate specified in Sections 27 and 28 of this Code upon the taxable income of RBEs availing the enhanced deduction regime;

iv. The imposition of RBE local tax under Section 294(F) of Title XIII, to RBEs availing of ITH or EDR; and

v. The conditions for the availment of the duty and VAT exemption on importation and VAT zero-rating on local purchases under Sections 295(C) and (D) of Title

No tax refund or credit shall be granted to RBEs covered by Section 19 of this Act.