REVENUE MEMORANDUM CIRCULAR NO. 53-2025 issued on June 4, 2025 circularizes the Implementing Rules and Regulations (IRR) of Republic Act (R.A.) No.12079, titled “An Act Creating a VAT Refund Mechanism for Non-Resident Tourists, Adding a New Section 112-A to the National Internal Revenue Code of 1997, as Amended, for the Purpose”.

The IRR shall apply to the Value-Added Tax (VAT) refund claims of tourists visiting the Philippines on their local purchases of eligible goods from duly accredited stores. A tourist shall be eligible to receive a refund of the VAT paid on purchased goods
if the following requirements are met:

a. The goods are purchased in person by the tourist from duly accredited stores;

b. The goods are physically taken out of the Philippines by the tourist as accompanied baggage, within sixty (60) days from the date of purchase; and

c. The value of the goods purchased per single transaction is equivalent to at least Three Thousand Pesos (₱3,000.00) covered by a single invoice: Provided, That the amount shall be adjusted using the cumulative inflation for the past three (3) years as published by the Philippine Statistics Authority (PSA).

Filipinos with dual citizenship shall be eligible to avail a VAT refund if they use their foreign passport in entering and exiting the Philippines and they fall under the definition of “tourist” in this IRR.

Sales to citizens and residents of the Philippines, and foreign nationals residing in the country (e.g., diplomats, consular officers, expatriates, and VAT-exempt foreign nationals) are not eligible for VAT refund.

The VAT refund shall only apply to retail and tangible goods, such as clothing, apparel, electronics, gadgets, jewelry, accessories, souvenirs, food or non-food consumables, and other goods intended for personal use.

The following are not qualified for the VAT refund under this IRR:
a. Goods in commercial quantity;
b. Goods to be consumed fully or partially in the Philippines;
c. Goods purchased from e-marketplaces and other digital or online stores; and
d. Services, such as transportation, accommodation, or other hospitality services.

The processing of VAT refund claims under this IRR shall be subject to the following general guidelines:
a. The tourists intending to avail of the VAT refund shall present their valid foreign passport and eTravel registration to the duly accredited store prior to the purchase of eligible goods.

b. The duly accredited store shall verify the identity and eligibility of the tourist for VAT refund by checking the foreign passport and eTravel registration presented. A photocopy or an image of the foreign passport may be presented, subject to presentation of the original to the VAT Refund System (VRS) operator upon validation of the refund claim.

c. The duly accredited stores shall input the tourist’s foreign passport and purchase transaction details in the VRS.

d. The duly accredited stores shall, in all transactions, comply with the provisions of the Tax Code and applicable rules and regulations.

e. At the airport or seaport, the tourist claiming VAT refund shall present their foreign passport to the VRS operator.

f. If physical inspection of the goods is required, the tourist must proceed to the Customs Inspection counter for further inspection and validation before their refund claim can be processed.

g. After the successful validation of the claim for VAT refund, the same shall be approved and paid by the VRS operator in Philippine currency either in cash or electronically (e.g., digital wallets, bank transfers, or credit cards). The electronic payment of the VAT refund shall only be made directly to the digital wallet, bank, or credit card account of the tourist claiming such refund. In case of cash refunds, the same shall be subject to applicable regulations on cross-border transfer of Philippine currency.

h. The tourist shall be charged with a service fee, which maximum amount shall be set by the Department of Finance (DOF), for the processing of the refund. Transaction fees imposed by digital wallets, banks, or other entities for the electronic transfer or payment of the refund amount shall also be borne by the tourist.

The DOF shall coordinate with the Department of Information and Communications Technology (DICT) to facilitate the integration of a digital identifier for tourists qualified for VAT refund in the eTravel System. Such identifier shall be viewable in the eTravel registration.

The VRS operator, in consultation with the BIR and Bureau of Customs (BOC), shall classify VAT refund claims as either low-or high-risk. If the refund claim is classified as high-risk, the tourist shall be required to present the goods purchased for inspection and further validation by the BOC. Low-risk VAT refund claims shall only be subject to random inspection and validation. The BIR and BOC, in consultation with relevant government agencies, shall issue a joint issuance providing for the criteria and procedure of the risk-based classification of VAT refund claims.

VAT-registered retail establishments intending to participate in the VRS shall undergo accreditation with the VRS operator. For this purpose, the establishment shall submit the following requirements:

a. BIR Certificate of Registration;
b. Registration with the Department of Trade and Industry (DTI) or the Securities and Exchange Commission;
c. Other documentary or system requirements as may be prescribed.

The VRS operator shall provide duly accredited stores with an issuing solution for processing transactions, training, performance reporting, marketing and promotions support, and other services required to ensure the efficient processing of sales transactions subject to VAT refund, at no additional cost.

The VRS operator, DOF, Department of Tourism (DOT), and other agencies shall publish the complete list of duly accredited stores on their respective websites.

The roles of the BIR in the administration and implementation of the VRS are as follows:

i. The BIR shall issue detailed rules and regulations outlining the requirements to be submitted by the VRS operator and the procedure for the processing of the payment of VAT refunds made by the VRS operator;

ii. The BIR shall jointly execute with Department of Budget and Management (DBM) a separate issuance on the charging of the amount necessary for the VAT refund system against the special account in the General Fund as provided under Section 106 of the National Internal Revenue Code (NIRC).

iii. The BIR shall execute a Data Sharing Agreement with the DICT to be provided access to relevant information collected through the eTravel System on tourists qualified for VAT refund, for verification purposes.

iv. The Commissioner of Internal Revenue shall recommend the adjusted threshold amount of goods purchased per transaction under Section 4 of this IRR, as may be necessary, and in accordance with the Consumer Price Index issued by the PSA.

The roles of the duly accredited stores and the VRS operator are specified in the Order.

The VRS operators shall be accredited in accordance with the qualification criteria and compliance with the documentary requirements set forth in a separate issuance.

The VRS operator shall apply for reimbursement of the amount of VAT refunded to tourists, subject to the submission of documentary requirements with the BIR.

The BIR shall verify the documents submitted and shall process the reimbursement of the refund amount within thirty (30) days from the complete submission of documentary requirements, subject to disallowances in case of any discrepancy or deficiency that may be found in the supporting documents. The BIR shall issue a revenue issuance providing for the procedure and documentary requirements for the VRS operator to claim reimbursement.

The VRS, the refunds made to tourists, and the payment made to the VRS operator shall be subject to the post-audit by the Commission on Audit (COA), subject to applicable rules and regulations. The amount necessary for the VRS shall be charged against the special account in the General Fund as provided under Section 106 of the NIRC.