REVENUE MEMORANDUM ORDER NO. 7-2006 issued on February 28, 2006 prescribes
the guidelines and procedures in the processing of applications for zero-rating of effectively
zero-rated transactions for Value-Added Tax (VAT) purposes.
All applications for VAT Zero-Rate, except those of large taxpayers, shall be processed
and approved by the Audit Information, Tax Exemption and Incentives Division (AITEID).
Applications for VAT zero-rating of large taxpayers shall be processed by the Large Taxpayers
Audit and Investigation Divisions I and II (LTAID I and II) and Large Taxpayers District Office
(LTDO). Revenue District Offices are not allowed to process and approve/disapprove application
for VAT zero-rate.
The application for VAT Zero-Rate shall be accomplished and filed only by VATregistered sellers to cover sale of goods, properties or services to qualified buyers certified or
endorsed, whenever necessary, by the concerned government regulatory agency. If there are
legal issues involved in an application, the same shall be referred to the Law Division/VAT
Review Committee for legal interpretation of vague provisions of the law. Processing shall be
made only upon receipt of the legal opinion from the said Office. The VAT Review Committee
shall transmit the necessary legal opinion to the AITEID within 30 days from receipt of referral.
For disapproved applications, the reason/s for the denial shall be clearly stated in the application.
Processing of applications requiring favorable endorsement from other regulatory
agencies shall be made only upon official receipt by AITEID of the annual master file and/or the
separate endorsement letter, as the case may be, from the said agencies.
Approved applications for VAT Zero-Rate shall take effect on the date the application
was received by the AITEID and shall be valid until December 31 of the year of application and
renewable every year thereafter. The application for renewal shall be filed on or before the last
working day of December of each year. For applications filed on or after the first working day of
January, the effectivity date thereof shall be reckoned on the date of its actual receipt. However,
for applications for renewal filed by suppliers of qualified exporters who were not included in
the first masterlist submitted by concerned regulatory agencies, the effectivity date of approval
shall be reckoned on the date of official endorsement by the said regulatory agency or the date of
receipt of application, whichever comes later.
The approved application for VAT Zero-Rate shall be revoked in the event that the
taxpayer-applicant was found to have committed misrepresentations on the application or the
exporter was found to have been erroneously endorsed for VAT zero-rating. The revocation shall
be retroactive to the date when the application was approved