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