REVENUE REGULATIONS NO. 1-2021 issued on April 8, 2021 implements the tax
incentives and fee privileges for the procurement, importation, donation, storage,
transport, deployment and administration of the COVID-19 vaccines under Section
11 of Republic Act No. 11525 (COVID-19 Vaccination Program Act of 2021).
Beginning January 1, 2021 and during the period of the state of calamity as
declared under Proclamation No. 1021 issued by the President of the Philippines,
the procurement, importation,donation, storage, transport, deployment, and
administration of COVID-19 vaccines through the COVID-19 Vaccination Program by
i) the National Government (through the Department of Health [DOH] and the
National Task Force Against COVID-19); ii) any of the political subdivisions of the
State; and iii) private entities and international humanitarian organizations (such as
the Philippine Red Cross)shall be exempt from the Value-Added Tax (VAT), Excise
Tax and Donor’s Tax and other fees, subject to the guidelines, procedures and
requirements provided under this Regulations.
No VAT shall be imposed on the procurement of COVID-19 vaccines by the
abovementioned entities. Hence, VAT shall not be part of the contract price for the
procurement of the COVID-19 vaccines by these entities.No VAT and Excise Tax
shall also be imposed on the importation of COVID-19 vaccines by the
abovementioned entities.
The importation of COVID-19 vaccines, as allowed in this Regulations, shall
not be subject to the issuance of an Authority to Release Imported Goods (ATRIG)
under Revenue Memorandum Order No. 35-2002, as amended; and may be
released-by the Bureau of Customs (BOC) without need of an ATRIG. However, the
BIR may conduct a post investigation/audit on the importations released by the BOC
without ATRIG pursuant to this Regulations.
No VAT shall be imposed by the service providers on the services to be
rendered to theabovementioned entities for the storage, transport, deployment and
administration of the COVID-19 vaccines. Hence, VAT shall not be part of the
contract price for the engagement/procurement of such services by the said entities.
No Donor’s Tax shall be imposed on the donation of the COVID-19 vaccines
to the abovementioned entities, subject to the ordinary rules of deductibility as
provided for in Section 34 (H) of the National Internal Revenue Code (NIRC) of 1997,
as amended, and its existing rules and regulations, if applicable.The tax incentives
shall only be applicable if the vaccines are not intended for resale or other
commercial use and shall be distributed without any consideration from persons to
be vaccinated.
For the purpose of qualifying for exemption from VAT, Excise Tax and
Donor’s Tax, the abovementioned entities availing of the exemption must present the
following:
a. Certified true copy of the COVID-19 vaccine procurement
agreement/multi-party agreement, as may be applicable. The multi-party
agreement on the procurement by the Local Government Units (LGUs)
and private entities shall include the DOH and the relevant supplier of the
COVID-19 vaccine;
b. Certified true copy of the COVID-19 vaccine’s Certificate of Product
Registration or Emergency Use Authorization (EUA) issued by the Food
and Drug Administration (FDA);
c. “Sworn Declaration” from the taxpayer-buyer/importer/done that the
COVID-19 vaccines shall not be intended for resale or other commercial
use and shall be distributed without consideration from persons to be
vaccinated, in accordance with the COVID-19 Vaccination Program of the
National Government. For private entities, a statement shall be included
that any such vaccines shall be for the sole and exclusive use of such
entities and their related parties, if any, as discussed under Section 4 of
Revenue Regulations No. 19-2020; and,
d. In addition to the foregoing requirements, the following shall be presented
for COVID-19 vaccines donated to the abovementioned entities:
i. For the National Government and LGUs – a certified true copy of the
duly accepted Deed of Donations; and
ii. For private entities and international humanitarian organizations – a
certified true copy of the duly accepted Deed of Donation and/or BIR
Form No. 2322 (Certificate of Donation).
The grant of exemption for the importation of COVID-19 vaccines,
engagement of services for the storage, transport, deployment and administration,
as well as the donation of the COVID-19 vaccines is deemed to be in effect
beginning January 1, 2021. The VAT on all covered and qualified
shipments/importations/services that may have been paid from January 1, 2021 until
the effectivity of these regulations shall be refunded pursuant to Section 204(C) of
the Tax Code in accordance with existing rules and procedures for refund of VAT on
importation/services, provided that the input tax on the imported items/services have
not been reported and claimed as input tax credit in the monthly and/or quarterly
VAT returns. The same shall not be allowed as input tax credit pursuant to Section
110 of the Tax Code for purposes of computing the VAT payable of the concerned
taxpayer/s for the said period.
Similarly, Excise Tax and Donor’s Tax on all covered and qualified
transactions that may have been paid from January 1, 2021 until the effectivity of this
Regulations, shall be refunded pursuant to Section 204(C) of the Tax Code and its
implementing rules and regulations.
This Regulations shall take effect beginning January 1, 2021 and shall remain
in full force and effect during the period of the state of calamity under Proclamation
No. 1021 dated September 16, 2020 issued by the President of the Philippines.