ZAMUDIO, PAUL ANDREI, A.

BSA-2B
ZERO RATED SALE/EXPORT OF SERVICES
Summary
Sale of Services performed in the Philippines subject to 0% VAT:
1.) Processing, manufacturing and repacking of goods for businesses abroad and
such goods are to be exported. Such services rendered are paid in foreign
currency acceptable and accounted for with regards to the rules and regulations
of the BSP.
2.) Processing, converting, or manufacturing services rendered by subcontractors
and/or contractors for an enterprise with export sales exceeding to 70% of total
annual production.
3.) Services aside from those mentioned in item number 1 which are also rendered
for businesses abroad or to a nonresident person who is also abroad during the
rendering of such services. These services are paid in foreign currency
acceptable and accounted for with regards to the rules and regulations of the
BSP.
4.) Services performed for those entities exempted under special laws or
international agreements to which the Philippines is a signatory effectively
subjects the supply of such services to zero percent rate.
5.) Services performed to those who are into international shipping or international
air transport operations, including leases of property for use thereof.
6.) Transport of passengers and cargo by domestic air or sea vessels from the
Philippines to countries abroad.
7.) Sale of power or fuel that are generated via renewable sources of energy such
as but is not limited to:
 Biomass
 Solar
 Wind
 Hydropower
 Geothermal
 Ocean energy
 Other emerging energy resources using technologies such as fuel cell and
hydrogen cells.
**Note: Due to TRAIN Law, export sales falling under the category of either item number
1 or 2 are now subject to 12% VAT, if and only if the following requisites are satisfied:
 Successful establishment and implementation of an enhance refund system that
grants refunds of creditable input tax within 90 days from the filing of the vat
refund application with the BIR; The ninety (90) day period to process and
decide, pending the establishment of the enhanced VAT Refund System shall
 only be up to the date of approval of the Recommendation Report on such
application for VAT refund by the Commissioner or his duly authorized
representative; Provided; that all claims for refund/tax credit certificate filed prior
to January 1, 2018 will be governed by the one-hundred (120)-day processing
period; and
 All pending vat refund claims as of Dec. 31, 2017 shall be fully paid in cash by
Dec. 31, 2019.

Insights
There are some sales or exports of services rendered in the Philippines that are
subject to 0% VAT. It includes those services like processing, repacking, manufacturing
of goods and other services that are rendered for entities, persons or businesses, not
residing inside the Philippines. It also covers those services of subcontractors or
contractors to exporters, services to specific VAT exempt persons, services to
international shippers, transport of passengers and cargos from Philippines to abroad,
and sale of renewable energy in the Philippines.