BASIC HUMAN FOOD AND RELATED PRODUCTS

1. agricultural and marine food products in their original state

2. livestock and poultry of a kind generally used as, or yielding or producing foods for human
consumption
3. breeding stock and genetic materials

EXAMPLES OF AGRICULTURAL & MARINE FOOD PRODUCTS in their “ORIGINAL STATE”

AGRICULTURAL MARINE LIVESTOCK POULTRY
Polished Rice Molasses Fish Prawns Cows Sheep Fowls
Husked Rice Ordinary Salt Lobsters Oysters Bulls Goats Ducks
Corn grits Shrimps Mussels Calves Rabbits Geese
Raw cane sugar Trout Clams Pigs Turkey
Eels

QUALIFIED ACTS FOR “ORIGINAL STATE” REQUISITE

ACTS OF PREPARATION ACTS OF PRESERVATION ADVANCED PACKAGING
Boiling Roasting Freezing Salting Shrink Wrapping in Plastics
Broiling Stripping Drying Smoking Vacuum Packaging
Husking Grinding Tetra-Packing

FARM AND FISHERY INPUTS

Marine or agricultural inputs intended for the production of marine or agricultural food
products which are ultimately for human consumption is exempt.
 Fertilizers, seeds, seedlings and fingerlings
 Fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced
or imported, used in the manufacture of finished feeds
 Except specially feeds for race horses, fighting cocks, aquarium fish, zoo animals and
other animals generally considered as pets

QUASI-IMPORTATION
1. Personal and household effects
2. Professional instruments and implements, tools of trade, occupation or employment,
wearing apparel, domestic animals, and personal and household effects of Overseas
Filipinos to settle in the PH

Requisites for Exemption [1]

 Non-residing citizens coming to resettle in the PH
 such goods are exempt from custom duties under the Tariff and Customs Code of the PH

Requisites for Exemption [2]

 goods belong to persons who come to settle in the PH
 goods must accompany the person upon arrival or within 90 days before or after arrival
  evidenced with a change of residence
 importation is not a vehicle, machinery or other equipment used in the manufacture or
merchandise of any kinds in commercial quantity

AGRICULTURAL SERVICES
Services by agricultural contract growers and milling for others of palay into rice, corn
into grits and sugar cane into raw sugar.

Agricultural Contract Growers

They are the persons producing for others poultry, livestock or other agricultural and
marine food products in their original state

Raw Cane Sugar

- Sugar produced by simple process of conversion of sugar cane without need of any
mechanical or similar device such as muscovado.
- For this purpose, raw sugar cane refers only to muscovado sugar, thus, only
muscovado is exempt from VAT

HEALTH
 Medical, dental, hospital and veterinary services
 Medicines for certain illness
 COVID-19 related products

HOSPITAL DRUGSTORE
If the hospital or clinic operates a pharmacy or drugstores, the sale of drugs and
medicines are:
1. Sales made by drugstore to the in-patients which are included in the hospital bills are
part of medical bills exempt from VAT
2. Sales of the drugstore to the out-patients are subject to VAT, because they are not part
of medical services of the hospital

SALE OR IMPORTATION OF MEDICINES

 Diabetes
 High cholesterol
 Hypertension
 Cancer
 Mental Illness
 Kidney disease

SALE OR IMPORTATION OF COVID-19 RELATED PRODUCTS

The following are exempt within January 1,2021 to December 31,2023:
 Capital equipment including spare parts and raw materials necessary of PPE production
  All drugs, vaccines and medicines devices for COVID-19 treatment
 Drugs for COVID-19 treatment for use in clinical trials

EDUCATION
 Schools
 Educational Materials

Educational Services
EXEMPT
 Private educational institutions, duly
accredited by DepEd, CHED and TESDA
 Those rendered by gov’t educational
institutions
TAXABLE
 Seminars, in service training, review
classes and other similar services
rendered by persons who are not
accredited by the DepEd, CHED and TESDA

Educational Materials
EXEMPT REQUISITES
 Books  Such materials are not devoted
 Newspapers principally to the publication of paid
 Magazines advertisement
 Review bulletin  Such materials are compliant with the
 Other educational materials covered by National Book Development Board
UNESCO Agreement on importation of requirements
such materials
 Including digital or electronic format

SALE TO SENIOR CITIZENS & PERSONS WITH DISABILITIES

PRODUCTS SENIOR CITIZEN PWDs
Drugs, vaccines and foods for special medical purpose Exempt Exempt
Vitamins and mineral supplements Exempt Vatable
Accessories and equipment by or senior citizens Exempt Vatable
Casket or Urn Exempt Exempt

EXPORT SALES
VAT-Registered Non-VAT-Registered

Zero-rated VAT Exempt

EMPLOYMENT
Services rendered by individuals pursuant to an employer-employee relationship.
REGIONAL AREA HEADQUARTERS
Services rendered by a regional or area headquarters established in the PH by multinational
corporations:
 Which act as supervisory, communications and coordinating centers for their affiliates,
subsidiaries or branches in the Asia-Pacific Region and do not earn or derive income form
the PH

SPECIAL EXEMPTIONS
 Under international agreement to which the PH is a signatory
 Under special laws except those granted under PD No. 529, Petroleum Exploration
Concessionaries under Petroleum Act of 1949
 Sales by Eco-zone locators
 Receipts of proprietors of theaters or cinemas

*Services specifically subject to percentages taxes are from VAT.

450,000
180,000

1,500,000
dapat