Philippines to Impose VATs on Certain Raw Materials
The Philippines recently issued a new 12% value-added tax on previously zero-rated goods and services, including sales of certain raw and packaging materials to Philippines companies, the Hong Kong Trade Development Council reported June 22. Effective June 26, the VATs…
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will apply when a sale is made to a Philippines “export‑oriented enterprise” for the purpose of “manufacturing, processing, packing or repacking the buyer’s goods in the Philippines.” In addition, a 12% VAT will apply to sales of raw or packaging items to a Philippines exporting business “whose export sales account for more than 70% of its total annual production.” VATs will also apply to “services such as the processing, manufacturing or repacking of goods for export purposes.”