1. What are the requirements to claim tax exemption for the procurement, importation, donation, storage, transportation, deployment, and administration of COVID-19 vaccines?
The Secretary of Finance issued Revenue Regulations No. 1-2021 (RR No. 1-2021) which implements the tax incentives granted under Republic Act No. 11525, or the "COVID-19 Vaccination Program Act of 2021." RR No. 1-2021 is effective from January 1, 2021.
Based on RR No. 1-2021, the following entities may avail themselves of tax incentives: (a) the National Government, through the Department of Health and the National Task Force Against COVID-19; (b) any of the political subdivisions of the State; and (c) private entities and international humanitarian organizations, such as the Philippine Red Cross (collectively, the Qualified Entities). The procurement, importation, donation, storage, transportation, deployment, and administration of COVID-19 vaccines by the Qualified Entities are exempt from value-added tax (VAT), excise tax, and donor's tax, as well as other fees for as long as the vaccines are not intended for resale or other commercial use, and are distributed without any consideration from the persons to be vaccinated.
In order to qualify for the tax exemption, the Qualified Entities must present the following: (a) a certified true copy of the COVID-19 vaccine procurement agreement/multiparty agreement, as may be applicable; (b) a certified true copy of the COVID-19 vaccine's Certificate of Product Registration or Emergency Use Authorization issued by the Food and Drug Administration (FDA); and (c) a sworn declaration from the taxpayer-buyer/importer/donee that the vaccines are not for resale or other commercial use, and shall be distributed without consideration, in accordance with the COVID-19 Vaccination Program of the National Government. If the vaccines are donated to the Qualified Entities, the latter should also present a certified true copy of the duly accepted Deed of Donation or, for private entities and international humanitarian organizations, Bureau of Internal Revenue (BIR) Form 2322 representing a Certificate of Donation.
2. How are the amendments under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act on certain final taxes implemented by the BIR?
Revenue Regulations No. 2-2021 (RR No. 2-2021) implements the revised rates of final tax on certain types of income under Republic Act No. 11534, or the CREATE Act, by further amending Revenue Regulations No. 9-98.
RR No. 2-2021 provides that winnings by non-resident aliens engaged in trade or business in the Philippines is subject to a 20% tax, except for their winnings from the Philippine Charity Sweepstakes Office (PCSO) games amounting to PhP10,000 or less, which shall be exempt from income tax.
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