The Manila Times opinion piece explains how the Supreme Court’s February 4 2025 ruling in the Subic Bay Freeport case clarified that domestic market enterprises (DMEs) are entitled to VAT zero‑rating under the Create Act, overturning earlier BIR issuances that excluded them. It also outlines the conditions under which DMEs can still claim the benefit under the newer Create More law, namely high‑value DMEs with significant investment capital or export sales, and stresses that purchases must be directly attributable to the registered project. The article advises businesses in freeports and ecozones to update their ERP systems, document eligibility, and align procurement processes to avoid disputes.
The Court held that DMEs are entitled to VAT zero‑rating under the Create Act, and the exclusion of DMEs in earlier BIR issuances was void.
High‑value DMEs—those with investment capital over P15 billion in import‑substituting sectors or prior‑year export sales of at least $100 million—can still avail of the benefit under Create More.
Purchases must be “directly attributable” to the registered project or activity, requiring operational evidence of usage.
This summary was published on VATfaqs.com on 18 January 2026. It relates to VAT developments in Philippines. The original source is Manila Times.
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