Foreign tourists visiting the Philippines will soon enjoy a more rewarding shopping experience. Under Republic Act No. 12079, the Philippine government has approved the VAT Refund Program for Non-Resident Tourists, allowing them to apply for value-added tax (VAT) refunds on goods purchased from accredited local retailers.
The Implementing Rules and Regulations (IRR) were officially signed in March 2025, and the program is expected to roll out within the same year.
What does the VAT Refund program Cover?
Under Republic Act No. 12079, foreign tourists may get VAT refunds for items purchased from accredited stores, with a minimum value of P3,000, as long as the items are taken out of the country within 60 days of purchase.
The refund may be processed electronically or in cash, with the government set to partner with international VAT refund operators for secure and efficient implementation.
This initiative is part of a broader effort to attract more foreign tourists, stimulate higher spending, and position the Philippines as a global shopping destination. According to Finance Secretary Ralph Recto, with a reported multiplier effect of 1.97, every ₱100 spent by tourists can generate nearly ₱197 in economic activity—impacting jobs, incomes, and government revenues.
Finance Secretary Ralph Recto, Customs Commissioner Bienvenido Rubio, and BIR Deputy Commissioner Marissa Cabreros led the ceremonial signing of the IRR, witnessed by Tourism Secretary Christina Garcia-Frasco and Investment and Economic Affairs Secretary Frederick Go.
Key Takeaways for Businesses
| Foreign tourists can claim VAT refunds on goods worth at least ₱3,000 and above |
| Goods must be taken out of the country within 60 days from the purchase date |
| Participating retailers must be accredited by the BIR |
| VAT refunds may be processed electronically or in cash |
| Businesses must keep clear, updated VAT records to comply |
Business Tip:
If you’re a retail business in the Philippines, now is the time to get ready. Start reviewing your tax documentation, make sure your sales records are up to date, and prepare to apply for store accreditation with the BIR.
- Retailers: Start preparing to get BIR-accredited under the VAT refund program
- Update your accounting systems to reflect VAT-qualified sales
- Watch for DOF and BIR updates on the refund processing system
Need help?
At UNA Tax & Accounting Services, we assist businesses in preparing for new tax policies like this VAT refund system with our tax compliance and advisory services.
Whether you’re a retail store or service provider aiming to attract international customers, we’ll help you stay compliant. Let us guide you through the process and ensure your business is ready for 2025. Our team of expert accountants in the Philippines is here to help.
Contact us today and Schedule a FREE 15-minute consultation!
