by Glory Grace J Arugay
Just a little over a month in, and Republic Act (RA) No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN Law) has already caused a multitude and widely diverse reaction from the tax paying public. Some have expressed their approval, while others are a bit more critical.
One of the interesting changes under the TRAIN is the expansion of the definition of "export sales" under the Sec. 106 (A) (2) of the Tax Code and the addition of another transaction under Sec. 108, which are both subject to zero percent VAT rate. Under the TRAIN, the sale and delivery of goods, as well as services rendered to: 1. Registered enterprises within a separate customs territory as provided under special laws, and 2. Registered enterprises within tourism enterprise zones as declared by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) subject to the provisions of the Tourism Act of 209, are considered zero-rated sales and transactions, respectively. But while these amendments appear to be a welcome change to investors, Malacanang deems otherwise and as a result, vetoed the said provisions.