Section 12 of Republic Act No. 11534 known as the “Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act” provided Value-Added Tax (VAT) Exemption to certain health products including, Drugs for Hypertension, Cancer, Mental Illnesses, Tuberculosis, Kidney Diseases, Diabetes, High Cholesterol, and COVID-19 medicines and medical devices. Pursuant to the said law, the Food and Drug Administration (FDA) is directed to identify and transmit the VAT-Exempt Health products to other implementing agencies such as the Bureau of Internal Revenue (BIR), Bureau of Customs and Department of Trade and Industry.
Relative thereto, the FDA has issued FDA Advisory (FA) No.2021-22931 which provided the public the initial list of VAT-Exempt Health Products pursuant to Republic Act No. 11534, otherwise known as the “Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act”, and FA No.2022-01362 which provided the Frequently Asked Questions (FAQs) such as submission of request and reference on the updated/latest VAT-Exempt list.
Currently, the FDA transmits an endorsement letter containing updates on the said list and its effectivity to the BIR, for approval and preparation of the Revenue Memorandum Circular (RMC) which shall be posted on the BIR website for public reference. However, the RMC provides that the effectivity of updates is the date of publication of FDA, to wit “As clarified under Q&A No. 1 of RMC No. 99-2021, the effectivity of the VAT exemption of covered medicines and medical devices under the CREATE ACT shall take effect on the date of publication by the FDA of the updates to the said list”.
In compliance with the above provision, the effectivity of succeeding updates pertaining to the List of VAT-Exempt Health Products pursuant to the CREATE Act, shall be the date of publication of FDA Advisory containing the signed endorsement letter to BIR. Further, provided in the Annex is the signed endorsement letter dated 04 January 2023, containing the latest updates on the List of VAT-Exempt Health Products, effective upon the issuance of this Advisory.
For more information and inquiry regarding this Advisory, kindly contact the FDA Policy and Planning Service via email at [email protected].
Dissemination of this Advisory to all concerned is kindly requested.