Philippines now VAT-free for foreign tourists

The Philippines is now value-added tax (VAT)-free for foreign tourists with the recent signing of the implementing rules and regulations (IRR) for Republic Act No. 12079, or the VAT Refund for Non-Resident Tourists.

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RA 12079 aims to boost tourism and encourage more foreign tourists to shop and spend more in the Philippines, thereby bolstering economic growth.

Its IRR was signed by Secretary Recto, along with Bureau of Customs (BOC) Commissioner Bienvenido Y. Rubio, and Bureau of Internal Revenue (BIR) Deputy Commissioner Marissa O. Cabreros, on March 24, 2025. It was witnessed by Department of Tourism (DOT) Secretary Christina Garcia-Frasco and Office of the Special Assistant to the President for Investment and Economic Affairs (OSA-PIEA) Secretary Frederick D. Go.

Under the IRR, non-resident tourists or foreign passport holders may apply for a VAT refund for locally purchased goods from accredited stores that are equivalent to at least P3,000.

The goods must be physically taken out of the Philippines by the tourist as accompanied baggage within 60 days from the date of purchase.

The VAT refund only applies to retail and tangible goods, such as clothing, apparel, electronics, gadgets, jewelry, accessories, souvenirs, food or non-food consumables, and other goods intended for personal use.