VAT Refund Guide for Foreign Tourists in the Philippines

The Philippines, known as the “Pearl of the Orient,” boasts breathtaking natural beauty, diverse ecosystems, warm hospitality, rich culture, and affordability. It’s a top destination for stunning beaches, world-class diving, and endless adventures, frequently celebrated by the global travel community and featured by renowned travel vloggers.

• Retail Shopping Culture in the Philippines
• Additional Tax Refund Incentive for Tourists Purchases
• VAT Refund Requirements and Steps
• Frequently Asked Questions

Beyond its wonderful attractions, the Philippines offers an extra perk for international travelers with its Value Added Tax (VAT) refund program for foreigners buying local goods.

Tourists can get tax rebates on items from accredited retailers, making shopping more affordable and encouraging support for Filipino craftsmanship. From handcrafted souvenirs to unique textiles, shopping here becomes a more rewarding part of any trip.

Retail Shopping Culture in the Philippines

The Philippines boasts a dynamic shopping culture. Visitors can explore sprawling, modern malls like SM Mall of Asia and Ayala Center, offering a vast selection of products.

For unique finds, tourists can delve into local markets and discover memorable souvenirs. Popular keepsakes include exquisite sea products like intricate capiz shell crafts and lustrous South Sea pearls, handcrafted wood carvings, the delightful flavors of tropical fruits such as mangoes and coconuts, and beautifully woven textiles like “Abaca” and “Piña” transformed into clothing, bags, and decorative items.

Additional Tax Refund Incentive for Tourists Purchases

Recognizing the potential of tourism, the Philippine government has introduced a VAT refund program for applicable non-resident foreign tourist purchases with minimum required spending through Republic Act No. 12079. This initiative aims to encourage greater spending by visitors by eliminating an additional 12% cost on their purchases, thereby boosting local businesses and generating more revenue for the country.

Furthermore, the government ensures that the administration of the VAT Refund System (VRS) should be simple and efficient for the benefit of tourists. There will be accredited VAT refund operators which will provide end-to-end solutions to the government. Such refunds may be made electronically or in cash.

VAT Refund Requirements and Steps

The Implementing Rules and Regulations of RA No. 12079 sets out the requirements for claiming the VAT refund. For tourists wanting to claim the benefit, the following must be complied:

• Goods purchased shall be purchased in person by the tourist from duly accredited stores. To check if a store is accredited, you may:
• • Inquire at Major Retailers: Larger shopping centers and well-known retail chains in major tourist destinations are more likely to participate in the VAT refund program.
  • Look for VRS Branding: Accredited stores may display signage or branding indicating their participation in the VAT refund program.
  • Ask Store Personnel: When shopping, directly inquire with store staff about their participation in the VAT refund program and the required procedures;
• Goods are physically taken out of the Philippines as accompanied baggage within 60 days from date of purchase; and
• The value of the goods purchased per single transaction is P 3,000 or more covered in a single receipt.

The VRS laid down the steps in availing the VAT refund which is as follows:

1. Present your valid foreign passport and eTravel registration to the accredited stores for purchase of eligible goods (clothing, apparel, electronics and gadgets, jewelry, accessories, souvenirs, food, and other items for personal use).
2. The duly accredited store will verify your identity and eligibility for VAT refund by checking the foreign passport and eTravel registration presented.
3. The duly accredited store will input your passport and purchase details into the VRS.
4. Present your foreign passport to the VRS operator at the airport or seaport.
5. Proceed to the Customs Inspection counter for potential inspection and validation.
6. Upon successful validation, the VRS operator will approve and pay the refund in Philippine currency (cash or electronically), after deducting a service fee.

Get a VAT Refund on Your Trip to The Philippines

Foreign nationals planning to visit the Philippines can benefit from the government’s VAT refund program, which offers significant savings on purchases of local goods.

Moreover, if you are planning to visit the Philippines, you may talk to visa consultants to ensure that you have an accurate visa for your stay.