Philippines Now Offers VAT Refunds for Foreign Tourists on Local Purchases

Foreign tourists visiting the Philippines can now enjoy value-added tax (VAT) refunds on select local purchases, thanks to newly signed implementing rules and regulations (IRR) for the VAT Refund for Non-Resident Tourists Act (Republic Act 12079).

Under the new guidelines, foreign passport holders are eligible for a VAT refund on purchases worth at least ₱3,000 made at accredited stores, provided the items are taken out of the country within 60 days from the date of purchase.

The IRR was formally signed by Finance Secretary Ralph Recto, Customs Commissioner Bienvenido Rubio, and BIR Deputy Commissioner Marissa Cabreros, with key witnesses including Tourism Secretary Christina Frasco and Presidential Adviser Frederick Go.

“We want more tourists to come, stay longer, spend more, and enjoy seamless transactions,” said Recto at the signing. He emphasized the economic benefits of the program, noting that for every ₱100 spent by a tourist, it generates ₱197 in overall economic activity.

To make the process efficient, the Department of Finance (DOF) will work with reputable, globally recognized VAT refund operators. Refunds can be processed electronically or in cash, depending on the system implemented.

The program is expected to boost the Philippines’ appeal as a global shopping destination, while increasing local business revenues, employment, and government collections.

President Ferdinand Marcos Jr. signed the law last December as part of broader efforts to elevate the country’s competitiveness in the tourism and retail sectors.

Recto summed it up best: “Let’s ensure tourists leave with more than souvenirs—let them take home an experience of a country that keeps its promises and delivers world-class service.”