Under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, certain health products, such as drugs for noncommunicable diseases, were exempted from Value Added Tax (VAT). Last December 3, 2024, an update to the list of VAT-exempt medicines was issued by the Bureau of Internal Revenue (BIR), in coordination with the Food and Drug Administration (FDA).
Inclusion
For cancer medicines, Degarelix that is freeze-dried powder for solution for injection (SC) and Tremelimumab that is concentrate for solution for infusion (IV), are now VAT-exempt. For diabetes medicines, Sitagliptin and Linagliptin are also included in the exemption. For mental illness medications, Clomipramine Hydrochloride, Chlorpromazine (as hydrochloride), and Midazolam are likewise exempt.
Correction and Deletion
For cancer medicines, there was a clarification on the generic name previously uploaded as Chorionic Gonadotrophin. This medicine was corrected to Human Chorionic Gonadotropin, which was a treatment of infertility in women instead of delayed puberty for men. Accordingly, it is not classified as treatment for cancer and was delisted from VAT-exemption.
The changes to the list of VAT-exempt medicines are effective beginning December 4, 2024, upon publication by the FDA. For more details, the complete list, as updated, may be found on the FDA’s website.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants
P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd.
As published in SunStar Philippines, dated 13 December 2024
