VAT Applicability on Purchases of Lactating Feeds in the Philippines

This is general information based on the National Internal Revenue Code (NIRC) of 1997, as amended (including TRAIN/CREATE-era changes), and typical BIR practice. It’s not legal advice. If you’re making high-value decisions, consult your tax adviser and check the latest BIR issuances.

Executive summary

Purchases of “lactating feeds” for livestock, poultry, or aquatic animals are generally VAT-EXEMPT in the Philippines.
Ingredients used to manufacture such feeds (e.g., premixes, vitamin–mineral packs, amino acids) are also generally VAT-exempt when destined for livestock/poultry/aquatic feeds.
Specialty feeds for pets, fighting cocks/gamefowl, racehorses, zoo/laboratory or other non-food animals are NOT exempt—they’re VAT-taxable at the regular rate.
If a supplier erroneously charges VAT on an exempt feed purchase, you cannot claim input VAT; treat it as part of cost and have the seller correct/credit the invoice.
For importations, the same exemption typically applies to qualifying feeds and feed ingredients, but proper product classification and documents are essential at the Bureau of Customs.

Legal framework (high level)

NIRC §109 (VAT-Exempt Transactions) includes:
- Sale and importation of feeds for livestock, poultry, and aquatic animals, and
- Sale and importation of ingredients used in manufacturing those feeds.
- Exclusion: specialty feeds for pets, fighting cocks, racehorses, and typically other non-food animals are not covered by the exemption.
The VAT rate on taxable goods remains 12% (as of this writing). Exemption ≠ 0%: exempt means no VAT is charged and no input VAT may be credited.

What counts as “lactating feeds”?

Lactating feeds are formulated rations specifically for lactating animals (e.g., sows, dairy cattle, goats) to support milk production.
The exemption hinges on the intended end-use: the animals are raised for human food or food production (meat, milk, eggs, fish/shrimp).

Finished feeds vs. ingredients

Finished feeds labeled/registered for livestock/poultry/aquaculture use—exempt.
Ingredients/additives/premixes sold to feed mills or farms for producing such feeds—generally exempt, provided they are integral to feed manufacture/use. (Keep evidence of intended use.)
Packaging materials, spare parts, machinery, energy, services used in producing feeds are not feeds—VAT-taxable unless another exemption applies.

How the exemption works on the purchase side

1) Domestic purchases

If you buy qualifying lactating feeds locally, the seller should issue a VAT-EXEMPT sales invoice (SI), with “VAT-Exempt Sale” clearly indicated (and ideally a note referencing the NIRC exemption).
No input VAT arises for you on these purchases.
If the invoice shows 12% VAT, request a credit memo/replacement SI. You cannot treat that VAT as input tax.

2) Importations

Qualifying feeds and feed ingredients are exempt from VAT on importation if they fit the statutory category.
What customs looks for: correct tariff classification, product description/labels, BAI/FDA registrations where applicable, and proof of intended use (especially for ingredients).
If misclassified, VAT may be assessed at the border; correcting it later is possible but document-heavy.

3) Purchases through distributors/retailers

The exemption follows the product, not the channel. Buying qualifying lactating feeds from a retailer should still be VAT-exempt—the invoice should not show 12% VAT.

Impact on different buyers

VAT-registered farms/feed mills:
- Record exempt feed purchases at gross amount (no input VAT).
- For common inputs (e.g., power, repairs) used in both VAT-taxable activities (like selling processed meat) and exempt activities (feed sales or purchases), apportion input VAT on those common inputs; feed purchases themselves generate no input VAT to apportion.
Non-VAT taxpayers (below threshold) or exempt entities:
- The feed purchase being VAT-exempt has no VAT effect either way; account for it at gross.

Documentation & invoicing checklist

Sales Invoice (SI) from supplier must state “VAT-Exempt Sale.”
Keep product labels, technical sheets, BAI/FDA registrations (if any), and contracts showing that the product is livestock/poultry/aquaculture feed or its ingredient.
For ingredients, obtain a buyer’s declaration or end-use certification (e.g., from the feed mill or farm) that the items are solely for manufacturing livestock/poultry/aquatic feeds.
For imports, retain import entry, classification ruling (if secured), and any regulatory permits.

Edge cases & practical rulings themes

Pet foods (dogs/cats) → VAT-taxable.
Gamefowl/fighting cocks → VAT-taxable.
Racehorse feeds → VAT-taxable.
Zoo/lab/exotic animal feeds (non-food animals) → usually VAT-taxable.
Medicated feeds registered as feeds for livestock/poultry/aquaculture → generally exempt (the presence of approved medication doesn’t, by itself, remove the feed from the exemption).
Milk replacers/colostrum boosters/premixes → often exempt when labeled and sold for livestock/poultry/aquatic use and integral to feeds; taxable if for pets or non-food animals.
Additives sold for multiple possible uses → treatment depends on documented end-use. If ambiguity exists, expect the conservative (taxable) position unless you substantiate feed use.

Common pitfalls (and how to avoid them)

Invoices showing VAT on exempt feed purchases
- Fix: Ask for a corrected SI/credit memo. Don’t claim input VAT—BIR will disallow it.
Relying only on marketing names (“lactation formula,” “performance booster”)
- Fix: Check labeling/registration and intended animal. Keep end-use proof.
Assuming “anything related to farms is exempt”
- Reality: Only feeds (and their ingredients) are exempt. Fuel, packaging, equipment, services remain taxable unless another rule applies.
Import misclassification
- Fix: Align tariff codes and descriptions with feed/ingredient status; consider a Bureau of Customs advance ruling for recurring imports.
Mixing pet/gamefowl products with livestock feed orders**
- Fix: Split POs and invoices; don’t commingle taxable and exempt lines without clear tags.

Frequently asked questions

1) Are lactating feeds “zero-rated”? No. They are VAT-exempt, not zero-rated. Zero-rating produces creditable input VAT; exemption does not.

2) If a supplier charged VAT by mistake, can I claim that as input VAT or get a BIR refund? Generally no to input VAT. The usual remedy is seller correction (credit memo/reissued invoice). Pursuing a BIR refund for erroneously paid VAT is legally possible in some contexts but procedurally heavy and uncertain; the practical route is to correct at source.

3) Are lactating feeds for nursing dogs/cats VAT-exempt? No. Pet feeds are taxable.

4) Are vitamin/mineral premixes I buy as a farm owner exempt? If they’re integral to feeds for livestock/poultry/aquaculture and documented as such, yes. If they’re general supplements or for pets/gamefowl, taxable.

5) Do I need special wording on the invoice? Best practice: the SI should include “VAT-Exempt Sale – Feeds for Livestock/Poultry/Aquatic Animals (NIRC §109)” or similar, with clear item descriptions.

6) What about cooperatives? Agricultural cooperatives have separate VAT rules that may provide additional exemptions depending on who they transact with and what is sold. That’s beside the feeds exemption, which stands on its own.

Practical compliance steps

Specify the animal and use on POs (e.g., “sow lactation feed for hog production”).
Ask suppliers to mark SIs as VAT-exempt and separate taxable items (e.g., sacks/packaging).
Keep end-use documentation, especially for ingredients/premixes.
For imports, prepare a document pack (product specs, regulatory registrations, end-use declarations).
Train AP staff not to book any VAT on exempt feed invoices; no input VAT should be claimed.
For mixed operations, set up an input-VAT apportionment policy for common inputs (not for the feeds themselves).

Worked examples

Example A (Exempt): A commercial hog farm buys “Sow Lactation Feed 18% CP” (registered as livestock feed). Supplier issues VAT-EXEMPT SI. The farm books the purchase at gross, with no input VAT.

Example B (Taxable): A pet store buys “Lactation Kibble for Nursing Dogs.” This is pet food → 12% VAT applies. The store may claim input VAT if VAT-registered and used in its VAT-taxable business.

Example C (Ingredients – Exempt): A feed mill imports DL-methionine and vitamin premix for producing lactating sow feeds. With proper documents and classification, the import VAT exemption applies. Local purchases of these premixes for the same purpose are also VAT-exempt.

Example D (Mixed shipment): A distributor sells “Dairy cow lactation feed” (exempt) and “Gamefowl booster pellets” (taxable) in one delivery. The SI should list separate lines, explicitly showing VAT-exempt for the first and 12% VAT for the second.

Takeaways

Lactating feeds for food-producing animals (and their ingredients) are VAT-exempt to encourage agricultural production.
Pets/gamefowl/racehorse feeds break the exemption.
No input VAT on exempt purchases—get invoices right and keep end-use documentation, especially for ingredients and imports.

If you want, tell me your exact product(s), invoices, and use-case, and I’ll map them to the correct VAT treatment and a documentation checklist tailored to you.