RR No. 2-2012: Prescribes the tax administration treatment of petroleum and petroleum products imported into the Philippines including those coming in through freeport zones and economic zones and registration of all storage tanks, facilities, depots and terminals

Key points

1. VAT and Excise on imports. The importer pays VAT and Excise Taxes on petroleum imported or brought directly from abroad, including to Freeport and Economic zones, to the Bureau of Customs. Later sale or delivery to registered zone enterprises with tax privileges, and sale to international shipping or air transport, is subject to 0% VAT.
2. Credit or refund. The importer may file a claim with the BOC, which processes it subject to favorable BIR endorsement. No refund is granted unless the BIR is satisfied that the goods were sold to a registered locator and used in its registered activity, used in international transport, or sold to entities zero-rated for VAT or exempt from Excise Taxes.
3. Sales into the customs territory. If a zone enterprise sells or brings the products into the customs territory, or to a zone enterprise without tax privileges, no Excise Tax refund is granted for that product. The seller is liable for 12% VAT, except for fuel sold for international operations, and no VAT refund is allowed to the importer.
4. Importer permits. For each importation, the importer secures the prescribed ATRIG from the ETRD and pays VAT and Excise Taxes before release from the BOC. Importers also secure a Permit to Operate from the ETRD, and a Withdrawal Certificate on later sale into the customs territory.
5. Registering storage facilities. Owners, lessors or operators of tank facilities, depots and terminals, including those within Freeport and Economic zones, register with the BIR office for their Revenue Region. Facilities storing excisable goods get a Permit to Operate, and facilities that do not get a Permit to Operate Exempt Facility.

Who is affected

• Importers of petroleum and petroleum products
• Freeport and Economic zone registered enterprises
• Owners, lessors and operators of tank facilities, depots and terminals

Deadlines and effectivity

• Required documents submitted within fifteen (15) days from effectivity of the Regulations