RR No. 5-2013: Prescribes the tax treatment of sale of jewelry, gold and other metallic minerals to a non-resident alien individual not engaged in trade or business within the Philippines or to a non-resident foreign corporation

Key points

1. Taxes on gold and metallic minerals. Excise tax is 2% of the actual market value of the gross output at removal, or of the value used by the Bureau of Customs for imports. Sales are subject to 12% VAT if the gross selling price exceeds P 1,919,500 (per RR No. 3-2012), otherwise 3% Percentage Tax. Sales of gold to the Bangko Sentral ng Pilipinas are excepted from this VAT and Percentage Tax rule. Sellers also pay income tax in advance, which is creditable.
2. Taxes on jewelry. Sales of jewelry are subject to 12% VAT if the gross selling price exceeds P 1,919,500, otherwise 3% Percentage Tax. Sellers pay income tax under Sections 24 and 25 (individuals) or Sections 27 and 28 (corporations), in advance and creditable.
3. Proof of excise tax payment. Possessors of gold and other metallic minerals must show proof that excise tax was paid, or they are assessed for it. Gold found without such proof is presumed removed on the day of discovery.
4. Advance payment through RCOs. Sellers pay in advance through the Revenue Collection Officers of the RDO where the transaction occurs, whether or not they are registered with the BIR. The rates are 12% VAT or 3% Percentage Tax, 5% income tax on gross payment, and 2% excise tax where applicable.
5. Crediting of advance payments. Advance payments are credited against the business tax and income tax due for the period. They are proven by a validated BIR Form No. 0605 and the Revenue Official Receipt, and a claim without that proof is disallowed.

Who is affected

• Sellers of jewelry, gold and other metallic minerals
• Non-resident alien individuals not engaged in trade or business in the Philippines
• Non-resident foreign corporations
• Owners and operators of hotels, inns and similar establishments