RR No. 4-2015: Amends further Section 2 of RR No. 13-08, as amended by RR No. 13-2013, relative to the definition of raw sugar and raw cane sugar for Value-Added Tax purposes

Key points

1. Raw sugar. Raw sugar is sugar whose sucrose content by weight in dry state corresponds to a polarimeter reading of less than 99.5o. It is classified each production year as A (export to the United States Market), B (Domestic Market), C (reserved for but not yet matured for the Domestic Market), D (export to the World Market) and E (reclassified D sugar for sale to Food Processors/Exporters operating a Customs Bonded Warehouse or to an enterprise in the special processing export zone).
2. Raw cane sugar. Raw cane sugar means sugar made by a simple process of converting sugar cane without a mechanical or similar device, and refers only to muscovado. Only muscovado is exempt from VAT under Section 109(1)(A) of the Tax Code.
3. Centrifugal process. The centrifugal process is not in itself a simple process. Sugar produced by it, such as raw sugar and refined sugar, is not VAT exempt, and sugar as used in the Regulations means sugar other than raw cane sugar.
4. Advance VAT payment. Refined sugar and raw sugar, as defined, are subject to advance payment of VAT by the owner or seller before the sugar is withdrawn from any sugar refinery mill.

Who is affected

• Owners and sellers of raw sugar and refined sugar
• Producers of muscovado