Summary
RMC No. 18-2013 further clarifies the taxability of distilled spirits under RMC No. 3-2013, focusing on Excise Tax on ethyl alcohol and ethanol and surety bond requirements.
Key points
- Imports. Importation of ethyl alcohol or ethanol for resale or for making compounded liquors is subject to Excise Tax. The exception is an importer holding a BIR Permit to Operate (as importer or compounded liquor manufacturer) that posts a surety bond in addition to the Section 160 importer’s bond.
- Surety bond amount. The bond equals the average total value of imports for a two-month period, being the estimated yearly value divided by six months, using the Bureau of Customs value. Distilleries selling directly to compounded liquor manufacturers post a similar bond based on sales.
- Other removals. Sale without Excise Tax as raw material requires the buyer to hold a Permit to Operate as compounded liquor manufacturer. Ethyl alcohol removed for biofuel blending under RA No. 9367 or for industrial and pharmaceutical use must be denatured to avoid Excise Tax. Removal for rectification is conditionally tax-exempt, with the rectifier paying under Section 137.
- Shortfall and liquidation. Excise Tax above the bond amount is paid to the BIR immediately without prior demand. An importer reselling to others submits a notarized liquidation statement within 10 days after each two-month period.
- Compounded liquors and tolling. The initial manufacturer’s bond equals the Excise Tax due on compounded liquors removed in the previous year. In tolling and bottling arrangements, the owner of the alcohol products pays the Excise Tax before removal.
- No credit or refund. Excise Tax already paid on ethyl alcohol under RMC No. 3-2013 gets no tax credit or refund and is not deducted from the Excise Tax due on compounded liquors.
Who is affected
- Importers of ethyl alcohol or ethanol
- Distilleries
- Manufacturers of compounded liquors
- Rectifiers
Deadlines and effectivity
- Liquidation statement: within 10 days after every two-month period
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
Copies of BIR issuances are hosted here for reference. For the official version, check bir.gov.ph. Summaries by Tax Resources PH are not a substitute for the full text or professional advice.