RMC No. 40-2015: Clarifies the nature and extent of the agricultural cooperative being the producer of sugar for exemption from advance VAT and Percentage Tax purposes pursuant to Section 5(b)(c) of RR No. 8-2015

Summary

RMC No. 40-2015 clarifies when an agricultural cooperative counts as a producer of sugar for exemption from advance VAT and Percentage Tax under Section 5(b)(c) of RR No. 8-2015.

Key points

1. Related provisions. The clarification is made in relation to Section 4(a) of RR No. 13-2008 and Section 8(b.2.1.2) of the Joint Rules and Regulations implementing Articles 60, 61 and 144 of RA No. 9520 (Cooperative Code of 2008).
2. Two requisites. A duly registered agricultural cooperative is the producer of sugar if both requisites are present: (a) it is the tiller, through its members, of the land it owns or leases; and (b) it incurs the cost of agricultural production of the sugar and produces the sugar cane to be refined.
3. If a requisite is missing. Without either requisite, the cooperative is not a producer of sugar. Its withdrawals of sugar for sale to non-members or to another agricultural cooperative are then subject to advance VAT or Percentage Tax.

Who is affected

• Duly registered agricultural cooperatives producing sugar

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.