RR No. 13-2007: Prescribes the policies and procedures for the advance payment of Value-Added Tax/Percentage Tax on the transport of naturally grown planted timber products

Summary

RR No. 13-2007 sets the policies and procedures for advance payment of Value-Added Tax or Percentage Tax on the transport of naturally grown and planted timber products.

Key points

1. Advance payment before transport. The owner or seller pays the VAT in advance to the BIR through Authorized Agent Banks before moving the timber from the place of production or concession. Where there are no AABs, payment goes to Revenue Collection Officers or deputized City or Municipal Treasurers.
2. Who must pay. Owners and sellers holding certain DENR permits or agreements are liable, such as Timber License Agreements, Industrial Forest Management Agreements and Tree Farm Lease Agreements. Timber from industrial tree plantations and from private lands with existing land titles and approved land applications is also covered.
3. Amount of advance VAT. The 12% VAT rate is applied to a value per cubic meter set by species group in a schedule. Examples are P1,400.00 per cubic meter for the Philippine Mahogany Group in Luzon and P95.00 per cubic meter for pulpwood, chip wood and matchwood. The Commissioner may adjust the valuation after prior consultation with the DENR Secretary.
4. Certificate of Advance Payment. After payment, the Revenue District Office issues a Certificate of Advance Payment of the VAT. Together with the BIR payment form and DENR documents, it is the authority to transport the timber. Without proof of payment, DENR and BIR agents may hold the transport or sale in abeyance.
5. 3% Percentage Tax owners. An owner with a BIR Form No. 2303 Certificate of Registration showing only 3% Percentage Tax is exempt from advance VAT but pays the advance 3% Percentage Tax. If the aggregate value of the products to be transported exceeds P1.5M, the advance VAT applies despite the certificate.
6. Crediting of advance payments. Advance VAT is credited against output VAT on the actual gross selling price, in addition to input tax credits under Section 110. Advance Percentage Tax is credited to the monthly or quarterly Percentage Tax Return, with the Certificate attached to the return.

Who is affected

• Owners and sellers of naturally grown and planted timber products
• Holders of DENR timber permits and agreements

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