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RR No. 2-2018: Provides the revised tax rates  and other implementing guidelines on Petroleum Products pursuant to the provisions of RA No. 10963 (TRAIN Law)

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Summary

RR No. 2-2018 sets the revised Excise Tax rates and implementing guidelines for petroleum products under RA No. 10963 (TRAIN Law).

Key points

  1. Scheduled rates. Rates are set for January 1, 2018, 2019 and 2020. Examples are lubricating oils and greases at P8.00, P9.00 and P10.00, regular gasoline and naphtha at P7.00, P9.00 and P10.00, and diesel fuel oil at P2.50, P4.50 and P6.00. Naphtha, pyrolysis gasoline, LPG and petroleum coke used as raw material or feedstock in the listed cases are taxed at P0.00.
  2. Where the rates do not apply. They do not apply to lubricating oils and greases made from basestocks and additives on which Excise Tax was already paid. Denatured alcohol mixed with gasoline already taxed is taxed on its alcohol content only, unless special laws provide otherwise. Denatured alcohol of not less than 180 degrees proof 90% absolute alcohol is deemed removed for motive power, unless shown otherwise.
  3. Credits and suspension. Excise Tax paid on purchased basestock (bunker) used in making excisable articles is credited against the tax due. Excess tax on raw materials from manufacturing, blending, processing, storage and handling losses gives no refund or credit. For 2018 to 2020, a scheduled fuel increase is suspended when the three-month average Dubai crude oil price based on MOPS reaches or exceeds USD 80 per barrel.
  4. Marking and metering. Official fuel marking or similar technology is required on taxed petroleum products such as unleaded premium gasoline, kerosene and diesel fuel oil. Manufacturers must have counting or metering devices, and importers of finished products must have BIR-accredited metering devices. The Department of Finance keeps a registry of manufacturers and importers and requires a real-time inventory.
  5. Inventory submission. Oil companies and owners, operators or lessees of storage depots submit notarized inventories as of midnight of December 31, 2017, due on or before January 15, 2018. Similar inventories are due as of December 31, 2018, 2019 and 2020. Stocks of a taxpayer that fails to submit are subject to the new rates as of January 1, 2018, 2019 and 2020.
  6. Old stock removals. Inventories taken before each effectivity date are liquidated on a First-In First-Out basis. Withdrawal Certificates for old-rate stocks must be stamped STOCKS ON HAND PRIOR TO APPLICABLE DATE OF EFFECTIVITY. Removals without that stamp are taxed at the new rates.

Who is affected

  • Oil companies
  • Owners, operators or lessees of storage depots
  • Manufacturers and importers of petroleum products

Deadlines and effectivity

  • Rates effective: January 1, 2018, January 1, 2019, January 1, 2020
  • Inventory as of December 31, 2017: due on or before January 15, 2018
  • Later inventories: as of December 31, 2018, 2019 and 2020

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.