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RR No. 4-2020: Implements the provisions of RA No. 11256, otherwise known as “An Act to Strengthen the Country’s Gross International Reserves, amending for the purpose Sections 3 and 151 of the NIRC, as amended, for other purposes”

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Summary

RR No. 4-2020, issued February 18, 2020, implements Republic Act (RA) No. 11256, which amends Sections 32 and 151 of the NIRC to strengthen the country’s Gross International Reserves.

Key points

  1. Income tax and excise tax exemption. Income from the sale of gold to the Bangko Sentral ng Pilipinas (BSP) by registered Small-Scale Miners (SSMs) and accredited traders is excluded from gross income and exempt from Income Tax and Withholding Taxes. The same applies to sales by registered SSMs to accredited traders for eventual sale to the BSP, and Excise Tax is not levied on these sales. Excise Tax already paid before the sale to the BSP may be claimed as a refund or credit with the Commissioner of Internal Revenue.
  2. TIN and BSP Certification. SSMs and accredited traders must obtain a TIN, which is the basis of the exemption. The BSP Certification, issued on a valid Small-Scale Mining Contract for SSMs or on complete accreditation for traders, is the basis for the exemptions and non-withholding.
  3. Liability if exemption does not apply. If the exemption is found inapplicable to a person purporting to be a registered SSM or accredited trader, that person is primarily and solely liable for deficiency taxes.
  4. Gold delivery documents and reports. SSMs issue an Acknowledgment of Gold Delivery and Sale stating their TIN to accredited traders, who submit it to the BSP. All gold sold to the BSP by accredited traders is presumed bought from SSMs. The BSP reports sales transactions to the BIR monthly.
  5. Transitory period. SSMs and traders have one (1) year, extendable for a period not exceeding three (3) years, from the effectivity of the IRR to meet registration and accreditation requirements. During this period the BSP issues a temporary certification on proof of a pending application, and holders enjoy the exemptions if they follow the procedure under Section 10 of the IRR of RA No. 11256.

Who is affected

  • Registered Small-Scale Miners (SSMs)
  • Accredited gold traders
  • Bangko Sentral ng Pilipinas (BSP)

Deadlines and effectivity

  • Transitory period: one (1) year from effectivity of the IRR, extendable for not more than three (3) years

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.