RR No. 4-2022: Implements Section 295(F), in relation to Section 294, both of the NIRC of 1997, as amended by RA No. 11534 (CREATE Act), on the tax treatment of the importation of petroleum and petroleum products into, and subsequent transfer, transport and/or withdrawal through and from Freeport Zones and Economic Zones

Summary

RR No. 4-2022 implements Section 295(F) in relation to Section 294 of the NIRC, as amended by RA No. 11534 (CREATE Act), on the tax treatment of petroleum imported into and moved through Freeport Zones and Economic Zones.

Key points

1. VAT and Excise Tax on entry. The party that entered or imported the petroleum pays the VAT and Excise Tax to the Bureau of Customs before any later transfer, transport or withdrawal.
2. Refund of taxes paid. Taxes may be refunded for petroleum exported or sold to listed entities, such as registered export enterprises, international shipping or air transport operators and exempt entities. A claim is filed with the BIR, and no refund is granted without proof that the petroleum was actually transferred, delivered, sold and used for those purposes.
3. No refund on local sales. No refund is granted for products the Zone enterprise later sells into the customs territory or to another Zone enterprise or party without tax privileges, except fuel for international operations. Possessors must show proof that taxes were paid.
4. Imports by export enterprises and refineries. Petroleum imported by a registered export enterprise for its project is VAT exempt but subject to Excise Tax. A refinery’s crude oil imports under fiscal incentives are exempt from duties and taxes under Section 295(G).
5. Release and permits. For each transfer, transport or withdrawal, the importer must get an ATRIG from the ETRD, pay taxes and obtain a Withdrawal Certificate from the ELTFOD. Importers also need a Permit to Operate from the ETRD.
6. Registering tank facilities. Owners, lessors or operators of tank facilities, depots or terminals register with the BIR office for their region and submit listed documents within fifteen (15) days from effectivity. The BIR issues permits within thirty (30) days from receipt of the documents.

Who is affected

• Importers and Zone-registered enterprises dealing in petroleum
• Owners, lessors and operators of tank facilities, depots and terminals

Deadlines and effectivity

• Documents due within fifteen (15) days from date of effectivity
• Permits issued within thirty (30) days from receipt of documents

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