Summary
RR No. 6-2007 consolidates the regulations on advance Value-Added Tax (VAT) on the sale of refined sugar, and amends or revokes earlier revenue issuances on the subject.
Key points
- What counts as refined sugar. Refined sugar is sugar with a polarimeter reading of 99.5° and above, and raw sugar is below 99.5°. Cane sugar from a refining process, a Sugar Refinery, or a BIR-accredited mill production line with a quedan showing 99.5° and above is presumed to be refined sugar.
- Advance VAT before withdrawal. The owner or seller pays the advance VAT before refined sugar leaves the refinery or mill, and must first secure a Certificate of Advance Payment of VAT (CAPVAT) from the concerned RDO, LTS or LTDO. If ownership passes to a buyer other than a cooperative in a non-exempt transfer, the buyer pays the advance VAT.
- Exempt withdrawals. No advance VAT applies to withdrawals by a producer agricultural cooperative of good standing with the CDA, sales to another agricultural cooperative under Sec. 109(L), sales of refined A and D sugar to a direct exporter, and refined E sugar sold to a CBW food processor/exporter or a buyer in a special export processing zone. A cooperative that is not the sugar producer always pays advance VAT, and a cooperative sale to a trader is subject to VAT unless the trader is a direct exporter.
- Amount of advance VAT. The VAT rate of 12% applies to a base price of P 850.00 per 50 kg. bag for a Sugar Refinery and P 760.00 per 50 kg. bag for a Sugar Mill. The CIR may adjust the base price after consulting the SRA Chairman.
- Credits and refund option. Advance payments are credited against output tax on the actual gross selling price, and the CAPVAT is attached to the VAT declaration or return. Producers also get a presumptive input tax of 4% of the gross value of their purchases of primary agricultural products. Unutilized advance payments may be the subject of a Tax Credit Certificate (TCC) application filed within 2 years from the filing of the 4th quarter VAT return.
- Monthly reports. Refineries and mills, cooperatives and exporters of refined sugar from A, D or E sugar file information returns or reports not later than the 10th day after the end of the month. These cover owners, bags released or produced, and advance VAT paid.
Who is affected
- Owners and sellers of refined sugar
- Sugar refineries and mills
- Agricultural cooperatives
- Exporters and CBW food processors
Deadlines and effectivity
- Advance VAT: paid before refined sugar is withdrawn
- Reports: not later than the 10th day following the end of the month
- TCC application: within 2 years from filing of the 4th quarter VAT return
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.