Summary
RR No. 6-2015 imposes advance business tax (VAT or Percentage Tax) payments on the sale of raw and refined sugar, and sets the base prices, exemptions, credit rules and TCC treatment.
Key points
- Advance payment before release. The owner or seller pays the business tax on raw and refined sugar in advance, before any warehouse receipt or quedan is issued or before sugar is withdrawn from a refinery or mill. The mill proprietor may not issue quedans or allow withdrawal without proof of payment or exemption.
- Computation. Advance VAT is computed at the 12% VAT rate on a base price of P1,400.00 per 50 kg. bag for refined sugar and P1,000.00 per 50 kg. bag for all types of sugar. The Commissioner may adjust the base price depending on the prevailing market price. Non-VAT persons exempt under Section 109 (1)(V) of the NIRC pay an advance Percentage Tax of 3% of gross sales or receipts.
- Raw sugar for export. No advance VAT is collected on raw sugar classified as A, covered by quedans and intended solely for export to the USA under the sugar export quota, on representation by the Sugar Regulatory Administration. If audit shows it was not actually exported, or payment in acceptable foreign currency was not received or accounted for under BSP rules, the deficiency VAT with surcharge and interest is collected. The exemption does not cover the advance 3% Percentage Tax for non-VAT taxpayers.
- Raw sugar D and E. Raw sugar D and E pay advance VAT, refundable on showing sale and actual shipment abroad, supported by commercial documents, and payment in acceptable foreign currency or its equivalent in goods or services, accounted for under BSP rules.
- Exempt withdrawals. Exempt from advance VAT are withdrawal of raw cane sugar, withdrawal by a duly accredited and registered agricultural cooperative of good standing, and such a cooperative’s withdrawal of sugar sold to another agricultural cooperative.
- Credits and TCC. Advance payments are creditable against output tax based on the actual gross selling price, in addition to Section 110 input tax credits. The Certificate of Advance Payment and payment form are attached to the return. Unutilized advance payments at year end may be issued a Tax Credit Certificate at the owner’s option, Payments that are the subject of a TCC application cannot be carried over or credited against later output tax or Percentage Tax. The TCC excludes excess input tax.
Who is affected
- Owners and sellers of raw and refined sugar
- Sugar refinery and mill proprietors
- Non-VAT persons exempt under Section 109 (1)(V) of the NIRC
Deadlines and effectivity
- Effective May 1, 2015
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.