RR No. 6-2012 — Clarifies the taxation on the sale of gold and other metallic minerals to Bangko Sentral ng Pilipinas and other persons or entities (Published in Manila Bulletin on April 4, 2012)

BUREAU OF INTERNAL REVENUE REPUBLiC OF THE PHILIPPINES DEPARTMENT OF FINANCE Quezon City RECORDS MGT. BIYISION BUREAU OF INTERNAL REVENUE RECEIVFD 'April 2, 2012 APR 0 2 2012 2:50 Wa .M.

REVENUE REGULATIONS NO. (o-3012

SUBJECT REVENUE REGULATIONS No. 7-2008, AND FURTHER AMENDING SECTION 2.57.2 (T) OF REVENUE REGULATIONS NO- 2-98, AS AMENDED. BANGKO SENTRAL NG PILIPINAS AND OTHER PERSONS OR ENTITIES, AMENDING TAXATION ON THE SALE OF GOLD AND OTHER METALLIC MINERALS TO

TO OTHERS CONCERNED BANGKO SENTRAL NG PILIPINAS, ALL INTERNAL REVENUE OFFICERS, AND

SECTION 1. Scope. -- Pursuant to the provisions of Section 244, in relation to Section 245 of the Sentral ng Pilipinas (BSP), and further amending Section 2.57.2 of Revenue Regulations hereby promulgated to supersede Revenue Regulations No. 7-2008, clarify the taxability of sale of gold by any person or entity to another person or entity other than the Bangko No. 2-98, as amended. National Internal Revenue Code (NIRC) of 1997, as amended, these Regulations are

SECTION 2. Background. - In a Decision by the Court of Tax Appeals in CTA Case No. 7788 {1}, 2nd Paragraph, of the 1997 NIRC. entitled Bangko Sentral ng Pilipinas vs.Commissioner of internal Revenue, dated February 24, 2010, the Court held that should domestic products be removed from the place of production without the payment of excise taxes, the owner or person having po5session thereof shall be liable for the tax due thereon, pursuant to Section 130 (A)

added tax, in the case of importation. more than 6 years since the effectivity of RA No. 7729) excise tax on all metallic minerals, based on the actual market value of the gross output thereof at the time of removal, in the case of those locally extracted or produced; or the vaiue used by the Bureau of Customs in determining tariff and customs duties, net of excise and vaiue- Under Section 151 (A) (3} (a), (b) of the 1997 NIRC, there shall be levied assessed and coliected on minerals, mineral products and quarry resources, a 2% (since it has been

minerals shall be held liable for the excise taxes due thereon. Import Entry and Internal revenue Declaration and Official Receipt issued by the Bureau of Customs, for imported goods; and 2} certified true copy of Excise Tax Return {BiR Form No. 2200M) and machine-validated deposit slip of the bank where payment and filing has been made, for locatly bought gold. Absent said proof, possessors of metallic show proof that the excise taxes thereon has been paid. Such proof may include the following: 1} certified true copy of the Authority to Release Imported Goods{ATRiG) and Possessors of metallic minerals, whether imported or local, must therefore be able to

MAUNRTIONG

In addition, the sale of these metallic minerals is an economic activity subject to regular income tax. In order to ensure the coliection of income taxes and monitor the activity of persons engaged in these transactions, sale of gald and other metallic minerals shouid be subjected to withnalding taxes.

$ECTION 3. Duties and Obligations (Payment of Taxes). -

{a) Excise Tax. - Metallic minerais are subject to the two percent (2%) excise tax rate has been paid thereon, otherwise, they shall be assessed and be held liable for the payment thereof. Metallic minerals discovered in the possession of persons who cannot show proof of payment of excise taxes thereon are presumed to have been removed on the day of discovery. Further, for purposes of this Regulations, possession shall mean, not only the actual, current physical possession of said Possessors of said metallic minerals must be able to show proof that the excise tax metallic minerals, but shall tikewise cover the inclusion of said minerals in the inventory of a person or entity at any given point in time. based on either the actual market value of the gross output thereof at the time of removal, in case of those localiy extracted or produced; or the value used by the Bureau of Customs in computing tariff and duties, in case of importations

{b} Value-Added Tax. - Sales of metailic minerals to persons and entities, except sale of gold to the Bangko Sentral ng Pilipinas, is subject to twelve percent (12%) Value- Added Tax if the value thereof exceeds the threshold set by the 1997 NIRC and existing issuances.

Saies of gold to the Bangko 5entral ng Pilipinas is subject to Value-Added Tax at the rate of zero percent (0%) as prescribed under Section 106 (A) (2) (a) (4) of the 1997 NIRC, if the seller is a VAT registered taxpayer.

(c) Income Tax. -- Sellers are subject to Income tax at the rate prescribed under Section withhold five percert (s%) of gross payments made and remit the same to the Government. the case of corporations. Further, buyers of said metailic minerals are required to 24 (A) in case of individual taxpayers, and under Section 27 {A) of the 1997 NIRC in

Section 2.57.2{T} of Revenue Regulations No. 2-98, as amended by Revenue Regulations No. 17-2003, is hereby further amended as follows:

resources as defined and discussed in Section 151 of the Code.- income payments on to silver, gold, marble, granite, sand, boulders and other materiais/products -Five purchases of minerals, mineral products and quarry resouces, such as but not fimited percent (5%) "(T) income payments on purchases of minerals, mineral products and quarry

In order for a seller/possessor of said metallic mineral to be able to'ctaim the costs of said metallic mineral, said seller/possessor must be able to show proof of

BUREAU OF INTERNAL RIVENUE RECORDS MGT. DIVISION APR 02 2012. 3:30p.

M RECEIVED

withholding and remittance of the five percent (5%} withholding tax on said

disailowed. product, otherwise all claimed costs and expenses associated therewith shall be

hereby constituted as agents for the collection of the two percent (2%) excise tax on metallic minerals and the five percent (5%) creditabie withholding tax thereon. SECTION 4. Mode of Collection and Payment of Taxes. - All buyers of metallic minerals are

and/or pay said taxes. All penalties under existing laws and Regulations shall attach to buyers who fail to withhold

creditable withholding taxes collected from payments made to sellers of metallic minerals shall be the Accredited Agent Bank (AAB) having jurisdiction over its principaf place of business on or before the remitted to the BIR by filing the corresponding Excise Tax Return (BiR Form No. 2200-M) and the Creditable Withholding Tax Return {BIR Form No. 1601-E) and paying the amount of taxes withheld to SECTION 5. Time and Manner of Filing and Payment of Taxes Withheld. - All excise taxes and

tenth (1oth) day of the foliowing month.

fustration :

(a) Sale by a small-scale miner to a middleman/trader of 10 ounces of gold with actual market value of P2,00Q/ounce for P15,000

{i { Excise taxes due Creditable Withholding Tax due = Php 400.00 or {10 oz.x P 2,000 x 2%} =Php 750.00 or (P 15,000 x 5%)

{b} Sale by a middleman/trader of 10 ounces of gold with actual market value of P2,100/ounce for P20,500 to the BSP

Excise taxes due =Php 0.00

has been withheid and remitted to the BIR. If it cannot prove said fact of payment pursuant to issuances that will be released later on, it is liable for the payment of excise taxes on the This is assuming that the middleman/trader can prove that the excise taxes on the said gold

entire actual market value, thus:

Excise tax due =Php 420 or {10 oz.x P2,100 x 2%}

{ii} Creditable Withholding Tax due =Php 1,025 {P20,500 x 5%}

costs/expenses attributable to said purchases shall be disallowed for income tax purposes. For the middleman/trader to be able to claim the expenses/cost attributable to his purchase of gold in his final income tax return, he must be able to produce proof of withholding and remittance of creditable income taxes withheld from the seller. Otherwise, the

(c) Purchase by BSP of gold -- the BSP, regardiess whoever is selling, is obliged to collect the 2% excise tax on the actual market value of the gold sold to it, regardless of the purchase price it paid for the transaction, and remit the same to the BIR. If the seller is able to produce

BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION APR 02 2012 2:5D.8M

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proof of payment of excise taxes on said goods, the BSP shall not be liable anymore for payment of excise taxes.

BsP is likewise obliged to withhold and remit to the BIR the Creditable Withholding Taxes due from the sale, regardless whoever is selling.

The withholding tax return shall be filed and payment shall be made within ten (10) days shall be filed on or before January 15 of the following year. after the end of each month, except for taxes withheld for the month of December, which

for electronic filing of the applicable withholding tax returns {BIR Form No. 1601-E} and payment of taxes due thereon remains on the 15th day of the following month. However, if the BSP availed of the Electronic Filing and Payment System (EFPS), the deadline

other regulations, orders or portions thereof which are inconsistent with the provisions of these Regulations are hereby amended, modified, or repealed accordingly. SECTION 6. Repealing Clause.- Revenue Regulations No. 7-2008 is hereby superseded, while all

SECTION 7. Effectivity Clause. -- These Regulations shall take effect immediately

U CESAR V. PURISIMA Secretary of Finance *

Recommending Approval: 004666

Commisfioner of Internal Revenue KIM S. JACKNTO-HENARES 008711 RECORDS MGT. DIVISION BUREAU OF INERNAL RTYENUS APR 0.2 2012 3:50PM

RECEIVEE