RMC No. 105-2018 — Clarifies the payment of Excise Tax on Domestic Coal pursuant to the provisions of Revenue Regulations (RR) No. 1-2018, amending for the purpose RR No. 13-94 Digest | Full Text

RHAU OF INTERNAL H \ffiRffilE: OF THE PHILIPPINES OF FINANCE RECORD$ MGT, INTERNAT Quezon City \\1i December 1f 2018 iU, y*#;N[iurnrirrronnNDuM cIRCULAR No. I 0 5 - Lo t ( SUBJECT Clarifying the Payment of Excise Tax on Domestic Coal Pursuant to the TO Provisions of Revenue Regulations No. 1-2018, Amending for the Purpose Revenue Regulations No. 13-94 All Internal Revenue Officers and Others Concerned SECTION 1. SCOPE. This circular is issued to clarif,, the payment of excise tax on domestic coal under Revenue Regulations (RR) No. 1-2018, which provides for the revised tax rates on mineral products pursuant to the provisions of Republic Act (RA) No. 10963, otherwise known as the "Tax Refor"mfor Acceleration and Inclusion RAIN)" Law, amending for the purpose RRNo. 13-94. SECTION 2. BACKGROUND - Section 151 of the National Internal Revenue Code Q.{IRC) of 1997 , as amended, was further amended by RA No. 10963, which became effective on January 1,2018,to wit: "SEC. 48. Section 151 of the NIRC, as amended, is herebyfurther amended to read as follows: - (A) Rates of Tax. There shall be levied, assessed and collected on minerals, mineral products and quarry resources, excise tax as .follows; (1) On domestic or imported coal and coke, notyithstanding any incentives granted in any lav, or special law: Effective January 1, 2018, Fifty pesos (P50.00) per metric ton; Effective January l, 2019, One hundred pesos (P100.00) per metric ton; and Effective January l, 2020, One hundredfifty pesos (P150.00) per metric ton,' xxx xxx xxx " (Emphasis supplied) Pursuant to the said amendment, RR No. 1-2018 was issued amending RR No. 13-94. Section 3 of RR No. 1-2018, provides that: "SEC.3. Amending Section 5 of RR No. 13-94 xxx xxx xxx Coal produced'under Coal Operating Contracts entered into by the. government pursuant to Presidential Decree No'. 972 as well as those exempted

xxx SECTION 3. CLARIFICATIONS Excise tax on coal is a tax levied on the product, rather than on the performance, carrying on or the exercise of an activity, such as mining of coal. The general nile is that the producer of a product is the one liable for the excise tax thereon. Howev6r, since the excise tax is attached to the product itself, if the tax is unpaid and possession is transferred to the buyer, the buyer/possessor of the product can be made liable foi the excise tax. Relative thereto,-the second paragraph of Section 130 (A) (1) of the NIRC of 1997, as amended, states lhal "Should domestic products be removed frotm the place of produciion yithout the payment o.f Lhe tax, t!1e owner or person having poisession tiereof shdll be liable fol lhe tax d11e t(hAer)e9(1ry)".ofAtchceoNrdIiRnCglyo,^fin19s9it7u,aatiosnasmceonndetedm, p-alantdedfour nedaesre of the second paragraph Section 130 of collection urid fo, purposes of control, the producer shall act as collecting agent of the tax due from the first buyeripossessor and remit the same using BIR Form 22001\{ - Excise Tax Return for Mineral Products to the Bureau of internal Revenue (BIR), reflecting therein the buyer's name and the TIN. In view of the foregoing, the following shall be enforced: 1. In the event that the excise tax on locally produced coal is not paid by the producer ofthe product, the excise tax due thereon shall be collected irom the first buyer / possessor. 2. The excise tax collected from the buyer /possessor shall be reflected separately-in theinvoice issued by the producer covering the coal sold. This amount collected from the first buyer / possessor shall be payable to the BIR taondthsehaBll InRotsfhoarmll_ptearet xotfintgheuissheellidngupproicnereomf tihtteanccoealo. f?hthi:eesxacimsee producer to the BiR. tax due the by Illustration: To record sales: Receivable - Trade i}1}1 100,000 Receivable - Non-trade (excise tax) 1,000 -*=n. Revenue r,. 100,000 tli e Due to BIR (for the excise tax collected from buyer 1,000 is -! J Z Upon payment and remittance to BIR cl rx Due to BIR 1,000 1,000 i01,000 I ttI Cash Cz Tr C Upon coliection fioin first buyer TT Cash Receivable - Trade 100,000 Receivable - Non-trade 1,000 As a collecting agent of the excise tax due from the first buyer/posseisor, th-e producer shall f,le via EFPS and remit the excise tax to the BIR using BIR Form 2200 M- Excise Tax Return for Mineral Products, as prescribed under RR No. 1-2002, within ten (10) days from the date of iuch sale,

transfer or disposition, together with the submission of reievant documents proving the transfer or disposition. 4. Finally, in the case ofa producer subject to excise tax, such producer shall be subject to all the administrative and reportorial requirements as prescribed under applicable existing rules and regulations. SECTION 4. TRANSITORY PROVISIONS The following transitory provisions shall be strictly observed by all concerned: The excise tax due on domestic coal removed for domestic consumption shall be collected by the producer of the domestic coal frorn the first buyer/ possessor effective January 1,2018 (effectivity of the TRAIN Law); b. Tahmeopurnotduocferesxhcailsl eretmaixt oonnordboemfoerestDicecceomabl ecro3lle1,ct2e0d18frtoomthethBeIRfitrhset buyer/possessor covering the period January 1,2018 to November 30, 201 8 using BIR Form 22A0 M, without increments (surcharge and interest) if settled within the herein prescribed period. Henceforth, excise tax collected by the producer on domestic coal removed and sold for domestic consumption shall be filed / remitted within 10 days from the date of sale, transfer or disposition. L. The producer of the domestic coal shall provide to the BIR the data on production, volume of removal and sale covering the period January 1, 2018 to November 30,2018 for the determination of the amount of excise tax to be remitted to the BIR. d. A separate revenue issuance shall be issued covering excise tax treatment on domestic coal removed for export. All concerned revenue officials and employees are hereby enjoined to give this circular as wide a publicity as possible. /ff"*H1 CAESAR R. DULAY BTJREAU OF INTERNAL REVhrvue F a21932 Commissioner of Internal Revenue D- lt) U lii;.cCIkLi.t {nG'f . Divistt]r\ PAGE.l OF 3