RR No. 2-2018 — Provides the revised tax rates and other implementing guidelines on Petroleum Products pursuant to the provisions of RA No. 10963 (TRAIN Law) (Published in Manila Bulletin on January 26, 2018) Digest | Full Text | Annex A

REPUBLIC CF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OQIbBEBBL REVENUE RE CE January 5, 2018 REVENUE REGULATIONS NO. E' XOIS SUBJECT Providing for the Revised Tax R.ates and other Implementing TO Guidelines on Petroleurn Products Pursuant to Republic Act. No. 10963, othervvise known as the "Tax Reform for Acceleration and Inclusion (TRAIN) Law" All Internal Revenue Officials and Others Concerned SectionS2E4C5 ToIfOtNhel.NaStCioOnaPlEI.n-ternPaulrsRueavnet ntuoethCeodperovQis.JioIRnCs ) of Section 244 \n relation to of 1997. as amended. these Regulations are hereby promulgated to implement the provisions on Petroleum Products under Section 84 of Republic Act No. 10963. amending provisions of Section 148. Chapter V of Title VI Excise Tax on Petroleum Products, of the NIRC. as amended. shall SEC. 2. REVISED EXCISE RATES AND BASES OF SPECIFIC TAX. f-olloTwhienrge be collected on refined and manufactured mineral oils and motor fuels. the excise taxes which shall attach to the goods hereunder enumerated as soon as thev are in existence as such: PRODUCTS EFFECTIVITY Janaury, 1. 2020 Januan', l. 201 8 January 1.2019 P10.00 (a) Lubricating oils and greases. including but not lirnited to base stock for lube oils and greases, high P8.00 P9.00 P10.00 vacLlurn distillates. aromatic extracts and other Ps.00 sirnilar preparations, and additives for lubricating P7.00 P9.00 oils and greases, whether such additives are P3.00 P4.00 petroleum based or ltot, per liter and ki lograrn respectively, of volume capacity or weight. (a. l) Locally produced or irnpofted oils previously taxed but subsequentlv reprocessed. re-refined, recycled, per liter and kilograrn of volume capacity or weight. (b) Processed gas, per liter of volume capacjty. (c) Waxes and petrolatllm per kilograrn. (d) Denatured alcohol to be used for rnotive power, per liter ol volurne capaciry, (e) Asphalts, per kilogram. (fl Naphtha, regular gasoline, pyrolisis gasoline and other sirnilar products of distillation. per liter of voiume capacitl' (g) Unleaded premium gasoline, per liter of volume capacit_v (h) Kerosene. per liter of volume capacity \. r

(i) Aviation turbo.jet fuel, aviation gas, per liter of P4.00 P4.00 P4.00 P2.50 P4.s0 P6.00 volurne capacity P1.00 P2.00 P3.00 P0.00 P0.00 P0.00 () Kerosene, when uded as aviation fuel, per liter of volurre capacit-v (k) Diesel fuel oil, and on sirnilar fi"rel oils having rnore or less the salre generating power, per liter of volurne capacity (l) LiqLrefied petroleum gas used for motive power, oer kilosram (m) Bunker fuel oil, and on sirnilar oils having rnore or less the same generating power, per liter of volume capacity (n) Petroleum coke, per metric ton (o) Liquefied petroleum gas. per kilogram (p) Naphtha and pyrolysis gasoline, when used as a rau,material in the production of petrochemical products or in the refining of petroleum products, or as replacement fuel for natural-gas-fired-combined cycle power plant. in lieu of locally-extracted natural gas during the non-availability thereof, per liter of voltrrne capacity (q) Liquefied petroleum gas, when used as raw material in the prodLrction of petrochemical products, per kilogram (r) Petroleurn coke, when used as feedstock to any power generating facilitv. per metric ton SEC. 3. EXCEPTION TO REVISED EXCISE TAX RATES. - The revised rates Section under 2 shall not apply under the following instances: a) Lubricating oils and greases produced from basestocks and additives on r.r,hich the excise tax has already been paid shall no longer be subiect to excise tax. b) Unless otherwise provided by special laws, if the denatured alcohol is mixed with gasoline, the excise tax on which has already been paid. only the alcohol content shall be subject to the tax herein prescribed. The removal of denatured alcohol of not less than one hundred eighty degrees ( I 80') proof (ninety percent (90%) absolute alcohol) shall be deemed to have been removed for motive power. unless shown otherwise; SEC. 4. CREDITABLE EXCISE TexAciXsa.b-le The excise tax paid on the purchased articles and forming paft thereof shall be basestock (bunker) used in the manufacture of credited against the excise tax due thereon. For purposes of these regulations. any excess of excise taxes paid on raw materials resulting from manufacturing, blending. processing, storage and handling losses shall not give rise to a tax refund or credit. 2018 SEC. 5. SUSPENSION OF SCHEDULED oINn CfuRelEaAsSimEp.o-sedFoinr the period covering to 2020, this section shall be the scheduled increase in the excise tax suspended when the average Dubaicrudeoil based on Mean Of Platts Singapore (MOPS) lorthree (3) months prior to the scheduled increase of the m8nth reaches or exceeds eightl,'dollars (USD 80) per barrel. A separate Revenue Regulation (RR) shall be issued for this purpose. SEC. 6. MANDATORY MARKING OF ALL PETROLEUM bientrftirAxT${ry', T':oi:r ::":'T'l:i'rechnorogv on petroreum (v" ,;#r#& PRODUCTS. -are producrs rhar IIE,CORI'S }TGT. DN/ISICN JAN2420lEW"!,-qr* t:r RECEIVEIU

refined, manufactured. or imporled into the Philippines. and that are sub-ject to the payment of taxes and duties. such as but not limited to unleaded prenriuln gasoline. kerosene. and diesel fuel oil shall be required. It shall be implemented in accordance witli rr:les and regulations to be issued by the Secretarl,of Finance in consultation lvith the Commissioner o1- Intemal Revenue and Comnrissioner of Customs and in cooldination u,ith the Secretary of Energ1,. SEC. 7. MANUFACTURERS AND/ OR IMPORTERS TO PROVIDE THEMSELVES WITH COUNTING OR METERING DEVICES TO DETERMINE - VOLUME OF PRODUCTION AND IMPORTATION. ManLrfhctulers oloil products sub.ject to excise tax shall plovide themselves r'r,ith such necessarll nLrrnber of suitable courrtiltg or metering devices to determine as accllratell, sr possible the volunre. quantify- ol afticles produced by thern under the rules and regulations promulgated by the Secretary of Finance. Lrpon recorllnrendation of the Commissioner o1' Internal Revenue: Proviclecl. Tlrat the Department o1'Finance shall maintain a registry of all petroleurr rranufacturers and/ or inrpofiers and the afiicles being manufactured and/ or imporled by them: Proyicled. ./irtlter. That the Depaftnrent of Finance shall mandate the creation of a real-tinte inventory of petroleum articles being manufactured, imported or found in storage depots of suclr petroleurn manuf-acturers and/ or impofiers: Providetl. ./inally, That irnporters of finished petloleLrnr products shall also provide themselves u,ith Bureau-accredited nretering devices to deternrine as accurately as possible the volume of petroleurr products imporled by them. Act, theSfBolClo.w8in. gTRgAuiNdeSliInTeOs RshYallPbReOfoVllIoSwIeOdNd. u-ringFtohrethtreanesfifteocrytivpeeriimodp:lementation of the a) Submission of Stock Inttenlories. Concerned oil companies. owners, operators or lessees of storage depots shall submit duly rrotarized inventories of all petroleunr products as of midnight of December 31,2017 to Excise LT Field Operations Division (ELTFOD) in the case of taxpayers registered within Revenue Region (RR) Nos. 4 (San Fernando, Pampanga). 5 (Caloocan), 6 (Manila). 7 (Quezon Cit_v). 8 (Makati City) and 9 (San Pablo City) or to the concerned Excise Tax Area (EXTA) in the case of taxpayers registered outside of RR 41o9. on or before January 15, 2018. in the prescribed fbrrnat in Annex "A''. Likewise, similar inventories slrall be sLrbrnitted as of midnight of Decenrber 31. 20i8. Decentber 31. 2019 and December 31, 2020. These sworn statements shall liker,vrse be subjected to verification as required under existing regulations and issuances. ln the case of failure to submit tlie required inventories by any of the aforesaid taxpayer. petroleunr products found in their possession as ofJanuary, 1, 20 I 8. January, 1. 20 I 9 and January 1 - 2020 shall be subjected to the new excise tax rates. b) Accotrnling./br.stocks or invenlor! of goods a.flcr each date of e.ffaclit,ilt o./ thc rtev' excise lax rule,\. These invelrtories of petroleunr products taken prior to each date of effectivitv shall be liquidated and accounted for on a "First-ln Firsl-OLrt" (FIFO) method of inventory. c) ls,suance of llithdrcnral Certificate.s. All Withdrawal Cerlificates issued covering the removals of petroleLrm products sub.iect to the old or previor.rs tax rates prodLrcts shall be prominently stamped with the phrase "STOCKS ON I-IAND PRIOR TO APPLICABLE DATE OF EFFECTIVITY". The renrovals of finished goods rvhere the accompany'ing Withdrar,val Ceftificate/s do not bear such information shall be " nnrsic* RURNAU OF II{TEIWAL REVMflIS t\urt-j/ t TTECORDS MGT. JlADN :r4-I0Z/01\B. M:- 7 "y H x.r,# E* T Frr ..!q :. d:r -.,E:?1. 4 *' +, i- r,.

sub-iect to the ner,v excise tax rates inrposed under these Regulations a1 the time ol its actual renroval, even if the sarne \vere taken from the old or previous inventory. be sub.ieScEt CtoTtIhOeNco9r.rePsEpoNnAdLinTgIEpeSn.a-ltiesViporloavtiiodnesd of the provisions of these Regulations shall for under Title X o{'the NIRC of 1997. as arnended. and applicable regulatiotrs. - SECTION 10. REPEALING CLAUSE. All rules and regulations inconsistent with the provisions of these Regulations are hereby repealed or amended accordingly. SECTION 11. pEuFbFlicEaCtioTnIVinITaYt .lea-st These Regulations slrall take efl'ect inrnrediatell' lbllowing its complete one (1) ner,vspaperol'generalcirculation. Recommending Approval : SecJreAtallry'1 of Finance 1 -/,CYAE*SAARt3R.1DU,LAY 2018 Conrm issiorrer of l utenral Revenrre II]T]I]I.I1] OF INTERNAT REVENIIE MFT" DI11$C}{ a 12 47 0 A. tA. : 4D BIR TRAIN IRRiRR Drafting Corrrmittee ti i,pC'.lnns t0 JAN ;;4 2018 RECE firyff