RMC No. 35-2023 — Clarifies the application of the Eighteen (18)-Month Transitory Period in RA No. 11900, as reiterated in its Implementing Rules and Regulations and RR No. 14-2022

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

13 March 2023

REVENUE MEMORANDUM CIRCULAR No. 35- 2023

SUBJECT: Clarifying the Application of the Eighteen (18)-Month Transitory Implementing ' Rules and Regulations (IRR) and Regulations (RR) No. 14-2022 Period in Republic Act (RA) No. '11900, as reiterated in' its Revenue

TO All Revenue Officers, Employees and Others Concerned

This Circular is being issued to clarify the application of the eighteen (18)-month transitory period in Republic Act (RA) No. 11900, or the "Vaporized Nicotine and Non Nicotine Product Regulation Act", as reiterated in its Implementing Rules : and Regulations (IRR) and Revenue Regulations (RR) No. 14-2022, in order for "the manufacturers, distributors, importers and retailers of Vaporized Nicotine and Non- Nicotine Products or their devices, and Novel Tobacco Products to comply with the requirements set forth therein.

I. Background:

Non-Nicotine Products, and their devices, and Novel Tobacco Products. It lapsed into distribution, use, advertisement, promotion and sponsorship of Vaporized Nicotine and RA No. 11900 regulates the importation, assembly, manufacture, sale, packaging

law on 25 July 2022.

in consultation with the Food and Drug Administration (FDA), shall issue its necessary IRR. Section 27 also provides that the manufacturers, distributors, importers. and retailers of Vaporized Nicotine and Non-Nicotine Products, and their devices, and Novel Section 24 of the law provides that the Department of Trade and Industry (DTI).

Tobacco Products shall be given an eighteen (18)-month transitory period from"the issuance of the IRR to comply with its requirements.

On 24 October 2022, Revenue Regulations (RR) No. 14-2022 was issued. it

and base of excise tax on Novel Tobacco Products; (il) registration of the business as Tobacco Products, including registration of online sellers or distributors; and, (iin) implements the provisions of RA No. 11900 by providing, among others, the () tax rate manufacturer or importer of Vaporized Nicotine and Non-Nicotine Products and Novel registration of brand and variants of Vaporized Nicotine and Non-Nicotine Products and Novel Tobacco Products. Section 9 thereof states that the manufacturers,.importers, distributors and retailers of Novel Tobacco Products shall be given an 18-month transitory period from the issuance of iRR to comply with its reguirements.

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On 5 December 2022, the DTi issued the iRR of RA No. 11900. The IRR was published in the newspapers of general circulation on 13 December 2022. It provides for the requirements pursuant to RA No. 11900 to be followed and observed' by the manufacturers, distributors, importers and retailers of Vaporized Nicotine and Non- Nicotine Products or their devices, and Novel Tobacco Products.

Il. Clarification:

excuse the (18)-month transitory period'in the law to delay compliance with the requirements set forth in RA No. 11900, as reiterated in its IRR and RR No. 14-2022. Let it be clarified that the (18)-month transitory period applies only to the requirements The Bureau has been receiving reports that some taxpayers are using' as an

of Product Standards and Product Registration. The rest of the executory provisions of the law, or the other requirements, are effective immediately. This is the clear tenor of Section 2, Rule XVII of the IRR, thus:

"Section 2. Transitory Provision. Manufacturers, distributors, importers and retailers of Vaporized Nicotine and Non-Nicotine Products or their devices; and Novel Tobacco Products shall be given an eighteen (18)-month transitory period from the issuance of this IRR to comply with the requirements of product

are effective immediately." (underlining supplied). standards and product registration. The rest of the executory provisions

The requirements of Product Standards and Product Registration referred to herein are found in Rules X and XI of the IRR, which read:

Product Standard Requirements "Rule'X

for the safety, consistency, and quality of the covered products requiring registration under Rule 1 Section 3 of this IRR;2 Provided, that vapor product with The BPS1, in consultation with the FDA, shall set the product standards

Compliance with the product standards shall be mandatory. nicotine content shall not exceed sixty-five milligrams per milliliter (65mg/ml)

products. The BPS shall issue separate technical regulations for the covered

Product Registration Rule X!

product registration and certification with the BPS by submitting information demonstrating conformity with the technical regulations set by the office. All manufacturers and importers of the covered products shall apply for

2 These are: (1) Vapor Products or Vapor Product Refills; (2) Vapor Product Devices; (3) HTP Consumables; (4) HTP Devices; 1 Bureau of Philippine Standards and, (50 Novel Tobacco Products. BUREAU OP INTEFNALREVENUE TamITND 8:5GA.M.1 MAR 2 0 ZOZ3

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health warning may be sold to the general public." Products, their devices, and Novel Tobacco Products with the applicable graphic Only BPS registered and certified Vaporized Nicotine and Non-Nicotine

2022 other than Products Standards and Product Registration shall be effective immediately. Among those important requirements are: Therefore, the requirements set forth in RA No. 11900, its IRR and RR No. 14.

(1) Registration with the BIR of the business as manufacturer or importer of including registration of online sellers or distributors (RR No. 14-2022): Vaporized Nicotine and Non-Nicotine Products and Novel Tobacco Productsj

(2) Registration with the BIR of brand and variants of Vaporized Nicotine and Non-Nicotine Products and Novet Tobacco Products (RR No. 14-2022);

(3) E-marketplaces, e-commerce platforms, selling facilities embedded in'sociall DTI and BIR duly registered distributors, merchants or retailers of Vaporized Nicotine and Non-Nicotine Products, their devices, and Novel media websites/applications, and/or other similar platforms shall only allow Tobacco Products to sell in their website or platform (IRR);

(4) For duly-registered distributors, merchants and retailers of Vaporized Nicotine and Non-Nicotine Products, their devices, and Novel Tobacco Products selling on their own websites and/or selling platforms, the :'required landing page of their websites and/or selling platforms (IRR); and, government certificates and approval shall be posted conspicuously at the

(5) Duly-registered distributors, merchants or retailers of Vaporized Nicotine and Non-Nicotine Products, their devices, and Novel Tobacco Products shall conspicuously post in their brick-and-mortar stores the'required government certificates and approvals of the products (IRR):

in RA No. 11900, its IRR and RR No. 14-2022 shall warrant the imposition of corresponding penalties prescribed therein. Non-compliance with the aforesaid requirements and the rest of the'reguirements

give this Circular the widest dissemination and publicity as possible. All internal revenue officers, employees and others concerned as enjoined to

This Circular shall take effect immediately.

ROMEO D 1 MR Comr Ha ssioner of Internal Revenue 005003

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RECORDS MGT. DIVISION AUUI