QuestionsQuestions (REVENUE REGULATIONS NO. 20-2018)
It prescribes the implementing rules and guidelines for the imposition of excise tax on sweetened beverages under Section 47 of the TRAIN Law (codified as Section 150-B of the NIRC), including related definitions, tax rates, liabilities, filing/payment, exclusions, and compliance rules.
They are non-alcoholic beverages of any form (liquid, powder, concentrates), pre-packaged and sealed per FDA standards, containing caloric and/or non-caloric sweeteners added by manufacturers, and classified using the Codex Alimentarius Food Category System as adopted by the FDA.
Caloric sweeteners are substances that produce sweetness and include sucrose, fructose, and glucose. Non-caloric sweeteners are artificially or chemically processed sweeteners (e.g., aspartame, sucralose, saccharin, etc.) that provide sweetness without nutritive/caloric value and are approved under Codex and adopted by the FDA.
The excise tax is a specific tax per liter of volume capacity. Rates vary depending on the type of sweetener used: P6.00 for purely caloric or purely non-caloric or mix of caloric and non-caloric; P12.00 for purely HFCS or HFCS mixed with any caloric or non-caloric sweetener; and exempt for purely coconut sap sugar and purely steviol glycosides (subject to compliance with specified standards).
It is exempt only when the beverage uses purely coconut sap sugar, provided it complies with the Philippine National Standard (PNS)/BAFPS 76:2010 ICS 67.180 or the latest updated standards.
They must comply with the JECFA specifications (Joint FAO/WHO Expert Committee on Food Additives), as referenced in the regulation.
Manufacturers of sweetened beverages and persons who have possession of domestically manufactured sweetened beverages removed from the place of production without payment of the excise tax.
Owners or importers of sweetened beverages and persons who have possession of imported sweetened beverages removed from customs custody without payment of the excise tax.
If tax-free sweetened beverages are later sold/transferred/exchanged to non-exempt persons (including certain freeport-related reintroductions), the purchaser/transferee or the party introducing the goods shall be treated as the importer and become liable for the excise tax due on that importation.
A separate return (BIR Form 2200-S) is filed for each place of production with the concerned RDO where the head office is registered. The excise tax must be paid before removal of the domestically manufactured sweetened beverages from the place of production, and the return/payment is made through an AAB, revenue collection officer, or authorized city/municipal treasurer.
Importers must apply for an Authority to Release Imported Goods (ATRIG) with the ELTRD (BIR National Office) and pay excise tax based on the equivalent yield in liters of volume capacity. Excise tax on imported finished goods is paid before release from customs custody; excise tax on imported raw materials used for production is paid before removal of finished goods from the place of production.
Examples include: (1) milk products (as defined in the regulation), (2) soymilk and flavored soymilk, (3) 100% natural fruit juices without added sugar/caloric sweeteners, (4) 100% natural vegetable juices without added sugar/caloric sweeteners, (5) meal replacement and medically indicated beverages, (6) ground coffee/instant soluble coffee/pre-packaged powdered coffee products.
If sugar or sweetener is added at any amount, the product is no longer excluded and shall be considered excisable depending on the type of sweetener added and the corresponding excise tax rate.
Manufacturers cannot transfer or remove raw materials from the place of production except for further processing to other registered production or toll-manufacturing plants, and such transfer/removal must be covered by an Excise Taxpayer’s Removal Declaration (ETRD). Raw materials clearly only for repacking are subjected to excise tax.
They are treated as finished goods subject to excise tax, even in semi-processed state. Tax is computed using a predetermined formula to arrive at equivalent yield in liters submitted by the manufacturer and approved by the FDA.
A shipment permit from BIR, a surety bond guaranteeing payment, direct transport and shipment without returning to the Philippines, submission of proof of exportation within 30 days (with possible one-time 30-day extension for meritorious reasons), and the phrase “EXPORTED FROM THE PHILIPPINES” printed on each label. Failure to comply makes the removal subject to excise tax with penalties and blocks subsequent tax-free export permits until requirements are satisfied.
Prior application for brand registration with ELTRD, submission of a manufacturer/importer sworn statement showing (among others) monthly volume, % sweeteners used, brand names, bottle content, sweetener type, specific tax rate, and equivalent servings for concentrated/powdered forms; submission of exact label replicas/artworks; and compliance with label printing requirements including assessment number and tax/exemption marking depending on domestic import or export.
Excise Tax Return: BIR Form No. 2200-S. Excise Taxpayer’s Removal Declaration (ETRD): BIR Form No. 2299 (used for removals of sweetened beverages by registered manufacturers), with issuance/cancellation and reportorial requirements per BIR rules.
It adopts corresponding penalties under Title X of the NIRC, and adds: (1) summary cancellation/withdrawal of permit for knowing misdeclarations in the sworn statement; (2) corporate penalties of fines treble the aggregate deficiency taxes, surcharges, and interest; (3) criminal liability for persons liable for acts/omissions under Section 150-B; (4) criminal liability for those who willfully aid/abet; and (5) deportation after sentence if the offender is not a Philippine citizen.