Definition of Terms
- Fine Jewelry: Articles made of precious metals, stones, and pearls for personal adornment.
- Gemstones: Includes diamonds, rubies, emeralds, sapphires, among others.
- Imitation Jewelry: Jewelry made from base metals or imitations of precious metals and stones.
- Imitations of Precious Metals: Non-precious metals electroplated to simulate precious metals.
- In-house Training: Technical/vocational training carried out within the enterprise.
- Precious Metals: Includes gold, silver, platinum, and related alloys and compounds.
- Qualified Jewelry Enterprise: Enterprise involved in jewelry manufacturing, registered and accredited by the Board of Investment (BOI), categorized by asset size.
- Training Schemes: Organized activities for skill development approved by training institutions.
Excise Tax Exemption for Qualified Jewelry Enterprises
- QJEs are exempt from excise tax on manufacture and removal of jewelry and importation of raw materials and supplies for jewelry production.
- Exemption requires submission of a valid BOI Certificate of Accreditation to the Bureau of Internal Revenue (BIR).
- Jewelry manufacturing plants must be registered with the relevant Revenue District Office (RDO) before operations.
- Importation requires filing for Permit to Import and Authority to Release Imported Goods (ATRIG) with supporting documents and compliance verification.
- Semi-annual sworn reports must be filed by QJEs disclosing manufactured/imported products and gross selling prices.
Additional Deduction for Training Expenses
- QJEs may avail of a 50% additional deduction on expenses incurred for training schemes, in addition to ordinary deductible training expenses.
- Certification of training programs and actual conduct must be approved by the Technical Education and Skills Development Authority (TESDA).
- Training expense deductions apply in the taxable year incurred.
- Supporting documents include BOI accreditation, TESDA certification, and official receipts.
Record-Keeping Requirements
- QJEs must maintain books of accounts and records as per the National Internal Revenue Code for verification purposes.
Penal Provisions
- Fraudulent claims, submission of false information, or keeping false records by QJEs will be penalized under applicable laws including the National Internal Revenue Code.
Repealing Clause
- Any conflicting administrative orders, rules, or regulations are repealed or amended accordingly.
Effectivity
- Regulations take effect 15 days after publication.
- Rights to incentives start from the date of BOI accreditation, not earlier than July 9, 1998.