Scope of the Regulation
- Applies to the advance payment of business and income taxes and actual excise tax payments.
- Specifically covers sales of jewelry, gold, and metallic minerals to nonresident aliens not engaged in Philippine trade/business or nonresident foreign corporations.
- Supported by multiple provisions of the National Internal Revenue Code of 1997.
Applicable Taxes on Gold and Metallic Minerals
- Excise Tax: 2% based on actual market value for local goods or customs value for imports.
- Sellers/possessors must prove excise tax payment; otherwise, presumed liability and assessment on discovery date.
- Possession includes physical and inventory inclusion.
- Proof includes Bureau of Customs documents or excise tax return and deposit slips.
- Value Added Tax (VAT) or Percentage Tax applies: 12% VAT if sales exceed Php1,919,500 threshold; otherwise, 3% percentage tax applies.
- Income Tax per Tax Code sections for individuals or corporations, required to be prepaid as a creditable amount.
Applicable Taxes on Jewelry
- VAT or Percentage Tax: 12% VAT on sales above Php1,919,500 threshold; 3% percentage tax if below threshold.
- Income Tax as prescribed for individuals/corporations, required to be prepaid as a creditable advance.
Imposition of Advance Tax Payments
- Sellers of jewelry, gold, and metallic minerals must pay advance business tax (VAT or percentage tax), income tax (5% on gross payments), and excise tax (2% where applicable).
- Payment is made to the Revenue Collection Officers (RCOs) at the Revenue District Office (RDO) where transactions occur.
- Payments are required regardless of whether the sellers are registered with the BIR.
- Excise tax bases: market value at removal (local) or customs value (imported).
- RCOs authorized to accept payments and issue official receipts.
Credit for Advance Tax Payments
- Advance payments credited against actual tax liabilities for the corresponding taxable periods.
- For non-VAT taxpayers (below threshold), credit applies against 3% percentage tax monthly.
- For VAT-registered sellers, advance VAT payments credited alongside usual input tax credits.
- Advance income tax credits applied against quarterly and annual income tax returns.
Proof of Advance Payment
- Payment evidenced by validated BIR Form No. 0605 and Revenue Official Receipt (ROR) issued by RCOs.
- Lack of proof results in disallowance of credit claims and corresponding tax assessments.
Implementing Guidelines
- Nonresident alien individuals/foreign corporations must keep detailed transaction records including dates, seller name and TIN, amounts, and signed evidence.
- Hotels/establishments hosting such buyers must report buyer information and transaction details to the appropriate RDO immediately.
- Penalties apply for failure to inform BIR.
- The RDO uses gathered information to task Special Investigation Division (SID) and RCOs to monitor and collect taxes on-site.
- RCOs issue validated forms and receipts, and report per taxpayer and tax type.
- SID verifies non-engagement in trade/business, records profiles and compliance reports, and keeps an Official Registry Book.
- Reports reconciled by the Regional Director and submitted to the Commissioner of Internal Revenue within set deadlines.
- SID and RCOs profile unregistered sellers for BIR registration and compliance enforcement.
Repealing Clause
- All inconsistent rules, regulations, and issuances are modified, repealed, or revoked accordingly.
Effectivity Clause
- Regulations take effect immediately upon issuance.