Implementing Executive Order No. 114, Series of 2026 “Temporarily Suspending the Excise Taxes on Specific Petroleum Products Pursuant to Section 148 of the Republic Act No. 8424 or the National Internal Revenue Code of 1997, As amended”
SECTION 1. BACKGROUND. – Section 148 of the National Internal Revenue Code of 1997, as amended (NIRC), provides that the President may, upon recommendation of the Development Budget Coordination Committee (DBCC), in coordination with the Secretary of Energy, susm=pended the imposition of, or reduce the excise taxes on fuel when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) reaches or exceeds Eighty US Dollars (USD 80.00) per barrel for one (1) month immediately preceding the issuance of the suspension or reduction order.
On April 16, 2026, President Ferdinand R. Marcos, Jr. issued Executive Order (EO) No. 114, Series of 2026 entitled “Temporarily Suspending the Excise Taxes on Specific Petroleum Products Pursuant To Section 148 of the Republic Act No. 8424 or the National Internal Revenue Code of 1997, As Ameded”.
Pursuant to the provisions of Section 244 in relation to Section 245 of the NIRC, and Section 6 of EO No. 14, series of 2026, this Revenue Regulations is hereby promulgated to implement the provisions of the EO temporarily suspending the imposition of excise taxes on Liquefied Petroleum Products (LPG), except when used as raw material for the production of petrochemical products or used for motive power, and Kerosene, except when used as aviation fuel, in accordance with Section 148 of the NIRC.
SEC. 2. SUSPENSION OF EXCISE TAXES. – Beginning April 17, 2026, the imposition of excise taxes on the following covered petroleum products is hereby suspended:
The suspension of excise taxes shall apply only to these petroleum products removed form the place of production or customs custody after the effectivity of the EO.
SEC. 3 DURATION OF THE TEMPORARY SUSPENSION AND AUTOMATIC REVERSION OF RATES. – The temporary suspension of excise taxes on the covered petroleum products shall be for a period of three (3) months from the effectivity of the EO. The suspension shall be subject to monthly review by the DBCC, which shall recommend to the President the continuation, modification, extension, or termination thereof.
The excise tax rates on the covered petroleum products shall automatically revert to the rates prescribed under Section 148 of the NIRC, without the need for further issuances, upon the occurrence of any of the following:
SEC. 4. MONITORING AND INVENTORY REQUIREMENT – During the duration of the suspension, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) shall submit to Congress a monthly report on the declared value and volume of the covered petroleum products based on:
Such monthly report shall be submitted every fifteenth day of the following month.
The Department of Finance (DOF), through the BIR and the BOC, shall conduct an inventory of existing stocks of LPG and kerosene as of the effectivity of the EO.
Revenue Officer On Premises (ROOPs) shall continue performing their duties of monitoring the activities of taxpayers in their establishments pursuant to Sections 5 and 6 of the NIRC, without prejudice to further legal action as the circumstances may warrant.
SEC 5. REPORTORIAL REQUIREMENTS. – For the effective implementation of the EO, the following guidelines shall be followed:
SEC. 6. PENALTIES. – Violations of the provisions of these Regulations, including non-compliance with the reportorial requirements, shall be subject to the corresponding penalties provided for under Title X of the NIRC, and applicable regulations.
SEC. 7. REPEALING CLAUSE. – All rules and regulations inconsistent with the provisions of these Regulations are hereby repealed or amended accordingly.
SEC. 8. EFFECTIVITY. – These Regulations shall take effect immediately following its complete publication in the Official Gazette or in the BIR Official Website, whichever comes first.
Amending Sections 3,4, and 7 of Revenue Regulations (RR) No. 9-2025 to Clarify Filing and Payment Rules for VAT on Local Sales, Provide Optional Value-Added Tax (VAT) Registration for Certain Registered Business Enterprises (RBEs), Extend the Deadline for System Reconfiguration, and Exclude Certain Enterprises and Activities from the Coverage of VAT on Local Sales of RBEs Under Section 295(D) of the National Internal Revenue Code of 1997 (Tax Code), as Amended by Section 18 of Republic Act (RA) No. 12066
Pursuant to the provisions of Sections 244 and 245 of the Tax Code as amended, in relation to Section 32 of RA No. 12066, these Regulations hereby promulgated to amend Sections 3, 4 and 7 of RR No. 9-2025 to clarify the manner of filing and payment of VAT on local sales, provide optional VAT registration for certain RBEs, exclude certain enterprises and business activities from the coverage of VAT on local sales of RBEs under Section 295(D) of the Tax Code, as amended by Section 18 of RA No. 12066, and extend the deadline for compliance with invoicing system reconfiguration.
SECTION 1. Section 3(A)(3)(a) of RR No. 9-2025 is hereby amended to read as follows:
“a. For Purchase of goods from economic zones or freeport. – The filing and payment of the “VAT on B2B local sales by RBEs” shall be on a per transaction basis using the BIR Form to be prescribed by the BIR for this purpose through a separate revenue issuance. In the meantime, BIR Form No. 0605 shall be utilized and shall immediately transmitted to the RBE, as part of the attachments prior to the release of goods from the economic zone or freeport.
However, in cases where the shipment of goods and purchased in the ecozone or freeport is in bulk(e.g., delivered through a single container truck) and is covered by several invoices, the buyer may opt to pay the VAT due thereon in a single payment. The BIR Form No. 0605 covering the payment of all the invoices together with the list of all the invoices covered shall be presented to the BOC prior to its release.”
SECTION 2. Section 4 of RR No. 9-2025 is hereby amended to read as follows:
“SECTION 4. OPTIONAL VAT REGISTRATION AND EXCLUSIONS FROM THE COVERAGE OF VAT ON LOCAL SALES UNDER SECTION 295(D) OF THE TAX CODE, AS AMENDED.-
A. OPTIONAL VAT REGISTRATION. – An RBE availing of the 5% Special Corporate Income Tax (SCIT) or Gross Income Earned (GIE) regime, and whose registered activities are all under the same income tax incetive, may opt to register as a VAT taxpayer solely for purposes of its local sales. Such VAT registration shall not affect the RBE’s entitlement to its existing fiscal and non-fiscal incentives, uncluding VAT zero-rating on local purchases and VAT exemption on importation, provided these are directly attributable to it registered activities.
In accordance with Section 236(G) of the Tax Code, as amended, an RBE that elects VAT registration under this provision shall not be allowed to cancel such registration under Section 236(E)(2) of the same Code for a period of three (3) years from the date of registration.
B. EXCLUSIONS FROM THE COVERAGE OF VAT ON LOCAL SALES UNDER SECTION 295(D) OF THE TAX CODE, AS AMENDED. – VAT- registered Domestic Market Enterprises (DMEs) that do not qualify for VAT zero-rating on local purchases or VAT exemption on importation despite being registered with any of the Investment Promotion Agencies are subject to VAT on both their local purchases and importation.
The application of Section 295(D) of the Tax Code to their local sales mandating the buyer to pay and remit the corresponding VAT to the BIR would result in accumulated unutilized input VAT from local purchases and importations, which are not eligible for refund under Section 112(A) of the Tax Code.
To address such scenario, their local sales shall not be subject to the buyer’s payment and remittance of VAT (B2B transactions) under Section 295(D) of the Tax Code, as amended. The RBE-seller shall file and pay the corresponding VAT to the BIR as a regular VAT taxpayer.
In addition, the following sale transaction/entities are excluded from the coverage of Section 295(D) of the Tax Code, as amended:
SECTION 3. The effectivity of the provision under Section 7 of RR No. 9-2025, which requires RBEs using registered Cash Registered Machines/Point-of-Sales (CRM/POS). Computerized Accounting System (CAS), Computerized Books of Accounts with Accounting Records, or other registered invoicing systems/software to reconfigure or rename their systems by replacing the term ‘VAT/VAT Amount’ in the breakdown of sales with ‘VAT on Local Sales’, or adding the same where ‘VAT/VAT Amount’ is not applicable, is hereby extended until December 31, 2026. The Commissioner may further extend the deadline as may be necessary.
SECTION 4. SEPARABILITY CLAUSE. – If any of the provisions of these Regulations is subsequently declared invalid or unconstitutional, the validity of the remaining provisions hereof shall remain in full force and effect.
SECTION 5. REPEALING CLAUSE – All other issuances and rules and regulations or parts thereof which are contrary to and inconsistent with the provisions of these Regulations are hereby repealed, amended or modified accordingly.
SECTION 6. EFFECTIVITY. – These Regulations shall take effect fifteen (15) days following its publication in the Official Gazette or the BIR Official Website, whichever comes first.
Further amending the “De Minimis” Benefits Provisions of Revenue Regulations (RR) No. 2-98 as Amended, Increasing the Ceiling of Non-Taxable Benefits
Pursuant to Sections 4 and 244 in relation to Section 33 of the Tax Code of 1997, these regulations are hereby promulgated to further amend RR No. 2-98, as amended by RR No. 004-2025, with respect to “De Minimis” benefits which are exempt from income tax on compensation as well as from fringe benefit tax.
Section 1. Section 2.78.1 of RR No. 2-98, as amended by RR No. 004-2025, is hereby further amend to read as follows:
“Section 2.78.1. Withholding of Income Tax on Compensation Income
(A) Compensation Income Defined.
(3) Facilities and privileges of relatively small value
Section 2. REPEALING CLAUSE – All existing rules and regulations and other issuances or parts thereof which are inconsistent with the provisions of these Regulations are hereby amended, modifies or repealed accordingly.
Section 3. EFFECTIVITY – These Regulations shall take effect after fifteen (15) days following its publication in the Official Gazette or in the BIR Official Website, whichever comes first.
Implementing the Enhanced Version of the Electronic Documentary Stamp Tax System
SECTION 1. SCOPE – Pursuant to the provisions of Sections 244 and 245 of the National Internal Revenue Code (NIRC) of 1997 as amended, these Regulations are hereby promulgated to implement the enhanced version of Electronic Documentary Stamp Tax (eDST) System of the Bureau of Internal Revenue (BIR).
SECTION 2. COVERAGE – All taxpayers whether individual or non-individual, falling under the following industries are mandated to use the enhanced version of the eDST system for the affixture of the prescribe documentary stamp on their taxable documents:
SECTION 3. REQUIREMENT OF ONLINE ENROLLMENT ON THE USE OF eDST SYSTEM. – All taxpayers mandated to use the enhanced version of the eDST System shall enroll online through the website of the BIR. Considering that the said system has two (2) modules, the Deposit Module and Non-Deposit Module, the taxpayer can no longer enroll and use one module in the event that the said taxpayer has selected and enroll in the other module.
For this purpose, the Deposit Module shall refer to the module of the enhanced eDST system which requires an advance deposit to be credited to the system’s taxpayer’s ledger account and shall be deducted with the tax due for every printing of the documentary stamp on the taxable document. On the other hand, the Non-Deposit Module shall refer to the module of the enhanced eDST system which has the facility to immediately print documentary stamp on taxable documents prescribed under Section 188 of the NIRC of 1997, as amended, with the total tax dues of all the printed documents for the month to be remitted pursuant to the prescribed deadline.
SECTION 4. LIMITATIONS ON THE USE OF LOOSE DOCUMENTARY STAMPS AND CONSTRUCTIVE AFFIXTURE. – By way of exception to the mandatory use of eDST System, the use of loose documentary stamp and constructive affixture of documentary stamp to taxable documents shall be allowed, subject to the determination and requirements by the CIR through a separate revenue issuance.
Provided, That, loose documentary stamps shall only be affixed to taxable documents prescribed under Section 188 of the NIRC of 1997, as amended, whose tax due is Thirty Pesos (P30.00), except those covered by the eDST System or the constructive affixture of documentary stamp as the case may be. The affixture of multiple loose documetary stamps on taxable documents whose tax is more than P30.00 is therefore prohibited.
Provided further, That, the purchase of two or more pieces of loose documentary stamps for future affixture to taxable documents is prohibited, except on instances as may be determined by the CIR thru a separate revenue issuance.
SECTION 5. TREATMENT ON THE EXCESS DEPOSIT IN CASE OF CLOSURE OF BUSINESS.- The Revenue District Offices (RDOs) of the BIR, in the course of their examination of books of accounts of taxpayers applying for closure of business who are mandated to use the enhanced version of the eDST System, shall validate whether or not the taxpayers have an existing excess deposit balance in their eDST System’s ledger accounts. The validated excess deposit balance shall be applied against the taxpayer’s outstanding DST liability resulting from the said examination. Should there still be an excess of deposit balance after deduction from the outstanding DST liability, the excess shall be applied against the other outstanding tax liabilities of the taxpayer. Finally, any remaining validated deposit balance after deducting all the outstanding tax liabilities resulting from the said examination shall be refunded to the taxpayer. Accordingly, the excess balances of these taxpayers in their respective eDST System’s ledger accounts shall be adjusted/reversed.
SECTION 6 MANNER OF IMPLEMENTATION OF eDST SYSTEM. – The enhanced version of the eDST System may be implemented in phases as may be determined by the CIR thru separate issuance, including the procedural requirements for the effective implementation of the said System.
SECTION 7 PROHIBITION OF USE OF PREVIOUSLY AFFIXED LOOSE DOCUMENTARY STAMP – The use of a previously affixed loose documentary stamp for affixture to another document is strictly prohibited. For this purpose, any person, whether natural or juridical, executing the taxable document shall ensure that the loose documentary stamp affixed thereon is properly cancelled according to the applicable procedures prescribed in Item No. 3.c. of the “Guidelines on the Proper Sale and Affixture of Loose Documentary Stamps” under Revenue Memorandum Circular No. 092-2024 issued by this Bureau, before releasing the taxable documents.
SECTION 9 SEPARABILITY CLAUSE – If any of the provisions of these Regulations is subsequently declared invalid or unconstitutional, the validity of the remaining provisions hereof shall remain in full force and effect.
SECTION 10 REPEALING CLAUSE – All other issuances, rules and regulations or parts thereof which are contrary to or inconsistent with any of the provisions of these Regulations are hereby repealed, amended or modified accordingly.
SECTION 11 EFFECTIVITY – These Regulations shall take effect after fifteen (15) days following its publication in the Official Gazette of BIR official website, whichever comes first.
SECTION 1. Scope – Pursuant to the provisions of Sections 244 and 245 of the National Internal Revenue Code of 1997, as amended (Tax Code), in relation to Sections 12 and 13 of Republic Act (RA) No. 12066, these Regulations are hereby promulgated to amend the transitory provisions of Revenue Regulations (RR) No. 11-2025 and extend the period by covered taxpayers to comply with the issuance of electronic invoice, in consideration of the operational adjustments required of taxpayers, including system reconfiguration and transition to electronic invoicing.
SECTION 2. Amendments of Extension of Compliance Period. –
Section 14 – Transitory Provisions of RR No. 11-2025 is hereby amended to read as follows:
“SECTION 6. Transitory Provisions – The following taxpayers shall have until December 31, 2026 to comply with the electronic invoicing requirements (issuance of electronic invoices) prescribed in these Regulations:
SECTION 3. Subsequent Amendments on the Extension of Period to Comply. – The Commissioner of Internal Revenue may further extend the deadlines or compliance period on the transition period prescribed in these Regulations as may be deemed necessary.
SECTION 4. Separability Clause. – If any of the provisions of these Regulations is subsequently declared invalid or unconstitutional, the validity of the remaining provisions hereof shall remain in full force and effect.
SECTION 5. Repealing Clause. – All other issuances and rules and regulations or parts thereof which are contrary to and inconsistent with any provisions of these Regulations are hereby repealed, amended, or modified accordingly.
SECTION 6. Effectivity. -These Regulations shall take effect immediately upon publication in the BIR Official Website.
SECTION 1 BACKGROUND
Section 160 of the National Internal Revenue Code (NIRC) of 1997, as amended, requires that importers and manufacturers of articles subject to excise tax shall post a bond for years succeeding the initial period of operation, based on the actual excise tax paid during the year immediately preceding the year of operation. The purpose of the bond is to secure the payment of taxes on excisable articles and to satisfy other obligations which may be incurred by the taxpayer.
Representatives from the petroleum industry and other stakeholders, however, submit that the requirement of posting importers’ or manufacturers’ bonds is no longer relevant or necessary given that oil companies are required to pay excise taxes due on petroleum products prior to their release from customs custody or withdrawal from a refinery, and that the bond requirement is inconsistent with the government’s policy of promoting ease of doing business and is an additional cost for these companies.
Section 5 of Republic Act (RA) No. 9485, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, as amended by RA No. 11032, provides as follows:
“SEC. 5. Reengineering of Systems and Procedures – All offices and agencies which provide government services are hereby mandated to regularly undergo evaluation and improvement of their transaction systems and procedures and reeingineer the same if deemed necessary to reduce bureaucratic red tape and processing time.
The Anti-Red Tape Authority, created in this Act, shall coordinate with all government offices covered under Section 3 of this Act in the review of existing laws, executive issuances and local ordinances, and recommend the repeal of the same if deemed outdated, redundant and adds undue regulatory burden to the transacting public.
All proposed regulations of government agencies under Section 3 of this Act shall undergo regulatory impact assessment to establish if the proposed regulation does not add undue regulatory burden and cost to these agencies and the applicants or requesting parties: Provided, That when necessary, any proposed regulation may undergo pilot implementation to assess regulatory impact.”
Thus, in conformity with the provisions of Section 5 of RA No. 9485, as amended, the BIR shall submit the said provisions of Section 160 of the NIRC, as amended, to the Anti-Red Tape Authority (ARTA), for their review of the said provisions and their recommendation on the repeal of the same, if warranted.
Furthermore, pursuant to the provisions of Section 5 of RA No. 9485, as amended, mandating all government offices and agencies that provide government services to undergo evaluation and improvement of their transaction systems and procedures and reengineering the same if deemed necessary to reduce bureaucratic red tape and processing time, the Bureau is suspending the implementation of the subject bond requirement pending ARTA’s review and recommendation, and as “pilot implementation to assess regulatory impact” of the said proposed amendment to, or repeal of, the said provisions of the NIRC, as amended.
SECTION 2. SCOPE
Pursuant to the provisions of Section 244 of the NIRC of 1997, as amended, and Section 5 of RA No. 11032, in relation to Section 160 of the NIRC, as amended, these Regulations are hereby promulgated to temporarily suspended the implementation of the requirement of posting a bond to secure payment of excise tax and satisfy other obligation in relation to importation or production of petroleum products.
SECTION 3. TEMPORARY SUSPENSION OF BOND REQUIREMENT
The posting of a bond under Section 160 of the NIRC for the importation of petroleum products or production of the same in local refineries shall be temporarily suspended, subject to the following conditions:
SECTION 4. SUSPENSION PERIOD
The suspension of the implementation of the bond requirement shall be in effect until such time that the ARTA has decided if there is a necessity to propose amendments to Section 160 of the NIRC, as amended, or as necessity arises due to change in behavior of the industry players.
SECTION 5. COMPLIANCE MONITORING
The BIR, in coordination with the BOC, shall institute appropriate control and monitoring mechanisms to ensure that taxes due are timely paid, and to prevent abuse of the temporary suspension. Non-compliance with the foregoing conditions shall be subject to appropriate penalties under existing laws and regulations.
SECTION 6. REPEALING/AMENDATORY CLAUSE
All existing rules and regulaations or portions thereof inconsistent with these Regulations are hereby repealed , and amended, or modified accordingly.
SECTION 7. EFFECTIVITY
These Regulations shall take effect fifteen (15) days after publication in the Official Gazette or the BIR’s official website, whichever comes first.
SECTION 1. SCOPE – Pursuant to the provisions of Sections 244 and 245 of the National Internal Revenue Code (NIRC) of 1997, as amended these Regulations are hereby promulgated to further amend Section 2.57.2(I) of Revenue Regulations No. 2-98, as amended by RR No. 11-2018, on the imposition of creditable withholding tax for top withholding agents.
SECTION 2. AMENDATORY PROVISIONS – The pertinent provisions of Section 2 of RR No. 2-98, as amended, are hereby further amended to read as follows:
“SECTION 2.57.2. Income Payments Subject to Creditable Withholding Tax and Rates Prescribed Thereon. Except as herein otherwise provided, xxx.
(I) Income payment made by top withholding agents, either private corporations or individuals, to their local/resident supplier of goods and local/resident supplier of services other than those covered by other rates of withholding tax. [formerly under letters (M) and (W)] – Income payments made by any of the top withholding agents, including non-resident aliens engaged in trade or business in the Philippines, shall be subjected to the following withholding tax rates:
Supplier of goods – One percent (1%)Supplier of services – Two percent (2%)
Provided, however, that, for gross payments to the manufacturers and direct importers, whether by individuals or corporations, of the following goods intended for wholesale, the tax of one-half percent (1/2%) shall imposed instead:
a) motor vehicles in Completely Built Units (CBUs) or Semi-Knockdown (SKD) units, motor vehicle parts and accessories;b) medicine/pharmaceutical products; andc) solid or liquid fuels and related products.
xxx xxx xxx”
SEC.3. REPEALING CLAUSE – All other issuances and rules and regulations or parts thereof which are contrary to and inconsistent with any provisions of these Regulations are hereby repealed, amended, or modified accordingly.
SEC.4. EFFECTIVITY – These Regulations shall take effect fifteen (15) days following its publication in the Official Gazette or the BIR official website, whichever comes first.
SECTION 1. SCOPE. – These regulations are hereby promulgated to implement the tax subsidies granted by the FIRB to the AFPCES with respect to their purchases from local manufacturers, procedures, or suppliers of articles or commodities subject to value-added tax (VAT) and/or excise tax and the sale thereof to persons entitled to commissary previleges, updating for this purpose Revenue Regulations Nos. 13 – 2002 and 31-2003.
SECTION 2. COVERAGE- The priviledges granted herein shall be limited to the products/goods, amount of tax subsidy, scope and period of tax subsidy as provided in the FIRB Resolution and Certificate of Entitlement to Subsidy (CES) issued by the FIRB.
SECTION 3. GENERAL GUIDELINES. – Applications for ta expenditure subsidies shall be filed with the FIRB following the prescribed requirements and procedures under the Department of Budget and Management Joint Circular (DOF-DBM JC) No. 001-2024 or the “Rules, Guidelines, and Procedures Implementing the Tax Expenditure Subsidy Section Under the General Provisions of the General Appropriations Act.”
No purchase order (PO) for articles of commodities originating from the AFPCES, for which payment of the corresponding tax shall be made through the application of its government-granted subsidy, shall be honored or filed by any manufacturer, producer, or supplier unless the same is approved by the authorized official of the AFPCES indicated therein. The name of the approving officials, together with their original specimen signatures, shall be furnished to the Commissioner of Internal Revenue (CIR) or his duly authorized officers.
SECTION 4. PROCEDURAL GUIDELINES FOR ITEMS SUBJECT TO VAT AND EXCISE TAX FOR PETROLEUM PRODUCTS. – AFPCES shall apply for tax expenditure subsidy with the FIRB together with the documents enumerated in Section 5.2.1 of the DOF-DBM JC No. 001-2024, as may be applicable.
4.1 Application for Certificate of Tax Subsidy Availment (CTSA). – Upon receipt of the FIRB Resolution approving the tax subsidy application, AFPCES shall submit the same to the concerned Bureau of Internal Revenue (BIR) Revenue District Office (RDO) having jurisdiction over the principal place of business or head office of AFPCES. The application for the issuance of the CTSA shall be signed by the duly authorized official of the AFPCES.
4.1.a For articles subject to VAT, AFPCES shall attach to the FIRB Resolution a copy of the PO and two (2) copies of the suppliers’ invoice covering the transaction. The aforesaid transaction shall be billed VAT inclusive.
4.1.b For articles subject to VAT, AFPCES shall prepare the POs indicating therein the tax base, amount of excise tax base, amount of excise tax due, and total amount. The PO shall be coursed through the concerned RDO for proper evaluation of the accuracy of the amount of excise tax indicated therein. The PO shall then be used to support the preparation and issuance of a CTSA equivalent to the excise tax amount computed by the concerned RDO. In addition to the PO, the original copies or certified true copies of the Supply Agreement between the dealer and local refiner shall also be submitted along with the FIRB Resolution. It should be stated in the agreement that the supply is being purchased exclusively for AFPCES. To ensure that the excise tax thereon has been paid, the documents pertaining to said transactions shall be subject to proper verification by the RDO prior to the release of the CTSA.
All invoices issued to AFPCES covering the sale of motor fuel and lubricants shall indicate legibly, among others, the name of the purchaser, who is the user of the number, and kind/description and quantity of petroleum products to be sold.
Upon full and actual receipt of its purchased articles, AFPCES shall immediately submit to the concerned RDO the copy of the sales invoices and delivery receipts (DR), duly acknowledged by AFPCES’ authorized representative, corresponding to the POs covered by the CTSA issued in its favor. The following information shall be indicated in the DR:
The RDO shall not process any subsequent application for CTSA on excise tax unless a previously issued Tax Subsidy Availment Certificate (TSAC) in favor of AFPCES has been fully liquidated as herein required.
Purchases of petroleum products from dealers shall be covered by tax subsidy only if the same are purchased by dealers directly from local refiners. In the event that no local refinery exists as certified by the Department of Energy, only then shall purchases from dealers that source their petroleum products through importers be covered by the tax subsidy.
4.1.c Upon determination that the application is complete and in order, the CIR, through the RDO, shall issue the CTSA, which shall contain a summary of approved invoices/billings.
4.2. Application for CES. – Upon receipt of the CTSA, AFPCES shall submit the same to the FIRB for the issuance of CES. The CES shall be valid and effective until December 15 of the current calendar year, unless otherwise extended to December 31, of the current year, as warranted.
4.3 Submission of Quarterly Report of Taxes and Duties Availments (QRTDA). – Within ten (10) working days after the end of each quarter, AFPCES shall prepare the QRTDA to be distributed as follows:
Original and Triplicate – DBM Budget Operations Bureau
Duplicate – AFPCES
4.4. Request for Special Allotment Release Order (SARO) – Upon completion of the QRTDA, AFPCES shall submit to the DBM a request for the issuance of SARO, supported by the original and triplicate copy of the QRTDA, original copy of CES, and original copy of CTSA.
Upon approval of the application, the DBM shall issue a SARO in favor of the Bureau of Treasury (BTr) to cover the payment of the aforesaid taxes payable to the BIR. The AFPCES shall furnish the RDO having jurisdiction over the AFPCES’ principal office and the BTr with a copy of the SARO.
Upon receipt of the SARO, the RDO having jurisdiction over AFPCES’ principal office shall furnish the Revenue Accounting Division (RAD) under the Collection Service with a copy of the same. The RAD shall record the corresponding revenue collection upon receipt of BTr’s Journal Entry Voucher (JEV).
The SARO, which the DBM will issue, shall serve as the basis for recording both the obligation and liquidation of the tax expenditure. The amount of the SARO shall correspond to the amount indicated in the QRTDA. The DBM shall accomplish the appropriate portion of the QRTDA indicating the SARO number and date thereof.
4.5. Application for TSAC. Upon receipt of the SARO, AFPCES shall forward a copy of the same to the BIR together with a copy of the CES and other documents as may be required by the BIR. Upon receipt of complete documents, the RDO shall prepare within five (5) working days the TSAC for taxes payable in five (5) copies to be distributed as follows:
Original – AFPCESDuplicate – BIR (Collection Service – RAD)Triplicate – BIR (RDO / issuing office’s copy)Quadruplicate – SupplierQuintuplicate – BIR, for transmittal to DOF when completely utilized.
Before the release of the TSAC, each availment of the subsidy shall be properly recorded by the RDO to determine and update the balance of the released allotment. The RDO shall submit a monthly report of the TSAC issued, with the duplicate copy of the TSAC, to the RAD within fifteen (15) days after the end of each month.
For excise tax purposes, AFPCES shall submit to the RDO – Collection Section, all documents enumerated in Section 4.1.b in addition to the CES. Prior to the issuance of the TSAC, the issuing office shall update its books to indicate the available balance for future utilization after deducting the latest application on TSAC utilization for excise tax purposes. The name of the dealer and local refiner from whom the petroleum product was purchased shall be indicated in the TSAC to be issued as follows:(Name of Dealer) for the Account of (Name of Supplier/Local Refiner)
The amount appearing in the said TSAC shall be deducted from the total amount payable by the petroleum dealer to the supplier/local refiner and/or shall be used to pay the input VAT on purchases of goods made by AFPCES from its local manufacturers, producers, or suppliers. For excise tax purposes, the TSAC shall be used by the supplier/local refiner as payment for its excise tax liability with the BIR without the necessity of applying for transfer/utilization.
SECTION 5. REGISTRY BOOK – The manufacturers, producers, or suppliers referred to herein, as well as the AFPCES, shall have a registry book, duly registered with the BIR. All sales made to AFPCES from its local manufacturers, producers, or suppliers shall be entered in the said registry book not later than the day immediately following the date of the transaction. The books of the manufacturer, purchaser, or supplier and AFPCES shall be kept and maintained like any ordinary accounting record shall be opened for inspection at any time during office hours by any duly authorized internal revenue officer.
SECTION 6. ACCOUNTING REQUIREMENTS – Pertinent accounting entries for transactions relating to the above procedures shall be recorded in accordance with the Circular/Guidelines that may be issued by the Commission on Audit for this purpose.
SECTION 7. SANCTIONS – The head of the AFPCES who, by fault or negligence, fraudulently misrepresents any transaction as official, shall suffer the appropriate penalties provided by law, either administratively or criminally, or both. AFPCES shall be responsible for ensuring that all procedural guidelines prescribed in DOF-DBM JC No. 001-2024 and this Revenue Regulations, insofar as these affect their application, are strictly adhered to. In case of a transaction made in the name of another National Government Agency or government-owned and/or -controlled corporation (GOCC), the sanctions referred to herein shall apply to the head of the agency or GOCC primarily responsible for the transaction. Whenever applicable, the sanctions referred to herein shall likewise apply to any private entity involved in the transaction.
Provided, that in case of cancellation, suspension, or withdrawal of the CES, the FIRB shall endorse such order to the BIR – RDO for the assessment and collection of appropriate taxes, including surcharge, interest and any applicable thereon.
SECTION 8. CONFIDENTIALITY CLAUSE – Any information and data obtained from the documents submitted by AFPCES shall be processed in accordance with Republic Act No. 10173 and its implementing rules and regulations, Section 270 of the National Internal Revenue Code of 1997, as amended and other relevant laws and issuances.
SECTION 9. REPEALING CLAUSE – All other revenue issuances, rules and regulations or parts thereof that are contrary to the inconsistent with any provisions of these regulations are hereby repealed, amended or modified accordingly.
SECTION 10. EFFECTIVITY CLAUSE – These regulations shall take effect fifteen (15) days following its publication on the Official Gazette or the BIR official website whichever comes first.
SECTION 1. SCOPE – Pursuant to Sections 244 and 245 of the National Internal Revenue Code of 1997, as amended (Tax Code), in relation to Section 9 of Republic Act (RA) No. 12214 otherwise known as the Capital Markets Efficiency Promotion Act (CMEPA), these Regulations are hereby promulgated to further amend Section 7(B) of Revenue Regulations (RR) No. 17-2011 by revising guidelines on the allowed deduction which the employer may claim from his/its qualified contribution to employee’s Personal Equity and Retirement Account (PERA) under RA No. 9505, otherwise known as the PERA Act of 2008.
SECTION 2. COVERAGE. – These Regulations shall cover qualified employer’s actual contribution made to PERA on July 1, 2025 onwards.
SECTION 3. ADDITIONAL DEDUCTION FROM GROSS INCOME FOR PRIVATE EMPLOYERS THAT CONTRIBUTE TO PERA – Section 7(B)(II) of RR No. 17-2011, is hereby amended to read as follows:
“Section 7. PERA Contributions and Tax Credit. –
A. Contributor’s Qualified PERA Contribution
B. Qualified Employer’s Contribution to the Employee’s PERA
I. On the part of the employee
II. On the part of the employer – The employercan claim the actual amount of its Qualified Employer’s Contribution as a deduction from its gross income, but only to the extent of the employer’s contribution that would complete the maximum allowable PERA contribution of an employee.
Further, private employees who make voluntary contributions to their employees’ PERA shall be entitled to an additional deduction from their gross income equivalent to fifty percent (50%) of the amount contributed , subject to the following conditions:
(a) Private employers must contribute an amount at least equal to the contributions of their employees, subject to the maximum allowable contribution under RR No. 17-2011, as amended by RR No. 7-2023; and
(b) Only private employers that contribute to all their employees‘ PERA shall be eligible to the additional allowable deduction.
To determine that the condition stated in II (a) above is met, the employee must also have contributed to PERA within the same calendar year.
The Qualified Employer’s Contribution, to the extent that is allowable as deduction from gross income, shall likewise be exempt from withholding tax on compensation. For this purpose, the Administrator shall issue to the employer a certificate of the actual amount of Qualified Employer’s Contributions.
For purposes of recording the employer’s contribution corresponding to its share in the qualified employee’s PERA, allowable as deductible expense from gross income, the account shall be designated as ‘Share in qualified Employee’s PERA Contribution’;
Full disclosure of the details of the share of the employer to the employees’ PERA Contribution shall be part of the Notes to Financial Statements.”
ILLUSTRATION:
Given:
ABC company has five (5) employees enrolled with PERA. The maximum contribution for an Employee is P200,000.00 per year under RR No. 17-2011, as amended by RR No. 7-2023.
In the above illustration, ABC Company is entitled to the one hundred percent (100%) deduction from its gross income for the contributions made to the PERA of Employee Nos. 1, 2, and 3 under PERA Act of 2008. Furthermore, pursuant to Section 34(M) of the Tax Code, as amended by Section 9 of CMEPA, ABC Company is entitled to an additional deduction equivalent to fifty percent (50%) of its PERA contributions for Employee Nos. 1 and 2 only. While ABC Company is not eligible for the additional fifty percent (50%) deduction for its contributions for Employee No. 3. since the amount it contributed is less than the amount contributed is less than the amount contributed by the employee, it remains entitled to the one hundred percent (100%) deduction for said contributions to the employee’s PERA under PERA Act of 2008.
With respect to Employee No. 4, ABC Company qualifies for both the one hundred percent (100%) deduction and the additional fifty percent (50%) deduction, but these deductions are limited to the amount necessary to complete the employee’s maximum allowable PERA contribution of P200,000.00, as prescribed under existing revenue regulations. Accordingly, the computation of both deductions is based on the P20,000.00 contributed by the company, which completes the employee’s allowable contribution threshold.
Finally, with respect to Employee No. 5. ABC Company is entitled to the one hundred percent (100%) deduction for its PERA contribution under PERA Act of 2008. It may also qualify for the additional fifty percent (50%) deduction, provided that the employee makes a qualified contribution to PERA within the same calendar year, and the company’s contribution is at least equal or greater than the employee’s contribution.
SECTION 4. SEPARABILITY CLAUSE – If any of the provisions of these Regulations is subsequently declared invalid or unconstitutional, the validity of the remaining provisions hereof shall remain in full force and effect.
SECTION 1. – SCOPE – Pursuant to Sections 244 and 245 of the National Internal Revenue Code of 1997, as amended (Tax Code), in relation to Sections 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, and 25 of Republic Act (RA) No. 12214, or the “Capital Markets Efficiency Promotion Act” (CMEPA), these Regulations are hereby promulgated to implement the amendments to Sections 22, 24, 25, 27, 28, 32, 34, 38, 39, and 42 of the Tax Code.
SECTION 2. DEFINITION OF TERMS – For purposes of these Regulations, the following terms shall be taken to mean as follows:
a. Shares of stock – refer to shares of stock of a corporation, warrants, options, as well as units of participation in partnerships (except general professional partnership), joint stock companies, joint accounts, joint ventures taxable as corporations, associations, and recreation or amusement clubs (such as golf, polo or similar clubs), and mutual fund certificates.
b. Shareholder – refer to a holder of shares of stock, warrants, options, as well as holder of a unit of participation in a partnership (except general professional partnerships), joint stock company, joint account, taxable joint venture, and holder of a mutual fund certificate, joint-stock company, or insurance company, or member in an association, recreation, or amusement club, such as golf, polo, or similar clubs.
c. Securities – refer to shares, participation, or interest in a corporation, commercial enterprise, or profit-making venture evidenced by a certificate, contract, or instrument, whether written or electronic in character, which shall include:
d. Deposit substitute – refers to an alternative form of obtaining funds from the public other than deposits, through the issuance, endorsement, or acceptance of debt instruments for the borrower’s own account, for the purpose of relending or purchasing of receivables and other obligations.
Provided, that the term ‘public’ shall mean twenty (20) or more individual or corporate lenders at any given time. These instruments may include, but need not be limited to bankers’ acceptances, promissory notes, repurchase agreements, excluding reverse repurchase agreements entered into by and between the Bangko Sentral ng Pilipinas (BSP) and any authorized agent bank, certificates of assignment or participation and similar instruments with recourse.
Provided, however, That debt instruments issued for interbank call loans with maturity of not more than five (5) days to cover deficiency in reserves against deposit liabilities, including those between or among banks and quasi-banks, shall not be considered as deposit substitute debt instruments.
e. Passive income – refers to any income that is earned from resources that do not require a taxpayer’s active pursuit and performance of trade or business and is not subject to value-added tax imposed in the Tax Code.
f. Equity-based compensation – covers all types of employee equity schemes that come in different forms such as stock options, restricted share awards, which may or may not pertain to the shares of stock of the grantor itself, but which all have the common feature of being granted to existing employees of the grantor as a performance incentive for services rendered by the employees and are typically dependent on performance, outstanding business achievements and exemplary organizational, technical or business accomplishments.
g. Stock options – merely entitles the employee to purchase shares at a future date. Thus, unless the options are exercised, the employee do not become shareholders. The period between the grant of stock options and the date when they become exercisable represents the vesting period.
h. Restricted stock units – stock units may or may not be subject to a vesting period, as will be specified in the grant. Settlement of vested stock may be made in the form of (i) shares, (ii) cash or (iii) a combination of shares and cash.
i. Stock appreciation rights – the terms and conditions are similar to stock options. However, under the stock appreciation rights, the optionee may receive (i) shares, (ii) cash or (iii) a combination of shares and cash, as determined by the grantor.
j. Mutual Fund Company – an open-end and close-end company as defined under the Investment Company Act.
k. Unit Investment Trust Fund – an open-end pooled trust fund denominated in peso or any acceptable currency, which is established, operated, and administered by a trust entity and made available by participation.
SECTION 3. CERTAIN PASSIVE INCOME – The coverage of the uniform rates of tax on certain passive income pursuant to Sections 24, 25, 27 and 28 of the Tax Code, as further amended by the CMEPA, is as follows:
INDIVIDUAL(Effective July 1, 2025)
A. Citizens, Resident Alien, and Non-Resident Alien Engaged in Trade or Business
B. Non-Resident Alien Not Engaged in Trade or Business
CORPORATIONS(Effective July 1, 2025)
A. Domestic and Resident Foreign Corporations
B. Non-Resident Foreign Corporations
If the income is generated in the active pursuit and performance of the corporation’s primary purposes, the same is not passive income. For VAT purposes, in the course of trade or business includes transactions incidental thereto. Also, the rule of regularity to the contrary notwithstanding, the following shall be considered as being rendered in the course of trade or business in the Philippines and, thus, subject to VAT.
SECTION 4. INCLUSION IN THE GROSS INCOME – As provided in Section 8 of the CMEPA, amending Section 32 of the Tax Code, the following items are included as part of the gross income. These are:
(1) Equity-based compensation, such as stock options, restricted stock units, stock appreciation rights, and similar items: Provided, that equity-based compensation shall be included in the gross income at the time of exercise.
(2) Gains realized from the sale or exchange or retirement of bonds, debentures or other certificate of indebtedness including those with a maturity period of more than five (5) years. Thus, if traded thru a local or foreign stock exchange, subject to stock transaction tax (STT) under Section 127 of the Tax Code; otherwise, subject to ordinary income tax (graduated rates) for individual and regular corporate income tax for corporaion.
SECTION 5. EXCLUSION FROM GROSS INCOME – Pursuant to Section 8 of the CMEPA, amending Section 32(B)(7) of the Tax Code, there are additional items excluded from gross income, which means that these items are also exempt from income tax. These are:
(1) Interest Income and Gains from the Sale, Transfer, or Disposition of Project-Specific Bonds. – Specific bonds that are issued by the Republic of the Philippines or any of its instrumentalities to finance capital expenditures or programs covered by the Philippine Development Plan or its equivalent and other high-level priority programs of the national government, as determined by the Secretary of Finance.
(2) Gains from Redemption of Shares or Units of Participation in Mutual Fund and Unit Investment Trust Fund. – Gains realized by the investor upon redemption of shares of stock in a mutual fund company as defined in Section 22 (BB) of the Tax Code, or units of participation in a Mutual Fund or Unit Investment Trust Fund: Provided, that prior to such redemption final taxes due on realized gains have been previously withheld at the level of the underlying assets.
SECTION 6. ADDITIONAL ALLOWABLE DEDUCTIONS. – Section 9 of the CMEPA, amending Section 34 of the Tax Code, provides that, in the case of securities held by a dealer in securities or an entity licensed by the appropriate government regulatory agencies to buy and sell securities either for the entity’s own account or for the account of others, including banks and other financial intermediaries, said securities will be considered as ordinary assets and if ascertained to be worthless, such instruments will be considered as ordinary losses that are allowed as deduction from the taxable income.
Section 9 of the CMEPA likewise provides that fifty percent (50%) of the employer’s actual contribution made to Personal Equity and Retirement Accounts (PERA) under RA No. 9505 shall be an additional deduction from gross income, subject to compliance with the requirements set forth therein.
SECTION 7. ENTITIES ALLOWED TO CLAIM LOSSES FROM WASH SALES OF STOCK OR SECURITIES AS AN ALLOWABLE DEDUCTION. – As provided in Section 10 of the CMEPA, amending Section 38 of the Tax Code, aside from dealer in stock or securities, any entity or financial intermediary duly licensed by the appropriate government regulatory agencies to buy and sell securities either for the entity’s own account or for the account of others can likewise claim deduction under Section 34 of the Tax Code for the loss from wash sales of stocks or securities provided that such loss arises out of transactions made in the ordinary course of the business of such dealer, entity, or financial intermediary.
SECTION 8. NON- APPLICABILITY OF THE LIMITATION ON CAPITAL LOSSES TO DEALER IN SECURITIES OR OTHER FINANCIAL INTERMEDIARY. – Pursuant to Section 11 of the CMEPA, amending Section 39 of the Tax Code, the limitation of capital losses under Section 39 (C) of the Tax Code does not apply to dealer in securities or other entity or financial intermediary duly licensed by the appropriate government regulatory agencies to trade in securities that sells any bond, debenture, note, or certificate or other evidence indebtedness issued by any corporation (including one issued by a government or political subdivision thereof), with interest coupons or in registered form.
SECTION 9. SOURCES OF INTEREST INCOME IN THE PHILIPPINES . – Pursuant to Section 12 of the CMEPA, amending Section 42 of the Tax Code, interest income from debt instruments, bank deposits, deposit substitutes, trust funds, and other similar arrangements, such as bonds, notes , or other interest-bearing obligations of residents, corporate or otherwise, regardless of the government or any of its agencies or instrumentalities, are also considered sourced within the Philippines.
SECTION 10. TRANSITORY PROVISION – Any tax exemption and preferential rate on financial instruments issued or transacted prior to July 1, 2025, shall be subject to the prevailing tax rate at the time of its issuance for the remaining maturity of the relevant agreement.
the prevailing rate or tax exemption prior to July 1, 2025 shall apply only for the remaining maturity of the relevant agreement if the following conditions are present:
SECTION 11. SEPARABILITY CLAUSE – If any of the provisions of these Regulations is subsequently declared invalid or unconstitutional, the validity of the remaining provisions hereof shall remain in full force and effect.
SECTION 12. REPEALING CLAUSE – All other issuances and rules and regulations or parts thereof which are contrary to and inconsistent with the provisions of these Regulations are hereby repealed, amended or modified accordingly.
SECTION 13. EFFECTIVITY CLAUSE. – These Regulations shall take effect on July 1, 2025, following its publication in the Official Gazette or the Bureau of Internal Revenue’s official website, whichever comes first.
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