THE Bureau of Internal Revenue (BIR) on April 2 issued Revenue Regulations No. 6-2012 governing the taxation of the sale of gold and other metallic minerals to the Bangko Sentral ng Pilipinas and other persons or entities, amending Revenue Regulations No. 7-2008 and further amending Section 2.57.2(T) of Revenue Regulations No. 2-98, as amended.
Metallic minerals are subject to the 2 percent excise tax rate based on either the actual market value of the gross output thereof at the time of removal, in case of those locally extracted or produced, or the value used by the Bureau of Customs in computing tariff and duties, in case of importations.
Possessors of said metallic minerals must be able to show proof that the excise tax has been paid thereon, otherwise, they shall be assessed and be held liable for the payment thereof. Metallic minerals discovered in the possession of persons who cannot show proof of payment of excise taxes thereon are presumed to have been removed on the day of discovery.
Further, possession shall mean not only the actual, current physical possession of said metallic minerals, but shall likewise cover the inclusion of minerals in the inventory of a person or entity at any given point in time.
Sale of metallic minerals to persons and entities, except sale of gold to the Bangko Sentral ng Pilipinas, is subject to the 12 percent value added tax if the value thereof exceeds the threshold set by the Tax Code and existing issuances. Sale of gold to the Bangko Sentral ng Pilipinas is subject to value added tax at the rate of 0 percent, if the seller is a VAT registered taxpayer.
Sellers are subject to income tax at the rate prescribed under Section 24(A) in case of individual taxpayers, and under Section 27(A) of the Tax Code in case of corporations. Further, the buyer of the metallic minerals are required to withhold 5 percent of gross payments made and remit this to the government. In order for a seller/possessor of the metallic mineral to be able to claim theirs costs, the seller/possessor must be able to show proof of withholding and remittance of the 5 percent withholding tax on the product, otherwise all claimed costs and expenses associated therewith shall be disallowed.
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The author is a partner at the Nonato & Nonato Law Offices. He graduated from the Ateneo Law School (Juris Doctor in Laws, Second Honors), and UP Cebu (Bachelor of Business Management, Cum Laude). He has also completed his Masters of Law Degree from the University of California Hastings School of Law with specialization in International Business and Trade. You may contact him at rester.nonato@yahoo.com.