RR 4-2022Digest

Revenue Regulations No. 4-2022 (May 26, 2022) implements Section 295(F) in relation to Section 294 of the NIRC, as amended by the CREATE Act, governing the tax treatment of petroleum and petroleum products imported into, and transferred, transported or withdrawn from, Freeport Zones and Economic Zones. VAT and Excise Tax on such products must be paid by the entering party or importer to the Bureau of Customs before any subsequent transfer, transport or withdrawal. Refunds of VAT and Excise Tax are allowed for statutorily zero-rated or exempt transactions — e.g., sales to registered export enterprises, entities in international shipping or air transport, international carriers, treaty-covered and legally exempt entities — via a claim filed with the BIR which, once approved, is forwarded to the BOC for cash payment or a tax credit certificate. No refund is granted if the products are later sold into the customs territory or to parties not enjoying tax privileges, and possessors must prove taxes were paid or the taxes will be collected from them. Compliance requirements include securing an ATRIG from the BIR ETRD, paying taxes computed at the time of each transfer, obtaining a Withdrawal Certificate from ELTFOD that accompanies every movement, securing a Permit to Operate for importers, and registering tank facilities, depots or terminals with the appropriate BIR office.