Oilink International Corporation

December 6, 2007 BIR RULING [DA-613-07] R.A. 9480; DO-29-07; RMC 69-07 Oilink International Corporation 2701 West Tower, Philippine Stock Exchange Exchange Road, Ortigas City, Pasig City Attention: Atty. Norman R. Bueno Counsel Gentlemen : This refers to your letter dated November 27, 2007 requesting opinion on the applicability of the provisions of Republic Act 9480 (RA 9480), otherwise known as the Tax Amnesty Act of 2007, to excise taxes on imported petroleum products being collected by the Bureau of Customs (BOC) in its capacity as duly authorized collection agent of the Bureau of Internal Revenue (BIR). It is represented that Oilink International Corporation (Oilink) is a corporation duly organized and existing under and by virtue of the laws of the Philippines and with office address at 2701 West Tower, Philippine Stock Exchange Center, Exchange Road, Ortigas Center, Pasig City; that it imports petroleum products subject to excise tax under Section 129 of the National Internal Revenue Code (NIRC) which taxes are being paid and collected at the BOC; that in order to clear all its pending tax assessments for taxable year 2005 and prior years, Oilink availed of tax amnesty under RA 9480 and submitted on November 9, 2007 a Notice of Availment, Statement of Assets, Liabilities and Networth (SALN), Tax Payment Receipt, Tax Amnesty Payment Form 0617 (Acceptance of Payment Form) and Tax Amnesty Return which the LTAID II of the BIR National Office received on November 12, 2007; that it is your opinion that the provisions of RA 9480 cover all kinds of internal revenue taxes including excise taxes collected and paid at the BOC; and that by availing of tax amnesty under RA 9480, Oilink is immune, among others, from the payment of excise tax and other national internal revenue taxes assessed on its imported petroleum products for taxable year 2005 and prior years. ADCEaH In reply, please be informed that Section 3, Rule II of Department Order No. 29-07 (DO 29-07) or the Implementing Rules and Regulations of RA 9480 provides as follows: "SEC. 3. Taxes Covered. The tax amnesty shall cover all national internal revenue taxes imposed by the National Government for the taxable year 2005 and prior years, with or without assessments duly issued therefore, that have remained unpaid as of December 31, 2005." The kinds of taxes covered by the provisions of RA 9480 were clarified in Revenue Memorandum Circular No. 69-2007, dated November 5, 2007, pertinent portion of which states: "Q-1 What type of taxes and what taxable period/s are covered by the Tax Amnesty Program under RA 9480 as implemented by DO 29-07? A-1 The Tax Amnesty Program (TAP) covers all national internal revenue taxes such as income tax, estate tax, donor's tax and capital gains tax, value added tax, other percentage taxes, excise taxes and documentary stamp taxes, except withholding taxes and taxes passed-on and already collected from the customers for remittance to the BIR, these taxes/funds being considered as funds held in trust for the government. . . ." (emphasis supplied) HACaSc It is clear from the foregoing that all national internal revenue taxes, with the exception of withholding taxes, are covered by the provisions of RA 9480. This includes excise taxes on imported articles imposed under Section 129 of the NIRC which are paid by the owner or importer to the Customs Officers of the BOC. Under RA 9480, it is of no moment where the taxes are paid or who collects such taxes. To fall within the coverage of the law, what is important is that the tax subject of availment is a national internal revenue tax. Inasmuch as excise taxes on imported petroleum products are national internal revenue taxes, they are covered by the provisions of RA 9480 notwithstanding that such taxes are paid at and collected by BOC. Such being the case, the immunities granted under Section 10 of the law, particularly the immunity from payment of taxes arising from failure to pay any and all internal revenue taxes for taxable year 2005 and prior years, shall be accorded to Oilink subject to the condition that Oilink fully complies with the provisions on availment under RA 9480. In this regard, paragraph 3, Section 6.3., Rule III of DO 29-07 provides that: "SEC. 6. Method of Availment of Tax Amnesty . . . . 1. . . . 2. . . . 3. . . . The Acceptance of Payment Form, the Notice of Availment, the SALN, and the Tax Amnesty Return shall be submitted to the RDO, which shall be received only after complete payment. The completion of these requirements shall be deemed full compliance with the provisions of RA 9480." CcTHaD Considering that Oilink has completed the requirements for availment of tax amnesty, it is deemed to have fully complied with the provisions of the law. Accordingly, it is entitled to the immunities and privileges under RA 9480. Hence, Oilink shall be immune from the payment of excise taxes and other related national internal taxes due on imported petroleum products for taxable year 2005 and prior years which taxes are being collected by BOC. Relative thereto, Section 10 of the DO 29-07 partly provides thus: "SEC. 10. Immunities and Privileges . Taxpayers who have fully complied with the conditions under RA 9480 and these rules shall be entitled to the following immunities and privileges: 1. The taxpayer shall be immune from the payment of taxes, as well as additions thereto, and the appurtenant civil, criminal or administrative penalties under the National Internal Revenue Code of 1997, as amended, arising from the failure to pay and all internal revenue taxes for taxable year 2005 and prior years. 2. . . . 3. . . . The above-stated immunities and privileges shall not apply where the person failed to file a SALN and the Tax Amnesty Return, or where the amount of networth as December 31, 2005 is proven to be understated to the extended of thirty percent (30%) or more, in accordance with the provisions of Section 4 of RA 9480 and Section 9, Rule IV hereof." caTIDE In view of the foregoing, this Office hereby confirms your opinion as follows: 1. The provisions of RA 9480 cover all kinds of internal revenue taxes including excise taxes collected and paid at the BOC; and 2. By availing of tax amnesty under RA 9480, Oilink is immune, among others, from the payment of excise tax and other national internal revenue taxes assessed on its imported petroleum products for taxable year 2005 and prior years. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. THaCAI Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service