Prescribing the Rules for the Suspension of Payments of Taxes Granted to Distressed Copper Mining Companies Implementing LOI 1416 and Ministry of Finance Order No. 46-84

January 17, 1985 REVENUE MEMORANDUM ORDER NO. 01-85 SUBJECT : Prescribing the Rules for the Suspension of Payments of Taxes Granted to Distressed Copper Mining Companies Implementing LOI 1416 and Ministry of Finance Order No. 46-84 TO : All Internal Revenue Officers and Others Concerned SECTION 1. Scope - These rules shall govern the implementation of the suspension of payment of specific and ad valorem tax imposed on petroleum products sold and delivered to distressed copper mining companies. SECTION 2. Persons Covered By These Regulations - Only copper mining companies certified to by the Minister of Trade and Industry with a Permit from the Minister of Energy, shall be eligible under this Order. SECTION 3. Application/Procedures To Be Followed - The eligible copper mining company may avail of the following options by filing with the Oil & Miscellaneous Tax Division an application for the suspension of specific and/or ad valorem tax on its purchases of petroleum products: A. Bonded Stocks - Upon prior authority issued by the BIR, the claimant company may withdraw petroleum products from the refinery or bonded terminal without the prepayment of specific and/or ad valorem tax. At the end of each month, the copper mining firm must secure a certification from the oil supplier indicating the kind and quantity delivered and the corresponding amount of specific and/or ad valorem tax applicable thereof which shall be forwarded to the Commissioner of Internal Revenue. B. Tax-paid Stocks (unbonded) - If the claimant company purchases petroleum products from the taxpaid stocks the same may file a claim for tax credit enclosing the following documents: a) copies of sales or delivery invoices; and b) certification from the oil supplier. In cases where the oil supplier delivers tax-paid petroleum products to the claimant company and bills the particular mining company net of specific and/or ad valorem tax, the former may request a product replenishment with an equal quantity of the same kind, submitting the covering withdrawal certificate in addition to the documents mentioned above. However if there is a change in the rates of the specific and/or ad valorem tax for a particular product that would supervene between the delivery to the date of actual replenishment, the volume to be replenished should be adjusted, thus: Quantity delivered multiplied by the previous rate divided by the new rate will give the adjusted volume as the replenishment. A claim for refund verified to be in order shall be issued the corresponding tax credit or product replenishment authority in favor of the claimant mining firm and the oil supplier respectively. The tax credit or product replenishment authority issued shall be consecutively numbered and dated under the seal of the Bureau of Internal Revenue. Copies shall be kept on file for safekeeping with the Oil & Miscellaneous Tax Division and Receivable Accounts Division of BIR, with additional copies furnished to the Ministry of Energy and the Ministry of Trade & Industry. If the tax credit issued to a claimant mining company is assigned to the oil supplier, the original copy thereof must be presented to the Receivable Accounts Division for its application after the same has been checked by the Oil & Miscellaneous Tax Division where the corresponding Authority To Issue Payment Order has been prepared. In the case of the Product Replenishment Authority, once fully applied, the original shall be forwarded by the receiving inspectors assigned at the oil refinery/bonded establishments to the Receivable Accounts Division thru the Oil & Miscellaneous Tax Division. SECTION 4. Records To be Kept . - Eligible copper mining company shall keep an official register book which shall be officially installed at the place of mining operations subject for verification and inspection by duly authorized internal revenue officers anytime. The official register book shall basically consist of the following: A. On the Debit Side . - Dates of unloading or receipts of shipments of petroleum product, kind, quantities received, names of oil supplier, covering withdrawal certificates or delivery or sales invoices and the corresponding computation of the amount of the specific and/or ad valorem taxes applicable. B. On the Credit Side . - Dates and quantities of oil products removed or transferred for use. C. Resume . - At the end of the month, the copper mining company shall prepare a resume' which shall show the beginning balances, total receipts for the month, total volume of consumption for the month and the ending balances. Copies of the resume' certified to by the accounting manager of the mining operations shall be submitted to the Chief, Oil & Miscellaneous Tax Division, on or before the 8th day of the succeeding month. The Tax Credit and Refund Section under the Oil and Miscellaneous Tax Division shall take charge of verification and processing of the claim for tax credit or product replenishment of petroleum products delivered to eligible copper mining companies. The report of investigation shall be passed upon by the Chief of the Oil & Miscellaneous Tax Division who shall thereafter forward the same to the Tax Credit/Refund/Replenishment Committee created under RMO No. 12-79 for review, evaluation and recommendation to the Deputy Commissioner of Internal Revenue. SECTION 5. Quarterly Report To The CIR . - The copper mining company shall submit to the CIR Attn.: Oil & Miscellaneous Tax Division within 15 days after each quarter, a consolidated quarterly statement covering the purchases of oil products containing, among others, the following: A. Total quantity of petroleum products received during the period; B. Certification of the Oil Supplier; and C. Computation of the corresponding amount of specific and/or ad valorem tax applicable. SECTION 6. Repayment of Taxes . - Upon the lifting of the order of suspension of payment by the President and the approval of the schedule of payment by the Ministry of Trade and Industry, the Receivable Accounts Division keeping file of tax credits or product replenishment authorities issued under this Order, shall within five (5) days from receipt of the lifting order and schedule, formally notify the debtor/copper mining firm of its accounts and demand the payment of the same in accordance with the approved schedule of repayments. SECTION 7. Repealing Clause . - Provisions of all previous Revenue Memorandum Orders and other issuances which are inconsistent herewith are hereby suspended. casia SECTION 8. Effectivity . - This Revenue Memorandum Order shall take effect immediately. (SGD.) RUBEN B. ANCHETA Acting Commissioner