Prescribing Procedures on the Filing of Excise Tax Returns and Payment of Excise Taxes on Petroleum Products Pursuant to Section 130(A) of the National Internal Revenue Code of 1997

December 28, 1998 REVENUE MEMORANDUM ORDER NO. 99-98 SUBJECT : Prescribing Procedures on the Filing of Excise Tax Returns and Payment of Excise Taxes on Petroleum Products Pursuant to Section 130(A) of the National Internal Revenue Code of 1997 TO : All Internal Revenue Officers and Others Concerned I. OBJECTIVES: This Order is issued to: A. Prescribe guidelines on the receipt of excise tax returns and other documents from oil companies; B. Provide standard formats for oil companies in reporting daily removals of petroleum products from refineries or places of production; and C. Prescribe procedures on the filing of excise tax returns by oil companies and payment of taxes due thereon, including the use of Reimbursement Certificates-Tax Debit Memo (RC-TDM) in payment of said taxes. II. DEFINITION OF TERMS: A. "Daily removal" of petroleum products refers to the total volume of petroleum products removed from the refinery or place of production from 12:01 a.m. to 12:00 midnight, which has been issued Withdrawal Certificate (WC) on or before the said cut-off time by the Revenue Officer On Premise (ROOP) assigned at the company's refinery or place of production. B. Reimbursement Certificate-Debit Memo (RC-DM) refers to an accountable form issued by the Department of Energy (DOE) authorizing the BIR to utilize a Reimbursement Certificate charged against the Oil Price Stabilization Fund (OPSF) in payment of specific taxes. C. Reimbursement Certificate-Tax Debit Memo (RC-TDM) refers to an accountable form issued to a taxpayer by the Bureau of Internal Revenue (BIR) as a written notice that his tax liability has been charged against his Reimbursement Certificate. III. POLICY GUIDELINES: A. The basis for the excise taxes to be paid shall be the daily removal of the petroleum products based on WCs issued on or before 12:00 midnight of each day. B. Payments for excise tax on petroleum products on the daily removal of oil companies shall be through the Direct Debit System charged against an account of the company with any of the Authorized Agent Bank (AAB) branches for Large Taxpayers within the following banking day. C. Petroleum products shall be removed from the refinery or place of production, irrespective of destination, only upon the issuance of WC indicating therein the name and address of the consignee, the date of removal, quantity and description of the product removed, duly certified by the ROOP as to the correctness of the entries by kind of product. D. After final determination of the quantity/volume withdrawn reckoned from 12:01 a.m. to 12:00 midnight of each date of removal, as evidenced by WCs issued, the availability of bank deposit and/or credit line for excise taxes purposes at the time of removal to cover the excise tax due and actual payment by an oil company within the next banking day of the excise taxes due shall be sufficient compliance with the requirement of payment before removal from the refinery or place of production. llcd E. Sufficient funds in the form of bank deposit and/or credit line with any AAB for Large Taxpayers must be available at the time of removal of the petroleum products to cover the required daily excise payments. For this purpose, the BIR shall be informed by the oil companies of the available balance in their bank deposits or their unused credit line with its chosen bank(s) for excise tax purposes. F. Oil companies shall be liable for surcharges on the difference between the excise tax payable for the day and the available balance of their bank deposit and/or credit line for excise tax purposes. IV. PROCEDURES: A. The Oil Companies shall: 1. Open an account and/or credit line facility with any of the AAB branches for Large Taxpayers for excise tax purposes. 2. For every daily removal of petroleum products from the refinery or place of production, accomplish the Excise Tax Return (BIR Form 2200), attaching therewith the details on the kinds of petroleum products removed and information on available bank deposit and/or unused credit line for excise tax purposes, following the format in Annex A or other similar format containing the same required information. 3. Pay the corresponding excise taxes due by advising the chosen AAB to debit their account for the amount of the tax payable within the next banking day from the date of issuance of the WCs. 4. Transmit to the Large Taxpayers Division an advance copy of the Excise Tax Return and Authority to Debit Account (ADA) and RC-TDM, if any, thru fax, or information on the taxes due and amount authorized to be debited and/or amount of RC-TDM, if any, electronically. 5. In case of payment thru RC-TDM, the following procedures are prescribed: a. A separate RC-TDM shall be requested for each of the daily returns filed. b. Oil companies shall be authorized to use RC-TDMs to the extent of 10% of their daily excise tax payments in accordance with Revenue Regulations (RR) No. 5-98 and Revenue Memorandum Order (RMO) No. 77-98. c. At the option of the oil company, approved RC-TDMs may be accumulated and the total thereof applied as payment for excise taxes due for a single day. d. Approved original copies of RC-TDMs shall be attached to the corresponding original copies of Excise Tax Returns which shall be submitted to the Large Taxpayers Division weekly. 6. Original copies of the Excise Tax Returns for a seven-day removal period (Monday to Sunday), including original copies of attachments (Annex A and RC-TDM, if any), shall be submitted to the Large Taxpayers Division on the Wednesday immediately following said period. B. The Department of Energy (DOE) shall: 1. Issue DOE RCDM within the next working day after the date of removal of petroleum products from the refinery or place of production. C. The AABs shall: 1. Debit the account of the oil company for the amount of excise tax payable within the next banking day following the date of removal of the petroleum products from place of production based on the ADA of the oil company. prcd 2. Report the collections on taxes paid by oil companies in the daily Batch Control Sheet (BCS) by attaching the advance copy of the tax returns and copies of the Bank Official Receipts evidencing the tax payments. D. The Large Taxpayers Division (LTD) shall: 1. Receive the advance copy of the Excise Tax Return of the oil company and transmit the same to the AAB where the ADA instruction for the excise tax payment was given, for inclusion in the AAB's BCS. 2. Receive the original copies of the Excise Tax Returns filed weekly by the oil companies, including the required attachments, and reconcile the same with the advance copies of the returns. 3. Monitor daily the available bank deposit balance and unused credit line for excise tax purposes of each oil company and reconcile with the excise taxes payable for each date of removal. 4. Impose penalties for any insufficiency in the available bank deposit balance and/or unused credit line as compared with the excise tax payable and/or for late filing of returns/late payment of taxes. V. REPEALING CLAUSE: This Order supersedes all other existing issuances or portions thereof inconsistent with this Order. VI. EFFECTIVITY: This Order shall take effect January 1, 1999. prLL (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue ANNEX A DAILY VOLUME OF REMOVALS AND EXCISE TAX DUE ON PETROLEUM PRODUCTS PART II. (To be accomplished by the Oil Company-Head Office/Concerned Unit) DATE: ________________ AMOUNT OF AVAILABLE FUNDS FOR EXCISE TAX PURPOSES (Indicate Name of Bank) Balance of Bank Deposit P_______________ Unused Credit Line P_______________ Certified Correct: ______________________________ (Oil Company Representative) Signature Over Printed Name