October 2021
EXCISE TAXES
Atty. C. Llamado
-
In addition to the VAT (or OPT)
Taxes which apply to certain goods manufactured or produced in the Philippines
for domestic sale or consumption, and to things imported.
Excise tax shall also apply to certain services performed in the Philippines.1
Deductible for income tax purposes
Purposes of Excise Tax:
1) To raise revenue;
2) To curtail the consumption of certain commodities;
3) To protect domestic industries;
Type of Excise Taxes
Specific Tax – excise tax imposed on goods or Ad Valorem Tax – excise tax imposed on
articles based on weight or volume capacity or goods or articles based on the selling price or
any other physical unit of measurement.
other specified value of the goods, exclusive of
VAT and tariff and customs duties (if
imported).
Excise tax on:
ALCOHOL PRODUCTS
1) Distilled spirits (including proof spirits)
– whisky, brandy, rum, gin, and vodka,
fortified wines;
2) Wines – sparkling wines, champagne,
still wines
3) Fermented liquor – beer, lager beer, ale,
porter and other fermented liquors
except tuba, pasi, tapuy.
TOBACCO PRODUCTS
4) Tobacco products (except stemmed leaf
tobacco or tobacco by-products which
are to be exported or used in the
manufacture of cigars and cigarettes)
- Includes
tobacco
specially
prepared for chewing
(Note: But in computing VAT on importation,
excise tax and tariff and customs duties are
included in the tax base.)
Excise tax on:
1) Distilled sprits
2) Cigars
3) Automobiles excluding:
a) Buses, trucks6;
b) Cargo vans;
c) Jeepneys/jeepney substitutes;7
d) Single cab chassis;
e) Special-purpose vehicles; and
f) Automobiles
used
exclusively
within the Freeport zones.
Provided:
1) Purely electric vehicles and pick-ups
are exempt from excise tax.
2) Hybrid vehicles shall be taxed at
50% of the applicable excise tax
rates.
1
TRAIN.
6
Pick-ups are considered trucks, and therefore exempt from excise tax.
Jeeps are considered automobiles subject to excise tax.
7
1
October 2021
- Heated tobacco products2
- Vapor products3
5) Cigars
6) Cigarettes
PETROLEUM PRODUCTS
7) Lubricating oils and greases;
8) Processed gas;
9) Waxes and petrolatum;
10) Denatured alcohol to be used for motive
power;
11) Naphtha, regular gasoline, and other
similar products of distillation;
12) Leaded and unleaded premium gasoline;
13) Aviation turbo jet fuel;
14) Asphalts
15) Kerosene;
16) Diesel fuel oil;
17) Liquefied petroleum gas;
18) Bunker fuel oil.
NON-ESSENTIAL GOODS
4) Jewelry, whether real or imitation;
pearls; precious and semi-precious
stones and imitations;
5) Goods made of or ornamented, mounted
or fitted with precious metals or
imitations thereof or ivory;
Except:
a) surgical and dental instruments;
b) silver-plated wares, frames, or
mountings for spectacles or
eyeglasses; and
c) dental gold or gold alloys and other
precious metals used in filling,
mounting, or fitting the teeth.
6) Opera glasses and lorgnettes;
7) Perfumes and toilet waters;
8) Yachts and other vessels intended for
pleasure or sports.
MINERAL PRODUCTS
19) Coal and coke
SWEETENED BEVERAGES4 - imposes a
tax per liter of volume capacity on sweetened
beverages.5
The following products are excluded from the
excise tax on sweetened beverages:
(a) All milk products;
(b) 100% natural fruit juices;
(c) 100% natural vegetable juices;
(d) Meal replacement and medically
indicated beverages; and
MINERAL PRODUCTS
9) Non-metallic minerals and quarry
resources such as marble, granite,
volcanic cinders, basalt, tuff and rock
phosphate;
10) Metallic minerals:
a) Copper and other metallic minerals;
b) Gold and chromite
11) Indigenous petroleum including locallyextracted mineral oil, hydrocarbon gas,
bitumen, crude asphalt, mineral gas.
Except:
a) Locally-extracted natural gas; and
2
Heated tobacco products refer to tobacco products that may be consumed through heating tobacco, either
electrically or through other means sufficiently to release an aerosol that can be inhaled, without burning
or any combustion of the tobacco. Heated tobacco products include liquid solutions and gels that are part
of the product, and are heated to generate an aerosol.
3
Vapor products shall mean any liquid solution or gel which contains nicotine that transforms into an
aerosol without combustion through the employment of a mechanical heating element, battery, or circuit
that can be used to heat such solution or gel, and includes but is not limited to a cartridge, a tank, and the
device without a cartridge or tank. It is commonly known as e-liquids for e-cigarettes.
4
Added by TRAIN.
5
The excise tax shall be based on the following schedule:
Using purely caloric sweetener, purely non-caloric sweetener, or mixture or ₱6/liter
both
Using purely high-fructose corn syrup, or in combination with any caloric or ₱12/liter
non-caloric sweetener
Using purely coconut sap sugar/purely steviol glycosides
Exempt
2
October 2021
(e) Coffee – ground coffee, instant soluble
coffee, and pre-packaged powdered
coffee products.
b) Locally-extracted liquefied natural
gas.
NON-ESSENTIAL SERVICES8 - 5% tax on
gross receipts, net of excise tax and VAT,
derived from the performance of invasive
cosmetic surgeries, procedures, and body
enhancements
for
aesthetic/cosmetic
purposes.
The following shall be exempt from the 5%
excise tax:
(a) Procedures to ameliorate a deformity
arising from or directly related to a
congenital or developmental defect or
abnormality, a personal injury resulting
from an accident or trauma, or
disfiguring disease, tumor, virus, or
infection; and
(b) Cases or treatments covered by the
National Health Insurance Program.
Gross Selling Price of Goods Subject to Ad Valorem Tax
1) The price, excluding the VAT, at which the goods are sold at wholesale or through sales
agents;
2) If the manufacturer also sells the goods at wholesale in another establishment of which he
is the owner, the wholesale price in the latter establishment shall be the gross selling price;
3) If the price is less than the cost of manufacturing plus expenses, the gross selling price shall
equal such cost + expenses + a proportionate margin of profit (≥ 10% of the cost +
expenses).
Persons Subject to Excise Tax
1) Domestic Products
a) Generally, the manufacturer or producer of the domestic products shall file the
return and pay the excise taxes before the removal of the domestic products from the
place of production; or
b) Owner or person having possession of domestic products which were removed from
place of production without payment of the excise tax; or
c) The first buyer, purchaser, or transferee for local sale or transfer in the case of
indigenous petroleum, natural gas, or liquefied natural gas;
2) Imported Products
8
Added by TRAIN.
3
October 2021
a) The importer shall file the return and pay the tax before removal of the imported goods
from the customhouse or customs custody; or
d) The person who is found in possession of articles which are exempt from excise taxes
other than those legally entitled to exemption.
Credit for Excise Taxes on Goods Actually Exported
Excise taxes paid on goods actually exported shall be credited or refunded upon submission of
proof of actual exportation and upon receipt of the foreign exchange payment.
Provided: Excise tax on mineral products (except coal and coke) shall not be creditable nor
refundable even if the mineral products are actually exported.
Changes under the TRAIN:
1) Cigarettes packed by hand, and packed by machines follow the same schedule of specific
excise taxes.
2) Excise taxes on the following products were increased:
(a)
(b)
(c)
(d)
(e)
(f)
Cigarettes packed by hand, and cigarettes packed by machine;
Manufactured oils and other fuel oils;9
Locally manufactured and imported automobiles;
Domestic or imported coal and coke;
Non-metallic and metallic minerals;
Indigenous petroleum.
Exemptions from the Excise Tax:
(a) Naptha and pyrolysis gasoline used as raw material in the production of petrochemical
products or in the refining of petroleum products, or as replacement fuel for naturalgas-fired-combined cycle power plant;
(b) Production of petroleum products, whether or not they are classified as products of
distillation, and for use solely for production of gasoline;
(c) Liquefied petroleum gas when used as a raw material in the production of
petrochemical products;
(d) Petroleum coke, when used as feedstock to any power generating facility;
(e) Purely electric vehicles, and pick-ups;10
(f) Under special laws:
9
10
Diesel fuel, liquefied petroleum gas, kerosene, and bunker fuel oil which were all exempt before the
effectivity of the TRAIN are now taxed under the TRAIN.
Hybrid vehicles shall be subject to 50% of the applicable excise tax rates on automobiles.
4
October 2021
(1) Importation from March 25, 2020 to December 19, 2020 of critical or needed
healthcare equipment or supplies intended to combat the COVID-19 public health
emergency.
The importation of inputs, raw materials, and equipment necessary for the
manufacture or production of the abovementioned essential goods related to the
containment or mitigation of COVID-19 shall be exempt from excise taxes.
Provided, the importing manufacturer is included in the Master List of the DTI and
other incentive granting bodies.11, 12, 13
(2) Importation of waste management equipment from June 25, 2020 to December 19,
2020
The importation from June 25, 2020 to December 19, 2020 of equipment for waste
management including, but not limited to waste segregation, storage, collection,
sorting, treatment, and disposal services, as approved by the Department of
Environment and Natural Resources (“DENR”), DOH, or other concerned
regulatory agencies shall be exempt from excise taxes.14
(3) Importations, from September 15, 2020 to December 19, 2020, of personal
computers, laptops, tablets, or similar equipment appropriate for use in schools,
which are donated for distribution to public schools regardless of level, including
state universities and colleges and vocational institutions under TESDA, shall be
exempt from import duties and taxes.15
(4) The importation of COVID-19 vaccines shall be exempt from import duties, taxes,
and other fees, subject to the approval or licenses issued by the DOH or FDA.16
Note: Such COVID-19 vaccines must not be intended for resale or other
commercial use, and shall be distributed without any consideration from
persons to be vaccinated.17
(5) Crude oil that is intended to be refined at a local refinery, including the volumes
that are lost and not converted to petroleum products when the crude oil actually
undergoes the refining process, shall be exempt from the payment of applicable
taxes and duties upon importation.18
Provided, the applicable duties and taxes on petroleum products shall be payable
only upon lifting of the petroleum products produced from the imported crude
oil.19
11
12
13
Rev. Reg. No. 6-2020; Rev. Reg. No. 28-2020.
Rev. Reg. No. 28-2020.
To qualify for the exemption, the taxpayer availing thereof must present a certification from the DTI that
the equipment and supplies being imported are not locally available or are of insufficient quality (Rev.
Reg. No. 28-2020).
14
Sec. 4(cc), R.A. No. 11494; Rev. Reg. No. 28-2020.
Sec. 4(zzz), R.A. No. 11494; Sec. 2, Rev. Reg. No. 26-2020.
16
Sec. 295(E), NIRC.
17
Rule 2, Sec. 6, IRR of Title XIII of the Tax Code.
18
Sec. 295(G), NIRC.
19
Ibid.
15
5
October 2021
DOCUMENTARY STAMP TAX (DST)
-
A national tax whose purpose is to raise revenue;
Deductible for income tax purposes
Defined as a tax upon documents, instruments, loan agreements, papers evidencing
acceptances, assignments, sales and transfers of obligations, rights or properties, and in
respect of the transaction so had or accomplished. It is levied and collected whenever
the document is made, signed, issued, accepted, or transferred when the obligation or
right arises from Philippine sources, or the property is situated in the Philippines.
However, the DST is actually an excise tax because it is imposed on the transaction
rather than on the document.20 The transactions entered into by the taxpayer
need not be embodied in a document or debt instrument for them to be subjected
to DST.
Documents and Papers Subject to Documents and Papers Not Subject to DST
DST21
a) Original issue of shares of stock
b) Bonds, debentures, certificates of
stock/indebtedness issued in foreign
countries
c) Sales, agreements to sell, memoranda of
sales; deliveries or transfer of shares or
certificates of stock
d) Certificates of profits or interest in
property or accumulations
e) Bank checks, drafts, certificates of
deposit not bearing interest, and other
instruments
f) Debt instruments;
g) Bills of exchange or drafts;
h) Acceptance of bills of exchange;
i) Foreign bills of exchange and letters of
credit;
j) Life insurance policies;
k) Insurance upon property;
l) Fidelity bonds and other insurance policies
m) Policies of annuities, and pre-need plans
n) Indemnity bonds
o) Warehouse receipts
p) Jai-alai, horse race tickets, lotto, or other
authorized numbers games
q) Bills of lading or receipts
r) Proxies
s) Powers of attorney
t) Leases and other hiring agreements
u) Mortgages, pledges, and deeds of trust
v) Deeds of sale and conveyances of real
property22
w) Charter parties and similar instruments
a) Policies of insurance or annuities made by a
fraternal or beneficiary society operated on the
lodge system or local cooperation plan;
b) Certificates of oaths administered to any
government official in his official capacity
c) Papers filed in court by or for the national,
provincial, or municipal governments
d) Affidavits to prove poverty;
e) Statements and other compulsory information
required of persons exclusively for statistical
purposes and for the use of the government
f) Certificates of the assessed value of lands ≤ ₱200
g) Borrowing and lending of securities executed
under the Securities Borrowing and Lending
Program (“SBL”) of a registered exchange
h) Loan agreements ≤ ₱250,000 executed by an
individual for the purchase of a house and lot,
motor vehicle, appliance, or furniture for
personal use
i) Sale, barter, or exchange of shares listed and
traded through the local stock exchange
j) Assignment or transfer of mortgage, lease, or
insurance policy if there is no change in the
maturity date
k) Fixed income and other securities traded in the
secondary market or through an exchange;
l) Derivatives
m) Interbranch or interdepartmental advances
within the same legal entity
n) Forebearances arising from sales or service
contracts
o) Bank deposit accounts without a fixed term
p) Contracts, deeds, documents and transactions
related to the conduct of business of the BSP
20
San Miguel Paper Packaging Corporation vs. CIR, CTA Case No. 9288, July 2, 2019.
TRAIN increased the DST rates for the transactions in BOLD.
22
Transfers exempt from donor’s tax are exempted from DST.
21
6
October 2021
x) Assignments and renewals of certain
instruments
y) Certificates
q)
r)
Transfer of property pursuant to tax-free
exchanges
Interbranch call loans with maturity ≤ 7 days to
cover deficiency in reserves including those
between or among banks and quasi-banks
Persons Subject:
The person making, signing, issuing, accepting, or transferring the document. When one
party enjoys exemption, the other party who is not exempt shall be the one directly liable
for the tax.
Time of Filing and Payment:
Generally, the tax return shall be filed within 5 days after the close of the month when the
document was made, signed, accepted or transferred.
Place of Filing and Payment:
1) Authorized agent bank (AAB) within the territorial jurisdiction of the RDO which has
jurisdiction over the residence or principal place of business of the taxpayer; or
2) If there be no AAB, with the Revenue District Officer, collection agent, or duly
authorized treasurer of the city or municipality in which the taxpayer has his legal
residence or principal place of business.
Modes of Payment:
1) The tax due on the return is paid at the time the return is filed; or
2) The tax may be paid through purchase and actual affixture of the DSTs on the
document; or
3) By imprinting the DSTs, through a DST metering machine, on the taxable document.
Effect of Failure to Stamp a Taxable Document:
1) Shall not be recorded;
2) Shall not be admitted or used in evidence in any court;
3) The notary public shall not add his jurat or acknowledgement to the document
Until the DSTs are paid.
7
October 2021
Documentary Stamp Tax (DST)
Documents/Transactions
Tax Rate
In general
Original Issue of Shares of Stocks
P 2.00 / P 200
Sales, Agreements to Sell, Memoranda of Sales,
Deliveries or Transfer of Shares or Certificates of Stock P 1.50 / P 200
with par value
In case Stock without par value
50% of DST paid on original issue
Bonds, Debentures, Certificates of Stock or Same tax rate on similar instrument
Indebtedness issued in Foreign Countries
Certificates of Profits or Interest in Property or P 1.00 / P 200
Accumulations
Bank Checks, Drafts, Certificates of Deposit not P 3.00/piece of check, draft, certificate,
Bearing Interest, and Other Instruments
etc.
P 1.50 / P 200 of issue price or a
Original issue of all Debt Instruments
fraction of 365 days for instruments
with term of less than one (1) year
Acceptance of Bills of Exchange or Order drawn in a P 0.60 / P 200
Foreign Country but payable in the Philippines
Foreign Bills of Exchange and Letters of Credit
P 0.60 / P 200
Life Insurance Policies amount:
Does not exceed P 100,000
Exempt
Exceeds P 100,000 but does not exceed P 300,000 P 20.00
Exceeds P 300,000 but does not exceed P 500,000 P 50.00
Exceeds P 500,000 but does not exceed P 750,000 P 100.00
Exceeds P 750,000 but does not exceed P 1,000,000 P 150.00
Exceeds P 1,000,000
P 200.00
Policies of Insurance upon Property
P 0.50 / P 4.00
Fidelity Bonds and Other Insurance Policies
P 0.50 / P 4.00
P 1.00 / P 200 of the premium or
Policies of Annuities
installment payment on Contract Price
collected
Pre-need Plans
P 0.40 / P 200 of the premium or
contribution collected
Indemnity Bonds
P 0.30 / P 4.00
Certificates (Sec. 188 of the Tax Code)
P 30.00/certificate
Warehouse Receipts
P 30.00 w/ value above P 200
Jai-alai, Horse Race Tickets, Lotto, or Other Authorized P 1.00 and below
P 0.20
Number Games
Above P 1.00
P 0.20 / P 1.00
Bills of Lading or Receipts
P 100 to P 1000
P 2.00
Above P 1000
P 20.00
Proxies for Voting at Any Election
P 30.00/issued proxy
Powers of Attorney
P 30.00/power of Attorney
Leases and Other Hiring Agreements
1st P 2,000
P 6.00
In excess
P 2.00 / P 1,000
st
Mortgages, Pledges and Deeds of Trust
1 P 5000
P 40.00
In excess
P 20.00 / P 5000
On Assignments & Renewals of Certain Instruments
Same rate as original instrument
Bills of Exchange or Drafts
P 0.60 on each P 200
On Deeds of Sale, Conveyances, and Donations of Real First P 1,000 of P 15
Property
the consideration
or FMV (zonal or
Note: Transfers exempt from the donor’s tax shall assessor’s value),
be exempt from the DST imposed under Section 196.
8
October 2021
whichever
highest23
is
In
excess
P1,000
of P 15/ P1,000
Charter Parties and Similar Instrument if gross tonnage
of the Ship, Vessel or Steamer is:
1st 6 months
In excess
P 1,000
+ P 100/month
1,001 to 10,000 tons
1st 6 months
In excess
P 2,000
+ P 200/month
Over 10,000 tons
1st 6 months
In excess
P 3,000
+ P 300/month
1,000 tons and below
23
When one of the contracting parties is the government, the tax herein imposed shall be based on the actual
consideration.
9