Definition of Raw Cane Sugar for Purposes of the Imposition of Advance Business Tax

Revenue Regulations No. 8-2015 was issued by the BIR to amend Revenue Regulations No. 6-2015 on the Definition of Raw Cane Sugar for Purposes of the Imposition of Advance Business Tax (Value-Added Tax or Percentage Tax) and for Other Related Purposes.

Section 2 (a) of the revenue regulations, defines Raw Cane Sugar as the natural sugar extracted from sugarcane through simple mechanical process by pressing for the juice; boiled to crystallize; filtered using centrifuge to separate these crystals, and dried, resulting to crystallize brown sugar (brown color due to natural molasses content present in sugar cane): Provided, that is shall refer to raw cane sugar produced from conducting only one (1) stage of filtering and centrifugal without any other further process applied thereto, such as but not limited to washing , bleaching, etc.: Provided further, that its color is greater than 800 ICU and that its content of sucrose by weight in dry state corresponds to a polarimeter reading of less than 99.5 degree. 

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%208-2015.pdf of the full text of Revenue Regulations No. 6-2015.

Imposition of Advance Business Tax (Value-Added Tax [VAT] or Percentage Tax) on Raw Sugar and Refined Sugar

Last month, there was an increase of retail prices of sugar in the market due to the the issuance of Revenue Regulations (RR) No. 6-2015 dated March 31, 2015 and other related factors.

After the issuance of the regulations, Revenue Memorandum Circular (RMC) No. 25-2015 was recently issued by the Bureau of Internal Revenue (BIR) to clarify, through questions and answer, certain issues.

One of the questions was:

1. What is the advance business tax (VAT) or percentage tax) treatment on the physical inventories of raw sugar and refined sugar held in possession by the miller/sugar refinery at the time of effectivity of RR No. 6-2015 on May 1, 2015?

Answer.: The physical inventories of raw sugar and refined sugar covered by Quedans dated before May 1, 2015 are not subject to the imposition of the advance business tax (VAT or percentage tax).

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2025-2015.pdf of the other questions and answers and the full text of RMC No. 25-2015.