REVENUE REGULATIONS NO. 2-2012 issued on February 20, 2012 prescribes the tax administration treatment of petroleum and petroleum products imported into the Philippines including those coming in through freeport zones and economic zones and registration of all storage tanks, facilities, depots and terminals. The Value-Added Tax (VAT) and Excise Taxes which are due on all petroleum and petroleum products that are imported and/or brought directly from abroad to the Philippines, including Freeport and Economic zones, shall be paid by the importer thereof to the Bureau of Customs (BOC). The subsequent exportation or sale/delivery of these petroleum or petroleum products to registered enterprises enjoying tax privileges within the Freeport and Economic zones, as well as the sale of said goods to persons engaged in international shipping or international air transport operations, shall be subject to 0% VAT. With respect to the VAT paid on petroleum or petroleum products by the importer on account of aforesaid 0% VAT transactions/entities and the Excise Taxes paid on account of sales to international carriers of Philippine or Foreign Registry for use or consumption outside the Philippines or exempt entities or agencies covered by tax treaties, conventions and international agreements for their use or consumption (covered by Certification in such entity’s favor), as well as entities which are by law exempt from indirect taxes, the importer may file a claim for credit or refund with the BOC. The BOC shall process the claim for refund, subject to the favorable endorsement of the BIR, in accordance with existing rules and procedures: Provided, that no claim for refund shall be granted unless it is properly shown to the satisfaction of the BIR that said petroleum or petroleum products have been sold to a duly registered locator and have been utilized in the registered activity/operation of the locator, or that such have been sold and have been used for international shipping or air transport operations, or that the entities to which the said goods were sold are statutorily zero-rated for VAT, and/or exempt from Excise Taxes. In the event that the said Freeport/Economic zone-registered enterprise shall subsequently sell/introduce the petroleum or petroleum products, or part of the volume thereof, into the customs territory (except sales of fuel for use in international operations) or another Freeport/Economic zone-registered enterprise not enjoying tax privileges, no refund for Excise Taxes shall be granted to the importer for the product sold. In any event, the possessor of petroleum or petroleum products must be able to present sufficient evidence that the Excise Taxes due thereon have been paid, otherwise the Excise Taxes due on said goods shall be collected from said possessor/user. In case of sale/introduction of petroleum and petroleum products, or part of the volume thereof, by a Freeport/Economic zone-registered enterprise, or part/volume thereof, into the customs territory or to a Freeport/Economic zone-registered enterprise not enjoying tax privileges, or any sale to an entity not enjoying 0% VAT rate, the seller shall be liable for 12% VAT. In this instance, no refund for VAT shall be allowed the importer or an assessment for VAT shall be issued to the said importer, if the refund has already been granted, and another assessment for VAT shall be made against the seller. For each and every importation of petroleum and petroleum products, the importer thereof shall secure the prescribed ATRIG from the BIR’s Excise Tax Regulatory Division (ETRD), and pay the VAT and Excise Taxes, as computed, before the release thereof from the BOC’s custody. In case of subsequent sale/introduction to customs territory by a Freeport/Economic zone-registered enterprise of petroleum and petroleum products, the importer shall secure the necessary Withdrawal Certificate. For Excise Tax purposes, all importers of petroleum and petroleum products shall secure a Permit to Operate with the BIR’s ETRD. Such permit shall prescribe the appropriate terms and conditions which shall include, among others, the issuance of a Withdrawal Certificate and the submission of liquidation reports, for the Permitee’s strict compliance. All tank facilities, depots or terminals throughout the Philippines, including those located within the Freeport Zones as well as within the Economic Zones shall be registered by the owners, lessors or operators thereof with the appropriate BIR Office having jurisdiction over the said facilities as follows: Revenue Regions Where the Storage Facilities are Located Appropriate BIR Office Where to Register Revenue Region Nos. 4, 5, 6, 7, 8, 9 and 10 Excise Tax Regulatory Division, National Office Revenue Region Nos. 1, 2 and 3 Excise Tax Area I-Baguio City Revenue Region Nos. 11 and 12 Excise Tax Area III-Bacolod Revenue Region Nos. 13, 14 Excise Tax Area IV-Cebu Revenue Region Nos. 15 and 19 Excise Tax Area V-Davao Revenue Region Nos. 16, 17 and 18 Excise Tax Area VI-Cagayan de Oro In cases where said facilities will be used for the storage of petroleum or petroleum products or other goods subject to Excise Taxes, a Permit to Operate from the BIR shall be issued. Said permit shall prescribe the appropriate terms and conditions which shall include, among others, the maintenance of Official Register Books or their equivalent, joint supervision over the facilities with the BIR, through the assignment of Revenue Officers, and stocktaking/physical inventory taking of petroleum and petroleum products stored therein. The monitoring requirements prescribed in this Section and in the permit granted shall likewise be strictly observed. A facility which will not be used for storage of petroleum or petroleum products or other articles subject to Excise Taxes, if satisfactorily established to the BIR, will be issued a Permit to Operate Exempt Facility. This notwithstanding, both Permit to Operate and Permit to Operate Exempt Facility should categorically state the goods stored therein, and should any changes be planned, an application for new permit should be made. All owners, lessors or operators of tank facilities, depots or terminals shall submit the required documents specified in the Regulations to the appropriate BIR offices within fifteen (15) days from the date of effectivity of these Regulations.