Briefing on Republic Act (RA)

10963: Tax Reform for

Acceleration and Inclusion
(TRAIN) – Sweetened
Beverages [Section 150B of the
Tax Code]
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Sweetened Beverages (SBs) - refer to

non-alcoholic beverages of any constitution
Sweetened (liquid, powder, or concentrates), that are pre-
Beverages packaged and sealed in accordance with the
Food and Drug Administration (FDA) standards,
that contain High Fructose Corn Syrup (HFCS)
and other caloric and/or non-caloric sweeteners
added by the manufacturers.

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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Types of Sweeteners
 Caloric Sweetener - refers to a substance that is
sweet and includes sucrose, fructose, and glucose
Sweetened
that produces a certain sweetness.
Beverages
 High Fructose Corn Syrup – refers to a sweet
saccharide mixture containing fructose and glucose
which is derived from corn and added to provide
sweetness to beverages, and which includes other
similar fructose syrup preparations.

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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Types of Sweeteners
 Non-Caloric Sweetener - refers to a substance
that is artificially or chemically processed that
Sweetened produces a certain sweetness. These are
substances which can be directly added to
Beverages
beverages, such as aspartame, sucralose,
saccharin, acesulfame potassium, neotame,
cyclamates and other non-nutritive sweeteners
approved by the codex alimentarius and adopted
by the FDA.

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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Subject to Excise Tax
 Sweetened juice drinks;
 Sweetened tea;
 All carbonated beverages;
Sweetened
 Flavored water;
Beverages
 Energy and sports drinks;
Products
 Other powdered drinks not classified as milk,
juice, tea, and coffee;
 Cereal and grain beverages; and
 Other non-alcoholic beverages that contain added
sugar
TRAIN Briefing – Sweetened Beverages
VER 1.0 – January 2018
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NOT Subject to Excise Tax
 All milk products
 One Hundred Percent (100%) natural fruit juices
w/o added sugar/ caloric sweetener
Sweetened
 One Hundred Percent (100%) natural vegetable
Beverages juices w/o added sugar/ caloric sweetener
Products  Meal replacement and medically indicated
beverages for oral nutritional therapy
 Ground, instant soluble and pre-packaged
powdered coffee products.

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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 Manufacturer
Persons  Owner or Possessor of untaxed
Liable
products
 Importer

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
8
Tax Rate
PRODUCT (per liter)
Using purely caloric sweeteners, and P6.00
Tax Rates purely non-caloric sweeteners, or a
and Bases mix of caloric and non-caloric
sweeteners
Using purely high fructose corn syrup P12.00
or in combination with any caloric or
non-caloric sweetener
Using purely coconut sap sugar and Exempt
purely steviol glycosides

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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Computation Number of Liters

of Excise EXCISE TAX DUE = X
Tax (Specific Tax) Excise Tax Rate

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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Illustration
1. Carbonated Beverages
Dulce Manufacturing Corp. will
Computation remove 100 cases of Super Cola
of Excise Tax using HFCS and non-caloric
sweetener from place of production.
Each case contains 6 bottles of 1.5
liters each.

Compute for the excise tax.

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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Solution
No. of Cases 100
Multiplied by no. of bottles per case x 6
Computation Total no. of bottles 600
of Excise Tax Multiplied by contents per bottle x 1.5L
Total Volume in Liters 900L
Multiplied by Specific Tax Rate x P12.00
Total Excise Tax Due P10,800.00

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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Illustration
2. Powdered Juice
Sweety Import Corp. will remove from
Computation customs custody 50 cases of Four
of Excise Seasons Juice using caloric and non-
Tax caloric sweetener containing 144 packs
by 25 grams. Each 25grams pack can
make 1Liter.

Compute for the excise tax.

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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Solution
No. of Cases 50
Multiplied by no. of packs per case x 144
Computation Total no. of packs 7,200
of Excise Tax Multiplied by consumable yield per pack x 1L
Total Volume in Liters 7,200L
Multiplied by Specific Tax Rate x P6.00
Total Excise Tax Due P 43,200.00

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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In general
 Before removal from the place of
production, in case of locally manufactured
Filing and products
Payment of Advance Payment/Deposit – Taxpayer,
Excise Tax at his option pay to the BIR using BIR
Form 2200S

 Before release from Customs house, in

case of imported products

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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1. Require Manufacturer/Importer to indicate

on the label the:
Specific a. Type of sweetener used
Responsibility b. Equivalent of each serving per liter
of Food and
Drug
Administration
2. FDA shall conduct post marketing
(FDA) surveillance of SBs on display in markets
and/or manufacturing plants

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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3. Require Manufacturer/Importer to submit

monthly report of sugar and other sweetener
Specific used in the production
Responsibility
of Food and 4. Provide to BIR summary of Certificate of
Drug
Product Registration for each existing brand
Administration
(FDA) of sweetened beverages

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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VIOLATION PENALTIES
Misdeclaration or summary cancellation
misrepresentation of or withdrawal of his
Penalties
sworn statement permit
any of the acts or treble the aggregate
omissions in violation amount of deficiency
of the Act and taxes, surcharges and
implemented by these interest
Regulations
TRAIN Briefing – Sweetened Beverages
VER 1.0 – January 2018
18 VIOLATION PENALTIES
any of the acts or omission criminal liability and
prohibited under the Act penalty under
Section 254 of the
NIRC
Penalties
willfully aids or abets in the criminal liability as
commission of any such the principal;
act or omission
If the offender is not a Deported
citizen of the Philippines immediately after
serving the sentence
TRAIN Briefing – Sweetened Beverages
VER 1.0 – January 2018
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1. Registration (Sec. 154; RMO 38-2003)
 Permit to Operate as Manufacturer/ Permit to
Operate as Toll-Manufacture/ Permit to
Admnistrative Operate as Importer
Requirements
for Excise
 Permit to Register Brands and Variants (Sec.
143 & Sec. 245)
Taxpayers
2. Issuance of Assessment Number (RMO 38-2003)
3. Posting of Bonds (Sec. 160)
4. Issuance of ATRIGs (RMO 35-2002; RMO 14-2014)
5. Issuance of Export Permit (RMO 38-2003; Sec. 159)
TRAIN Briefing – Sweetened Beverages
VER 1.0 – January 2018
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6. Transfer or Sale or Disposition of Raw
Materials and/or Semi-processed goods
7. Maintenance of Official Register Book
Admnistrative (ORB) (Sec. 153)
Requirements 8. Assignment of Revenue Officer On Premise
for Excise (ROOPs) (Sec. 16; RMO 18-86/LTS Memo 3-2005)
Taxpayers 9. Regular Stocktaking of Inventories (Sec. 6C)
10. Use of BIR Form on All Removals of SB
(BIR Form No. 2299 - Excise Taxpayer’s
Removal Declaration)

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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1. Excise Taxpayer engaged in manufacturing
and importing of SBs shall register with
Excise LT Regulatory Division (ELTRD) for
Large Taxpayers or with the Revenue
Transitory District Office (RDO) for Non-Large
Provisions Taxpayers where the taxpayer is required to
be registered for updating of their Certificate
of Registration (BIR Form No. 2303) using
BIR Form No. 1905 to add an excise tax
type. The application for registration shall
be filed on or before January 31, 2018.
TRAIN Briefing – Sweetened Beverages
VER 1.0 – January 2018
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2. Submit to the ELTRD copy furnished

ELTFOD notarized list of existing and new
locally manufactured and imported brands
Transitory of SBs for purposes of registration of said
Provisions brands on or before January 31, 2018.
(Please refer to Sec. 13 A for the
requirements).

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018
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3. Submit Sworn Declarations of Inventory
List as of December 31, 2017 to ELTFOD
on or before January 15, 2018. This
Transitory requirement is in addition to the regular
Provisions filing of Inventory List as of December 31,
2017 on or before January 30, 2018
4. Use the downloadable BIR Form No.
2200-S in filing and paying of excise tax
due upon removals of excisable products
from the place of production.
TRAIN Briefing – Sweetened Beverages
VER 1.0 – January 2018
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5. Submit summary of transactions of Excise
Taxpayer’s Removal Declaration (ETRD),
Delivery Receipt/ Sales Invoice/ Transfer
Slips as supporting attachments to the BIR
Transitory Form 2200S to its designated email address
Provisions at sb.attachment@bir.gov.ph
6. Secure Permit to Operate as
Manufacturer/Toll Manufacturer/Importer of
Sweetened Beverages whether registered
as large taxpayers or non-large taxpayers at
ELTRD on or before January 31, 2018
TRAIN Briefing – Sweetened Beverages
VER 1.0 – January 2018
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7. Secure an Authority to Release Imported

Goods (ATRIGs) at the ELTRD before
release of shipment from customs custody
Transitory
Provisions 8. Requisition from ELTFOD in writing the
BIR Form No. 2299 (ETRD) to be used in
supporting the removals of the excisable
products

TRAIN Briefing – Sweetened Beverages

VER 1.0 – January 2018