Revenue Regulation 9-2023 detailed the following pertinent points on the excise tax rate for perfumes and toilet waters:
A. Tax Filing for Local and Imported Perfume and Toilet Water
The excise tax rate whether for locally manufactured or imported perfumes and toilet waters is at 20 percent. The difference lies in the tax base wherein the wholesale price, net of excise and VAT is for locally manufactured, while the value of importation used by the Bureau of Customs (BOC) in determining tariff and customs duties, net of excise tax and VAT is for imports.
The excise tax shall be paid by the manufacturer or producer of such articles. In case of removal from the place of production without payment of the excise tax, the wholesaler, distributor, retailer, owner, or any person having possession thereof shall be liable. For imported articles, the excise tax shall be paid by the owner, importer, or person who is in possession of such articles to the BOC.
For locally manufactured articles, the BIR Form 2200-AN (Automobiles and Non-Essential Goods) shall be filed through the e-BIR Form or electronic filing and payment system (eFPS) to the accredited agent bank under the jurisdiction of the Revenue District Office (RDO) where the person liable is registered or required to be registered, or to the duly authorized collection agent under the jurisdiction of the RDO, or to the duly authorized treasurer of the city or municipality where the manufacturing or production plant is located.
On the other hand, for imported articles, the Single Administrative Document, formerly the Import Entry and Internal Revenue Declaration, shall be filed with the BOC. In the same way, for every importation of perfumes and toilet waters, including raw materials and devices, an application for Authority to Release Imported Goods (Atrig), including importation documents, shall be filed through the National Single Window System and submitted to the Excise LT Regulatory Division (ELTD) for the issuance of Atrig.
In cases where denatured alcohol is being used as raw material in the manufacture of perfumes and toilet waters, the manufacturer should be registered with the BIR as a buyer or user of denatured alcohol. Any excise tax paid on raw materials used in production shall not be allowed to be credited against the excise tax due on removals of finished or manufactured articles.
B. Required Permits
The following permits are required to be secured:
a. Local manufacturers/producers -- permit to operate as manufacturers of non-essential goods or permit to operate as buyer/user of ethyl alcohol and/or denatured ethyl alcohol.
b. Brand owners engaging toll manufacturers or subcontractors -- permit to operate as manufacturer of non-essential goods or permit to operate as buyer/user of ethyl alcohol and/or denatured ethyl alcohol or permit to engage the services of a toll manufacturer/subcontractor.
c. Importer -- permit to operate as an importer of non-essential goods.
d. Toll manufacturers or subcontractors -- permit to operate as toll manufacturer and/or subcontractor.
No person shall engage in business as manufacturer, producer, or importer of perfumes and toilet waters unless the premises upon which the business is to be conducted have been approved by the Commissioner or his duly authorized representative. Further, an assessment number, which is indicated in the permit to operate as an excise taxpayer, shall be assigned to every production plant and warehouse.
C. Manufacturer’s/Producer’s or Importer’s Sworn Statement
A sworn statement shall be filed with the ELTD containing a list of all the brands of perfumes and toilet waters and variants, showing the corresponding wholesale price and the suggested retail price for purposes of determining the unit cost or market value of each product manufactured and sold. An updated sworn statement shall be submitted on or before June and December of every year. However, whenever there is a change in the cost to manufacture, produce, import, or sell the brand or a change in the actual selling price of the brand, an updated sworn statement shall be submitted at least five days before the actual removal of the product from the place of production or release from customs custody.
D. Required Books
Every manufacturer or importer shall keep Official Register Books (Orbs) within the place of production or importer’s warehouse and shall at all times be made available for inspection by a duly authorized internal revenue officer. The submission of all transcript sheets of Orbs by all manufacturers and importers, including subcontractors, for non-essential goods to the Large Taxpayers Performance Monitoring and Programs Division or the Excise Tax Area having jurisdiction of the place of production shall be on or before the eighth day of the month immediately following the month of operation.
Source:
P&A Grant Thornton
Certified Public Accountants