Sellers of gold, other precious metals to pay taxes in advance

MANILA, Philippines - The Bureau of Internal Revenue (BIR) is requiring sellers of gold and other precious metals to pay the appropriate taxes in advance as part of its efforts to boost government revenues.

Under the new guidelines, entities intending to sell jewelries, gold and other metallic minerals must settle taxes in advance through any assigned revenue collection officers of the BIR Revenue District Office having jurisdiction over the place where the transaction occurs.

Once the tax has been paid, the transaction will be validated by the issuance of a corresponding Revenue Official Receipt (ROR).

According to the BIR, the advance tax payments will be credited against the actual business tax and income tax due from sellers for the taxable period for which such advance payments were remitted to the agency.

The BIR has also mandated owners and operators of venues where organized meetings for sale of gold take place to advise their corresponding RDOs immediately after having acquired knowledge of the event.

The BIR imposes excise tax, value added tax, and income tax on the sale of gold and other metallic minerals to other persons or entities, including the Bangko Sentral ng Pilipinas (BSP).

However, the government’s main tax collection agency observed that many parties have been selling their gold to non-BSP buyers that do not impose the taxes, to avoid payment of taxes.

Many sales take place in gatherings and expositions hosted at hotels and other centers, and are advertised in newspapers of general circulation, the Department of Finance (DOF) said.

The BIR last year started imposing a five percent withholding tax and a two percent excise tax on gold sales due to rampant smuggling of the previous metal out of the country.

Aside from this, the BIR has also ruled that sales of shares involving private firms should be assessed at their fair market value for capital gains tax purposes using the adjusted net asset method specified by the agency.

This regulation effectively amends rules for the sale, barter, exchange, or other disposition of shares of stock of domestic corporations not traded in the local bourse.

Finance Secretary Cesar Purisima said these twin orders are aimed at further boosting collection of taxes from transfers that usually go unregulated.

Purisima said the twin directives are intended to increase the transparency of the business environment and curb tax evasion.